In Short Supply
As we roll into the holiday season, America has one thing on its mind: logistics.
Well, more specifically, turkeys and pumpkin pies and Christmas presents… or the lack thereof on store shelves.
The Great Toilet Paper Shortage of 2020 may seem like a distant memory today, but nearly two years later, the pandemic-triggered disruptions to our supply chain linger on. Families are having trouble getting everything from food and clothing to electronics and vehicles, with prices increasing on the goods that are available.
The culprit? California ports, which cut back on staffing during the pandemic and have been overwhelmed by swelling growth in demand for consumer goods, leaving cargo ships stuck off the coast of Long Beach. Ongoing truck driver shortages have further complicated the process, as there aren’t enough drivers to pick up and distribute the goods once they’re off the ships.
While these challenges have been felt at ports nationwide, some are pointing to Texas as the solution.
According to the Texas Ports Association, the Lone Star State ranks second in nation for waterborne commerce, with 616 million tons of foreign and domestic cargo, generating $450 billion in total economic value for Texas. That represents 25 percent of Texas’ gross domestic product.
Texas has led the nation in exports for 17 consecutive years. $7.8 billion of state and local taxes are created due the economic activity of Texas ports.
Texas’ central location and access to road infrastructure is also critical to efficiently distributing goods across the country.
But none of this would be possible without tort reform.
Texas has no natural deep-water ports—all of them must be dredged constantly to ensure the appropriate clearance for large vessels. In the 2000’s, a cottage industry targeting dredgers had sprung up, leading to abusive lawsuits, higher insurance costs, and ultimately, dredgers refusing to do business in Texas for fear of litigation. Even the Army Corps of Engineers was hesitant to take on projects along the Texas coast.
Thankfully, the Texas Legislature recognized the problem and passed House Bill 1602 in 2007, closing a legal loophole that had allowed these abusive lawsuits to be filed. Since then, Texas ports have thrived, providing critical capacity for imports and exports.
The Texas Legislature also addressed abusive lawsuits affecting commercial vehicles this legislative session (2021) with House Bill 19. The combination of these abusive lawsuits and increased insurance premiums layered on top of already-choppy market forces was making it difficult for some trucking companies to continue to do business. Those that remain have had to raise prices to account for their increased insurance premiums, hitting families in the pocketbook just in time for the holidays.
At a time when we should be doing everything we can to improve America’s supply chain and control rapid inflation, Texas has taken the lead on removing obstacles—like abusive lawsuits—that hurt families and consumers. Other states would be wise to follow suit.