Free Markets

Restrictive Zoning Laws Worsened the Supply Chain Crisis

Plus: America's crackdown on Big Tech gives cover to Russia's crackdown on Big Tech, high inflation likely to continue into next year, and more...


The major backlog at one of America's busiest ports has been worsened by strict zoning laws that limit where empty shipping containers can be stacked after being unloaded.

Until officials in Long Beach, California, issued an emergency order this weekend to temporarily relax those rules, it was illegal for trucking companies to store more than two shipping containers on top of one another in their yards. That's contributed to a massive bottleneck at the terminal yards of trucking companies serving both the Port of Los Angeles and the Port of Long Beach—a bottleneck that's being felt in supply chain shortages across the whole country.

As Ryan Petersen, CEO of Flexport, a logistics firm, explained in part of a detailed Twitter thread over the weekend, the artificial limitation on stacking shipping containers means there is no more room for empty containers in some trucking yards:

In short, getting the two major ports to operate around-the-clock—as the White House has urged them to do—doesn't mean much if there is nowhere for the unloaded shipping containers to go. "It's a true traffic jam," writes Petersen.

There doesn't seem to be any safety-based reason for such a policy, as shipping containers are routinely stacked higher at other ports and while being carried across the open sea. Long Beach's prohibition on stacking more than two-high is "an aesthetic measure intended to preserve visual sightlines in the neighborhood," according to The Maritime Executive, a trade publication.

Those rules won't be enforced for the next three months under an emergency order issued this weekend. Now, trucking companies and warehouses will be allowed to stack up to four containers vertically—effectively doubling their capacity. "The city will work during the next 90-day period to assess the situation and effectiveness of this solution and any impacts on the surrounding areas," Long Beach officials said in a statement.

So there you have it. All it takes to get small, temporary relief from California's excessive zoning regulations is a national supply chain crisis that threatens to ruin Christmas.

But the restrictive zoning rules in Long Beach and the backups they've caused at the port don't just highlight the unintended negative consequences of government policy. The situation also demonstrates how difficult it is for the government to actually solve the supply chain issue—and not just because the head of the federal Commerce Department seems to be confused about the difference between "supply" and "demand."

The bigger problem is that you can't move shipping containers simply by throwing money at them. "With Lehman [Brothers, the financial firm that collapsed in 2008, triggering the subprime mortgage crisis] the government could just print tons of money to flood the banks with liquidity," Petersen told Bloomberg on Sunday. "Here we need real-world solutions."


Russia's internet regulator, Roskomnadzor, is using "black box" technology to censor digital media and slowing sites like Facebook, Twitter, and YouTube if they do not comply with orders to remove offending content, The New York Times reports.

Given all the talk in Washington about unfair "censorship" online, you might expect American politicians to be a bit more upset about, you know, actual censorship. Instead, the Times reports:

Russia's censorship efforts have faced little resistance. In the United States and Europe, once full-throated champions of an open internet, leaders have been largely silent amid deepening distrust of Silicon Valley and attempts to regulate the worst internet abuses themselves. Russian authorities have pointed to the West's tech industry regulation to justify their own crackdown.

"It's striking that this hasn't gotten the attention of the Biden administration," said Michael McFaul, an American ambassador to Russia in the Obama administration. He criticized Apple, Facebook, Google, and Twitter for not speaking out more forcefully against Russia's policies.


Buckle up for several more months of high inflation. Treasury Secretary Janet Yellen* told CNN's Jake Tapper on Sunday that she expects "the inflation rate will remain high into next year because of what's already happened. But I expect improvement by the middle to end of next year, second half of next year."

Inflation for the 12-month period ending in September came in at 5.4 percent, largely driven by sharply rising food and fuel costs.


• Children between the ages of five and 11 could be authorized to get COVID-19 vaccinations as soon as next month, White House medical adviser Anthony Fauci predicted on Sunday.

• Facebook's bad year might be about to get a whole lot worse.

• A judicial inquiry into Eric Garner's death at the hands of a New York City police officer will begin Monday. A dozen witnesses, including cops involved in the incident, will testify about what they saw.

• Hollywood has been living in the Matrix since, well, the debut of The Matrix: 

• Popstar Ed Sheeran, who was supposed to perform on Saturday Night Live next week to promote a new album, says he's tested positive for COVID-19.

• "They don't know what it is, and we don't know what it is."

• A Virginia school board is suing a woman for possessing documents the school board provided to her via the Freedom of Information Act.

• Hope it was a Pokemon with powerful healing abilities, at least:

*CORRECTION: The original version of this article incorrectly identified Treasury Secretary Janet Yellen's title.