The money won’t help ease the severe congestion that is currently creating chaos at seaports, but the two say modernizing the ports and the truck and rail systems that serve them can prevent logistical nightmares in the city. to come up.
âOur supply chains are under strain, with unprecedented consumer demand and disruption from a pandemic combined with the results of decades of underinvestment in our infrastructure,â said Buttigieg, Secretary American Transportation. âToday’s announcement marks an innovative partnership with California that will help modernize our infrastructure, address climate change, accelerate the flow of goods and grow our economy.
What the money would be spent on remains unclear. The California State Transportation Agency, also known as CalSTA, has listed port improvements, increased freight rail capacity, increased warehouse storage, electrification of trucks and rails, highway improvements and other general categories as possibilities.
At a press conference Thursday, John Pocari, President Biden’s point of contact for supply chain issues, and CalSTA Secretary David S. Kim each compared the program to “a hunting permit “.
The loan money would come from existing U.S. Department of Transportation programs that offer easy terms, including low interest rates, loan guarantees, and long repayment periods, as well as money from the loan. ‘State and public-private funding.
CalSTA said the agreement “allows California to expedite work on a network of related projects – rather than using a piecemeal approach – that will collectively help grow the economy, improving the environment, facilitating the movement of imports and exports, and building supply chain resilience along critical US and California trade corridors, including around the Bay of San Pedro and the Inland Empire.
No details were provided on what constitutes this network, how the loans will be distributed, or to whom.
Earlier in October, Newsom ordered state agencies to develop longer-term proposals to support port operations and the movement of goods, to be considered for its January 2022 budget proposal.
This year, the included state budget includes $ 250 million for ports, $ 280 million for infrastructure projects in and around the Port of Oakland, and $ 1.3 billion over three years for ports. Transit buses, school buses and zero emission trucks, including over 1,000 dumped at the port. trucks.
Current logistics links are not unique to California. Ports around the world have become clogged as demand for goods shipped has increased over the past year, largely due to the availability of COVID-19 vaccines that have brought economic activity back to normal.
But the longer-term problems plaguing California’s ports threaten not only the state, but the entire U.S. economy. The San Pedro Bay ports – Los Angeles and Long Beach – move about 40% of all containerized cargo entering the United States each year and about 30% of containerized exports.
Ports are under tremendous pressure as overall container traffic at the country’s largest ports has increased by 47% since 2010, according to Logistics Management magazine.
Meanwhile, delays at the Los Angeles and Long Beach ports have increased at least since 2014, according to data from the Harbor Trucking Association.
California ports face increasing competition from southern and eastern US ports, some of which are investing heavily in port modernization, spurred by the Panama Canal expansion in 2016, which expanded capacity and stimulated import traffic from China and other Asian countries.
The Port of Houston recently widened its channels and added taller cranes, while adding new automation systems for container routing and inventory management.
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