California’s congested ports are getting a $5 billion injection of loan money that won’t solve its immediate congestion problems but will help modernize the ports in years to come.
California Gov. Gavin Newsom and U.S. Transportation Secretary Pete Buttigieg announced Thursday the state’s ports could tap funding through the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) programs.
Though the list of potential projects highlighted seems pretty extensive, the U.S. Department of Transportation said projects eligible for the funding must demonstrate how they would strengthen the supply chain.
“Our supply chains are being put to the test, with unprecedented consumer demand and pandemic-driven disruptions combining with the results of decades-long underinvestment in our infrastructure. That’s why this administration is working around the clock to address both near-term and long-term challenges to our supply chains, including investments such as those in the bipartisan infrastructure deal,” Buttigieg said.
Bloomberg News
The twin ports of Los Angeles and Long Beach have experienced a several-months bottleneck with ships stuck waiting entry. The queue is a result of the labor shortage, COVID-19-related disruptions and holiday-buying surges.
California ports in Los Angeles and Long Beach account for about one-third of U.S. imports. They are also the primary source of imports from China.
The Biden administration is taking a two-pronged approach to the port’s problems, working on efforts to relieve congestion in the near term and laying the groundwork for future improvements, said the Administration’s Port Envoy John D. Porcari. A taskforce was established earlier this year to work on supply chain issues.
“The essential problem is we’re working with our grandparents’ infrastructure investments,” Porcari said. “It just doesn’t work.”
The money would be spent on port-specific upgrades, expanding capacity for freight rail, to develop inland port facilities for increased warehouse storage, railyard and truck electrification, highway upgrades in truck corridors and grade separation crossings for rail.
The week before the announcement Newsom issued an executive order to help relieve the congestion.
The concept was designed to expedite work on a network of related projects — rather than using a piecemeal approach to bring supply chain processes into the 21st century in the critical trade corridors of California and the U.S., including around San Pedro Bay and the Inland Empire.
“The collaboration with the Biden-Harris administration will help us fast-track projects that will make our ports and infrastructure even more efficient,” Newsom said. “This partnership will help us jumpstart and support multiple infrastructure projects to improve our supply chain, making sure goods get to where they need to go faster, cheaper, and in a more environmentally-friendly manner.”
Los Angeles and Long Beach have been experiencing a massive backlog of cargo ships.
“Having our federal and state transportation agencies working in unison to help fund infrastructure is exactly what we need,” said Port of Los Angeles Executive Director Gene Seroka. “We have projects in need of funding that will reduce cargo delays, improve efficiency, reduce emissions and improve safety for waterfront workers and motorists throughout the region.”
California’s recently enacted budget includes $250 million for ports, $280 million for infrastructure projects at and around the Port of Oakland, and $1.3 billion over three years for zero-emission trucks, transit buses and school buses, including the deployment of more than 1,000 zero-emission port drayage trucks.