For America’s ports, this could be a “once in a lifetime opportunity.”
After signing the historic Bipartisan Infrastructure Law, touted as a “model” for rebuilding the nation’s crumbling infrastructure, President Joe Biden established an Infrastructure Implementation Task Force to ensure infrastructure projects were effectively implemented.
The U.S. Department of Transportation’s Federal Highway Administration (FHWA) announced that it would provide $52.5 billion in funding to all 50 states and the District of Columbia under the Bipartisan Infrastructure Law.
The $52.5 billion in apportioned funding for 2022 reflects an increase of over 20% compared to 2021 for Federal-aid Highway Program apportionments.
Federal Aviation Administration (FAA) will award $2.89 billion to 3,075 airports around the nation. The money can be invested in runways, taxiways, safety, and sustainability projects, as well as terminal, airport-transit connections, and roadway projects.
Calling it a “once-in-a-lifetime opportunity” to build safer and more sustainable airports, Transportation Secretary Pete Buttigieg said that the funding would enable urban, regional, and rural airports to work on projects to modernize their infrastructure.
Ports Prominent in Bill
The Maritime Administration (MARAD) announced $230 million in Port Infrastructure Development grants to improve ports, strengthen the nation’s supply chains to meet demand resulting from the rapid economic recovery over the past year, and help ease inflationary pressures. Funding for this program will be boosted by an additional $2.25 billion under the Bipartisan Infrastructure Law.
Given the importance of ports and airports, roads, bridges, etc., for the nation’s commerce and supply chains, Buttigieg made it a priority to visit in January the Ports of Los Angeles (POLA) and Long Beach (POLB) which had experienced massive congestion and delays in shipment clearances, not to mention the resulting unavailability of shipment containers leading to higher costs.
At a press event at the POLB, Buttigieg briefed journalists on the latest $52 million grant to POLB, the progress made by the Supply Chain Task Force and the effects of the Bipartisan Infrastructure Law investments to facilitate expeditious movement of goods to California in the future.
Buttigieg noted that the ports had handled a “record-breaking amount of cargo last year despite supply chain disruptions”. Shipments were up 14% in 2021 compared with the previous record in 2018. But Buttigieg acknowledged that “more work” had to be done to resolve the supply chain problems, adding that the ports needed more funding to modernize their facilities and adjacent rail lines and roads to ease bottlenecks during the “next cargo surge”.
“We’ve got to be ready for the unexpected,” he cautioned.
The huge container ship congestion in Southern California had frustrated many buyers who were anxious to get clearances of goods at the nation’s two biggest ports in time for the holiday season. The congestion at the ports along with the container shortages hit headlines not only in the U.S. but also worldwide. The bottlenecks were glaringly visible in October 2021 when over 100 ships were anchored and waiting to offload cargo, causing delays and angering environmentalists. While the backlog is down by 60%, according to POLA, Buttigieg reminded that “we are not out of the woods”.
In December, Buttigieg awarded more than $241 million in grants to bolster U.S ports, part of the Biden administration’s near-term plan to address America’s clogged supply chain with infrastructure improvements to speed the flow of goods.
The transportation money is being made available immediately for 25 projects in 19 states. Next year, the amount of money for port improvements will nearly double to $450 million in grants annually for five years under President Biden’s new infrastructure law.
The grant money includes $52.3 million to help boost rail capacity at POLB with a new locomotive facility, 10,000-foot support track and extensions of five existing tracks to speed up freight movement while cutting down the number of truck trips required to do that.
“U.S. maritime ports play a critical role in our supply chains,” said Buttigieg. “These investments in our nation’s ports will help support American jobs, efficient and resilient operations, and faster delivery of goods to the American people.”
Impact of Disruptions
John Porcari, the port envoy to the White House Supply Chain Task Force, said during a recent press conference hosted by White House Press Secretary Jen Psaki in Washington DC, that the pandemic had put the “supply chain to the test”. Porcari recalled that President Biden had asked agencies in February 2021 to produce reports identifying challenges to the supply chains for critical products and critical industries. Later in June, the President created the Supply Chain Disruptions Task Force at the cabinet level “to use every government lever to address the near-term disruptions related to the pandemic. One area he asked the task force to focus on was ports and trucking.”
Porcari said that by October the President had brought together the nation’s largest retailers, ports, and labor, and earned commitments from all to move forward a 24/7 supply chain system, also working with ports to propose fees on ocean carriers that were leaving import containers at the POLA and POLB for too long. The fees resulted in a 40% reduction in long-dwelling containers at those two ports. The Port of Savannah has also seen a drop in long-dwelling containers and ships at anchor outside its port. Retailers moving their cargo during off-peak hours have also helped remove empty containers.
“When bottlenecks emerge in the global supply chain, it can take more time for goods to reach store shelves, which can lead to price increases. That’s why the President has taken such aggressive action to alleviate these blockages, and we’ve seen significant progress,’ Porcari said, noting that “… we were able to sustain a record-breaking holiday shopping season.
Both POLA and POLB announced in January a new fee on long-dwelling empty containers, building on the success of the fee imposed on long-dwelling import containers in November. “This should help further unclog our ports,” Porcari maintained.
The administration has been also monitoring potential Omicron-related disruptions at ports overseas and at home while working to prioritize the movement of medical supplies at the nation’s ports.
Now in its third year, the Port Infrastructure Development Program (PDIP) has already awarded $492 million for 32 projects within its first two years. The program supports efforts by ports and industry stakeholders to improve facility and freight infrastructure to ensure the nation’s freight transportation needs, present and future, are met, the objective being to improve ports’ capacity and efficiency.
Chris Connors, President/CEO of the Association of American Ports Authorities (AAPA), who recently attended the meeting of the Supply Chain Task Force and CEOs with the President, highlighted the “extraordinary efforts” by the nation’s ports to keep freight moving and ease congestion while handling record container volume leading up to the holiday season.
Connors has said that it is imperative for freight program funding to be 100% multimodal. The industry was “thrilled” that the Biden administration and the Republicans “are actually mentioning ports”. The word “port” had not been previously heard. “We always heard a lot about highways, bridges, tunnels, schools, all very important but we never heard about ports,” he said.