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White House unveils funding to ease supply chain crisis, with LA and Long Beach ports being a top priority

Containers are picked up and dropped off at the Port of Long Beach’s Pier G, Thursday, June 10, 2021. Photo by Brandon Richardson.

The Biden administration announced plans on Tuesday to identify and pay for possible upgrades to U.S. ports within the next 90 days in the hopes of ultimately tamping down the inflation being caused by ships waiting to dock and a shortage of truck drivers to haul goods. The ports of Long Beach and Los Angeles specifically will be a top priority, a senior administration official told the Long Beach Business Journal.

As the U.S. emerges from the coronavirus pandemic, the economic recovery has been hampered by congested and aging ports. The mix of inflation and the potential for empty store shelves during holiday shopping has created a sense of frustration for many Americans and hurt President Joe Biden and Democrats politically.

Senior administration officials said Tuesday that the Transportation Department would allow port authorities to redirect any leftover money from grant projects to address the supply chain issues. For example, the Georgia Ports Authority will use $8 million to convert its inland facilities for the port of Savannah into container yards, freeing up dock space and speeding the flow of goods to their final destinations.

“The supply chain in this country is in serious need of investment in capital improvements. This funding allows us to fast-track infrastructure projects that will speed the movement of goods and allow our ports to grow sustainably amid forecasted cargo growth into the future,” Port of Long Beach Executive Director Mario Cordero, who is also the current chairman of the American Association of Port Authorities, said in a statement Tuesday. “The President clearly recognizes how important ports and the supply chain are to the U.S. economy.”

Port of Los Angeles officials declined to comment.

White House officials spoke on the condition of anonymity to discuss the forthcoming plans, which come on the heels of the House backing the bipartisan infrastructure package late Friday. The package includes $17 billion to improve coastal and land-based ports that can help to tackle the challenges in the longer term.

“If you look at where investment dollars can do more,” a senior official told the Business Journal, “the ports of Los Angeles and Long Beach stack up very well.”

Rail, roads and electrification upgrades are some examples of the types of projects that will be considered for the funding, the senior official said.

Biden’s team is moving straight ahead in promoting the possible benefits from the broader infrastructure package, though they’ve largely shied away from claiming that Americans could see clear and demonstrable changes to their lives before the 2022 midterm elections. The focus, instead, has been on how the spending on roads, bridges and broadband will help the U.S. economy compete against the rest of the world.

The president in remarks to Democratic supporters on Tuesday signaled that he will look to remind voters in the months ahead of the infrastructure win. He noted “the last president” promised to pursue legislation but failed to deliver.

“So it was left to us,” Biden said at the virtual event hosted by the Democratic National Committee. “We got the job done.”

Administration officials said the ports initiatives being announced Tuesday would make the supply chain faster, more efficient and environmentally friendly in the medium to longer term.

Biden will highlight the administration’s efforts by visiting Baltimore’s port on Wednesday. It’s part of a broader effort to show that the administration will tackle the inflation that has left Americans feeling more pessimistic about the economy. Updated figures for the consumer price index will be released Wednesday, with the previous report showing prices were 5.4% higher than a year ago.

The Baltimore trip is designed to highlight the types of investments that the administration believes will help unclog the supply chain. The port in Baltimore is adding container cranes and adding a 50-foot berth where ships can be unloaded. The administration has also approved grants so that the Howard Street Tunnel—a train artery that opened in 1895—can be expanded to ferry double-stacked containers on railcars.

The Biden administration earlier helped broker an agreement to increase the hours of operation at the Port of Los Angeles, but it’s been difficult to immediately fix this challenge.

Additional steps include launching a $240 million grant program in the next 45 days to modernize ports and marine highways. Within 60 days, the government wants to identify repair projects and opportunities to deepen harbors for larger ships that can be a guide for more than $4 billion in construction by the Army Corps of Engineers.

The government will also look over the next 90 days at which ports of entry should be upgraded and expanded as part of a $3.4 billion investment. It also plans within 90 days to open the first round of more than $475 million in grants for ports made possible through the newly passed infrastructure package.

The Transportation Department intends to publish a playbook for states on freight movement and issue guidance on best practices, so that the value of the infrastructure investments can be maximized. There will also be a request for information by the Transportation Department to improve data collection and sharing to improve the efficiency and transparency of the supply chain.

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