Fact Check: Texas wants California’s cargo ships. Would that speed up the supply chain?
Claim: Texas Gov. Greg Abbott, trying to lure California-bound ships stuck outside state ports, offered this lure in a tweet recently.
“Are your products stuck off Long Beach? Texas ports are wide open. Port delays are up to a hundred days in California. In less than two weeks your cargo can set sail from California and be at one of our 24/7 functioning Texas cargo ports, unloaded and on their way to shelves near you.
“Choose a state that doesn’t see inflation and America’s supply chain backlog as a good thing. Escape California. Everyone’s doing it. Choose Texas.”
Ruling: Largely false.
Analysis:
Average ship waits at anchor at the Port of Los Angeles are about 14 days before coming in to be worked, according to port data. Once at dock and work has begun, other delays can add one to two weeks.
No prominent officials in California have labeled rising prices or the supply chain crunch a “good thing.”
Gov. Gavin Newsom said in his Oct. 20 executive order “The movement of goods and health of supply and distribution chains across California is a matter of vital statewide importance.”
California economists have been warning for months about the dangers of inflation. The annual cost of living hit a 31-year high last month.
“Inflation is spreading like wildfire,” said Sung Won Sohn, professor of finance and economics at Loyola Marymount University, Thursday.
Abbott’s office did not respond to requests for comment.
Texas vs. California
Abbott has been trying for some time to woo California businesses to lower-tax, business-friendly Texas. Last month, Tesla mogul Elon Musk said he’d move his company headquarters to Austin from Palo Alto.
Abbott’s tweet, which includes a 30-second promotional video, is correct about the time it would take cargo to arrive by ship at a Gulf Coast port — about two weeks.
But that wouldn’t help most California-bound ships, experts said.
“Maybe that will appeal to not more than 10% of ships headed for Long Beach and Los Angeles,” said Gary Hufbauer, an international trade expert and non-resident senior fellow at the Peterson Institute for International Economics.
Texas could help smaller ships, those with rough 14,000 containers or less, said Chris Tang, faculty director of the UCLA Center for Global Management. Bigger ships often have as many as 20,000 containers.
The larger vessels would have trouble getting through the Panama Canal to the Gulf Coast ports, he said.
Once they arrived, Tang saw the supply chain having a potentially smoother path than in California. While there is still a shortage of trucks and truck drivers nationwide, he saw Texas as an easier place to do business.
“There’s no AB5 there,” he said, referring to the 2019 California law, Assembly 5, that the business community sees as making it more difficult to hire independent contractors.
Business organizations want Newsom to suspend AB 5, the law that requires companies to classify more workers as employees and provide benefits such as overtime and paid sick leave.
Still, the difficulty of finding enough ground transportation and workers remains. Demand stays high, and the system is struggling to keep up, said David Dollar, senior fellow at Washington’s Brookings Institution.
“Behind all of this is a big surge in demand for stuff,” he said. “It’s a combination of a lot of things.”
This story was originally published November 11, 2021 at 5:25 AM.
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