Fact check: Cargo backlog due to supply chain snags, not executive order

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The claim: The backlog of cargo at US ports is because ships are ‘banned from doing business on our soil’

Fact check: Cargo backlog due to supply chain snags, not executive order
© Robert Hanashiro, USA TODAY Cargo containers are offloaded from a ship in the Port of Long Beach on Oct. 16, 2021.

The backlog of cargo ships in Southern California hit an all-time high Oct. 19 as more than 100 vessels waited to unload at the ports of Los Angeles and Long Beach. President Joe Biden has announced the ports will work around the clock to clear out the shipping containers, although some experts have doubts about the plan.

Some social media users have come up with alternative explanations for the supply chain backup: restrictive trucking regulations, the Biden administration’s policies and now a claim about Trump-era executive orders.

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“Is it possible all those ships locked out at sea, are stuck because they’ve been banned from doing business on Our soil?” reads an Oct. 21 Facebook post, which accumulated nearly 700 shares within two days.

As evidence, the post cites “EO#13959,” an executive order signed by former President Donald Trump in November. The order banned American investments in companies linked to the Chinese military.

Fact check: Shortages due to rising demand, supply chain disruptions

“Go back to EO signed by 45,” reads a graphic in the Facebook post. “No goods will be allowed in ports by countries complicit in election fraud. Understand now?”

Similar posts have accumulated hundreds of interactions on Facebook and Instagram, according to CrowdTangle, a social media insights tool.

But they’re wrong.

“The online sources are not accurate,” Susan Golicic, director of the Supply Chain Management Forum at Colorado State University, said in an email. “These ships are allowed to enter the ports to be loaded and unloaded.”

USA TODAY reached out to the Facebook user who shared the claim for comment.

Fact check: Cargo backlog due to supply chain snags, not executive order
© Robert Hanashiro, USA TODAY Cargo containers wait to be transported after being offloaded at the Port of Los Angeles, Oct 16, 2021 in San Pedro, Calif. Supply chain issues have caused shortages of goods throughout the country with cargo ships waiting off shore in Southern California to offload.

Executive order unrelated to cargo backlog

The Trump-era executive order cited in the Facebook post prohibits Americans from investing in companies linked to the Chinese military. Experts say it has no bearing on the cargo backlog at U.S. ports.

“This online claim seems to be completely off-base,” Morgan Finkelstein, a spokesperson for the Treasury Department’s Office of Terrorism and Financial Intelligence, said in an email. “The (Chinese military-industrial complex company) prohibitions only relate to purchases or sales of publicly traded securities of certain identified companies.”

The Facebook post cites some of those companies. The order, as amended by both Trump and Biden, is aimed at prohibiting investments in “Chinese companies that undermine the security or democratic values of the United States and our allies.”

However, the Treasury Department clarifies on its website that the executive order does not apply to the purchase or sales of goods or services. And there’s no other evidence to support the Facebook post’s claim.

Fact check: California trucking regulations aren’t to blame for cargo backlog

“To my knowledge, none of the ships in the ports are carrying containers from companies banned from doing business in the U.S.,” Patrick Penfield, professor of practice in supply chain management at Syracuse University, said in an email. “Honestly, that would make no sense.”

Mikaella Polyviou, an assistant professor of supply chain management at Arizona State University, used the subscription service Panjiva to analyze ocean bills of lading associated with the companies on the Treasury Department’s list. She told USA TODAY the data she found suggests “the ships waiting at the ports are extremely unlikely to have goods from these banned companies.”

“The majority of these banned companies do not appear as ‘shippers’ on any import records since 2007,” Polyviou said in an email. “A few companies do appear as ‘shippers,’ but those imports are minimal and mostly halted around 2020.”

Supply chain issues to blame for backup

Instead of delays associated with trade restrictions, the cargo backlog is due to a complex combination of supply chain issues stemming from the coronavirus pandemic, experts say. One of the biggest factors is rising demand.

During the height of the pandemic, consumer spending dropped by record numbers. As more Americans got vaccinated against COVID-19 and ventured outside their homes, spending increased. Now, retail sales continue to rise.

The economic seesaw resulted in an overwhelmed supply chain.

“To run optimally, logistics has to be well-planned and coordinated,” David Correll, co-director of the Massachusetts Institute of Technology’s FreightLab, previously told USA TODAY. “The pandemic and the homebody economy wreaked havoc on those networks, leaving supply chains unbalanced and out of whack.”

