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Secretary of Transportation Pete Buttigieg returned from parental leave into what should have been a code red situation for his department. The United States is embroiled in the most severe shipping and supply chain crisis in recent memory, requiring significant coordination of maritime, rail, and highway transportation to move goods into stores and homes before the holiday rush. Its an issue that is wreaking political havoc on a Biden administration suffering a precipitous decline in opinion polls.
But you wouldnt know it from the way Buttigieg, the highest-ranking transportation official in the country, has smiled and waved through a parade of nonstop media coverage and conspicuous presidential speculation, including a campaign-style trip to North Carolina yesterday with Vice President Kamala Harris. Buttigieg has had very little to say about actual transportation policy during this transportation crisis, instead playing his usual set list of consultant-speak, milquetoast appeals to buy electric vehicles, and ill-fitting attempts at human enthusiasm about the bipartisan infrastructure bill. When our communications team presents me with copy, I usually cross out the word excited because I think its overused and I often rub out the exclamation points because its not always my style, Buttigieg told the press earlier this month. But we are excited, with an exclamation point, about what were going to be able to deliver.
Getting excited about deliverables would be a marked change for Buttigieg, who has thus far failed to mobilize the sweeping powers of the Department of Transportation and its battalion of subagencies to combat a supply chain crisis driven in no small part by deregulation of the transportation sector.
The root causes of the supply chain bottlenecks have far less to do with the kinds of renovations to roads, bridges, and ports in President Bidens recently signed infrastructure billlegislation Buttigieg has seized on as a personal accomplishment (and used as an opportunity to shake hands with the senators whose support hell likely be hoping for come 2024)and far more to do with the lack of oversight of corporations now profiting off the mess. As the Los Angeles Times noted earlier this month, the ocean shipping industry is on track to make more profit in 2021 than it has in the last decade. The supply chain crisis, in other words, has been a gold mine for the same firms that are supposed to be fixing it.
Freight-forwarding companies have doubled their profits, and warehouse companies have come close to doing the same. In the first half of 2021, ocean shippers saw their profits rise 2,200 percent over the equivalent 2020 span, to $23 billion. But as profits skyrocket, capacity-building to deliver and store more consumer goods, as well as fair labor practices, remains stagnant.
What actions DOT has taken have often met industry leaders on their own terms, with tactics that have done little to address the root causes of the crisis.
Take trucking. The industry has whined for months about a supposed shortage of short-haul truck drivers. This is entirely a shortage of the industrys own making. There are many times more licensed truck drivers than there is need for them. The problem is the conditions under which truckers are forced to work. Short-haul truckers are classified as independent contractors, work without employment benefits, and drive under conditions that have drawn comparisons to indentured servitude. Using a form of so-called training repayment agreement, the industry forces would-be truckers to borrow money to pay for their own equipment, locking drivers into a cycle of debt before theyve even gotten on the road.
To address this, Buttigieg has moved to increase commercial drivers licenses and penned an op-ed with Secretary of Labor Marty Walsh vaguely alluding to wage increases. But without aggressive action on working conditions and compensation, attempts to increase the labor pool only play into the hands of the trucking industry, which has sounded the alarm on a phantom trucker shortage to drive down the cost of labor nearly every year since Reagans second term.
Buttigieg has thus far failed to mobilize the sweeping powers of the Department of Transportation and its battalion of subagencies to combat the supply chain crisis.
Buttigieg has many other more effective options. He could spearhead cross-government efforts to reclassify drivers as employees instead of contractors, create a group within DOT to sanction firms engaged in illegal practices, advocate for the appointment of an ombudsman for the industry within the Consumer Financial Protection Bureau to investigate predatory vehicle loans, or prioritize federal trucking contractors who operate under collective-bargaining agreements. Addressing misclassification in particular could force trucking companies to pay a high hourly wage, instead of paying by the mile as delivery drivers are paid now. This would incentivize driver retention and motivate firms to get truckers in and out of ports faster, instead of letting them languish in unpaid traffic jams.
Its not as if officials are powerless, or dont know what gets logistics companies to actually do their job. New fines threatened at the Port of Long Beach on containers languishing at the port for days on end have gotten the attention of shipping companies, showing that raising the price of doing business can rapidly motivate companies to increase efficiency.
This is also bread-and-butter pro-labor politics. Buttigieg of all people ought to understand that truck drivers live and vote in all 50 states. He could take credit for improving working conditions for truckers, which would do more to reassure skeptics of the former mayor than yet another segment on MSNBC.
Reclassification, the most sweeping strategy, would also carry major implications for gig economy employees like those working for the rideshare apps Uber and Lyft, two companies that have built a business model around undervaluing employees. Both Walsh and Buttigieg have ties to ride-hail companies: Walshs former labor adviser is now a registered lobbyist actively lobbying DOL for Uber, while Buttigieg made headlines for marching with Uber drivers on a picket line before fundraising with an Uber executive weeks later.
Trucking isnt the only mode of transit in Buttigiegs domain, nor the only one implicated in the supply chain disruption. When it comes to rail, Biden has used his executive powers to direct the Surface Transportation Board (STB) to examine ways to force competition within the heavily consolidated rail industry. While the STB lies outside of the Department of Transportation, the Federal Railroad Administration is part of DOT and holds the ability to enforce serious civil penalties on consolidated freight shippers. This agency could also serve as a launching pad for antitrust rail commissions that could further expand competition and efficiency.
Over the summer, Biden instructed DOT to examine predatory pricing tactics in the airline industry, signaling another arena where aggressive action could cut down on price-gouging for consumers in both the travel and shipping arenas (during the pandemic, many commercial airlines started flying cargo in the absence of passengers). But so far, Buttigieg has remained largely silent on airlines aside from calling for a no-fly list for violent passengers.
On the high seas, regulating shipping practices is partially overseen by the independent Federal Maritime Commission. Biden has issued an executive order encouraging the commissions cooperation with the Department of Justice and the Federal Trade Commission in antitrust investigations. While Buttigieg cant directly regulate ocean liners, DOT does play a role in federal oversight of ports through the Maritime Administration, including the processes of cargo loading and transportation onto intermodal transitwhere many of the current problems have erupted.
Buttigieg could work with the Maritime Administration to mobilize the National Guards manpower and logistics capabilities, increasing support for easing bottlenecks. This is both legal and in line with the Biden administrations broader framing of COVID-19 and its attendant crises as a wartime-level challenge.
What Buttigieg has accomplished at DOT is the absolute minimum expected of any Biden appointee: rolling back Trump-era limits on DOT enforcement actions, returning at least one aspect of the department to the pre-2016 status quo. This at least differentiates his actions from those of former DOT head and Mitch McConnell spouse Elaine Chao, who pushed shipping deregulation that benefited her family business and used DOT resources for personal errands. Nonetheless, one would expect the shift in DOT leadership from a Republican shipping industry scion to an ostensibly pro-worker/consumer Democrat to have led to a perceptible decline in pandemic-era price-gouging by the industry.
Secretary Petes preference for starry-eyed rhetoric on cable television continues to outweigh action that would transform the now stagnant DOT into a powerful enforcement agency. His department ought to be on the front lines of the supply chain crisis. Whether Buttigieg can secure a crumbling road to the presidency through the goodwill of mayors scrambling for face time, or whether his inaction will overwhelm his charm offensive, remains to be seen. The virtue of public service, which Buttigieg loves to trumpet, is supposed to be solving the problems of the people. The people are feeling the effects of the supply chain crisis, and the man who ought to be solving it is trying to sell them a bridge.
This story has been updated to clarify the role of the Maritime Administration at the ports.