Fact check: Photos of bare, fully stocked grocery store shelves shared online to support false claim

Staffing gaps in the logistics industry, container shortages and rising shipping costs have also contributed to supply chain problems. Then there are production cutbacks in countries like China, which has been grappling with a far-reaching power shortage.

“The cargo backlogs are mostly due to shortages in shipping capacities: There are not enough dock workers and equipment handling containers at ports, and not enough truck drivers picking up the containers unloaded from container ships,” Tao Lu, an associate professor of operations and information management at the University of Connecticut, said in an email.

Our rating: False

Based on our research, we rate FALSE the claim that the backlog of cargo at U.S. ports is because ships are “banned from doing business on our soil.” The Treasury Department and supply chain experts say the executive order cited in the Facebook post is unrelated to the backup. There is no evidence ships waiting off the coast are carrying cargo for companies banned from doing business in the U.S. The primary reasons for the supply chain problems are rising consumer demand, increased shipping costs, production constraints and labor shortages around the world.

Our fact-check sources:

  • The Guardian, Oct. 20, Backlog of cargo ships at southern California ports reaches an all-time high
  • USA TODAY, Oct. 18, Fact check: California trucking regulations aren’t to blame for cargo backlog
  • USA TODAY, Oct. 22, Fact check: Shortages due to rising demand, supply chain disruptions
  • Federal Register, Nov. 17, Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies
  • Reuters, Nov. 13, Trump bans U.S. investments in companies linked to Chinese military
  • CrowdTangle, accessed Oct. 23
  • Tao Lu, Oct. 22, Email exchange with USA TODAY
  • Morgan Finkelstein, Oct. 23, Email exchange with USA TODAY
  • U.S. Department of the Treasury, accessed Oct. 23, Non-SDN Chinese Military-Industrial Complex Companies List (NS-CMIC List)
  • Federal Register, Jan. 13, Amending Executive Order 13959Addressing the Threat From Securities Investments That Finance Communist Chinese Military Companies
  • The White House, June 3, Executive Order on Addressing the Threat from Securities Investments that Finance Certain Companies of the People’s Republic of China
  • U.S. Department of the Treasury, accessed Oct. 23, Frequently Asked Questions
  • Patrick Penfield, Oct. 22, Email exchange with USA TODAY
  • USA TODAY, Oct. 15, Supply chain issues: What are they and how will shortages impact the holiday shopping season?
  • Nick Vyas, Oct. 22, Email exchange with USA TODAY
  • The White House, June 3, FACT SHEET: Executive Order Addressing the Threat from Securities Investments that Finance Certain Companies of the People’s Republic of China
  • USA TODAY, Oct. 22, Biden says running LA ports 24/7 will help save Christmas shopping. It’s not that simple, experts warn.
  • USA TODAY, July 30, 2020, US economy contracted record 32.9% in Q2 amid state shutdowns, COVID-19 contagion fears
  • USA TODAY, April 29, The economy grew 6.4% in Q1 as stimulus checks, COVID-19 shots, looser business constraints spurred more spending
  • Associated Press, Oct. 16, Retail sales are climbing despite sticker shock in grocery stores, car lots and restaurants
  • Los Angeles Times, Oct. 14, When will supply chains be back to normal? And how did things get so bad?
  • CalMatters, Oct. 14, Port backlogs sum up California’s COVID crisis
  • Susan Golicic, Oct. 22, Email exchange with USA TODAY

Thank you for supporting our journalism. You can subscribe to our print edition, ad-free app or electronic newspaper replica here.

Our fact-check work is supported in part by a grant from Facebook.

Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
Fact check: Cargo backlog due to supply chain snags, not executive order
In an aerial view, container ships (Top R) are anchored by the ports of Long Beach and Los Angeles as they wait to offload on Sept. 20, 2021 near Los Angeles. Amid a record-high demand for imported goods and a shortage of shipping containers and truckers, the twin ports are currently seeing unprecedented congestion. On Sept. 17, there were a record total of 147 ships, 95 of which were container ships, in the twin ports, which move about 40 percent of all cargo containers entering the U.S. Cargo containers wait to be transported after being offloaded at the Port of Los Angeles, Oct 16, 2021 in San Pedro, Calif. Supply chain issues have caused shortages of goods throughout the country with cargo ships waiting off shore in Southern California to offload. Cargo containers are offloaded from a ship in the Port of Long Beach on Oct. 16, 2021. Trucks line up to enter one of the piers at the Port of Los Angeles on Oct 16, 2021. Empty shelves are seen at an IKEA store on Oct. 15, 2021 in the Red Hook neighborhood of Brooklyn borough in New York City. Executives at IKEA have warned of supply chain disruption that could last into next year leaving some stores without certain items. Stores in North America are expected to be hardest hit by product shortages first and then followed by stores in Europe. A truck drives past cargo containers stacked at the Port of Los Angeles, the nation’s busiest container port, on Oct. 15, 2021 in San Pedro, Calif. As surging inflation and supply chain disruptions are disrupting global economic recovery, the Washington-based IMF has projected that global gross domestic product will grow by 5.9% this year — a 0.1 percentage point lower than its July estimate. The Port of Los Angeles is transitioning to 24/7 operations amid efforts to ease supply backlogs. Trucks move past cargo containers at a Bayonne port on October 15, 2021 in Bayonne, N.J. In an aerial view, trailers sit idle at a Virginia Inland Port facility Oct. 14, 2021 in Front Royal, Va. A lack of certified commercial drivers has added to the disruptions in the economic supply chain as the United States tries to bounce back from the coronavirus pandemic. Shipping containers are stacked on a dock at the Port of Oakland on Oct. 14, 2021 in California. Disruptions to the global supply chain are continuing with extreme port congestion, a lack of truck drivers and a microchip shortage. A cargo ship passes below the Francis Scott Key Bridge while leaving the Port of Baltimore Oct. 14, 2021, in Baltimore, Md. Closed factories, clogged ports, no truck drivers — up and down the global supply chain there are problems, raising concerns that it could disrupt the global economic recovery. Containers are unloaded from ships at the Port of Los Angeles, in Los Angeles, California, Oct. 14, 2021. The Port of Los Angeles and its longshoreman union will provide 24-hour service to alleviate backlogs that have exacerbated global supply chain problems, the White House said Oct. 13, 2021. Semi-trailer trucks move along Lincoln Highway while using the indirect interchange from Interstates 70, the Pennsylvania Turnpike and U.S. Route 30 on Oct. 14, 2021 in Breezewood, Pa. A lack of certified commercial drivers has added to the disruptions in the economic supply chain as the United States tries to bounce back from the coronavirus pandemic. In an aerial view, trucks carrying shipping containers line up as they prepare to be offloaded onto a container ship at the Port of Oakland on Oct. 14, 2021. Trucks hauling shipping containers leave the EverPort terminal at the Port of Oakland on Oct. 14, 2021. Cargo is removed from an international flight at Rickenbacker International Airport in Columbus, Ohio, Oct. 11, 2021. U.S. wholesale prices jumped 8.6 percent in the 12 months ended in September, the biggest increase in over a decade, according to US Labor Department data released on Oct. 14, 2021. It was the sixth consecutive record for the annual measure, which has tracked rising prices for firms as they deal with global supply chain bottlenecks and worker shortages amid the sudden rebound in demand as economies reopen from the Covid-19 pandemic. Cargo is removed from an international flight at Rickenbacker International Airport in Columbus, Ohio, Oct. 11, 2021. Containers are loaded onto trucks at the Port of Los Angeles, Oct. 14, 2021. A train load of containers heads to the Port of Los Angeles on Wednesday afternoon, Oct. 13, 2021. The supply chain squeeze has caused climbing prices and delays in delivery that are threatening the U.S. economy and holiday shopping. A surfer waits for waves at Huntington Beach, Calif. on Sept. 25, 2021 as container ships wait offshore. A record number of cargo ships have been stuck waiting outside the ports of Los Angeles and Long Beach to have cargo unloaded, amid backups in America’s two busiest ports. A cargo ship moves under the Bayonne Bridge as it heads out to the ocean on Oct. 06, 2021 in Bayonne, N.J. A cargo ship filled with containers moves through New York Harbor as it heads out to the Atlantic ocean seen from the Staten Island ferry on Oct. 12, 2021 in New York City.

This article originally appeared on USA TODAY: Fact check: Cargo backlog due to supply chain snags, not executive order

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