California invests $2.3 billion into its ports

The Port of San Pedro in Los Angeles CA with San Vicente Bridge in the Long Beach area with shipping containers stuck at harbor. Congestion at the Port of Los Angeles has been getting worse for months and shows no signs of letting up before the holidays. The port in San Pedro is the busiest it’s been in its 114-year history as people buy more online than ever before.

Posted on January 13, 2022

California Governor Gavin Newsom has unveiled his 2022-2023 state budget proposal which includes a planned investment of $2.3 billion for California ports.

The proposal, also known as “The California Blueprint”, aims to enhance operations at the Port of Los Angeles and the Port of Long Beach by addressing recent supply chain challenges brought on by the COVID-19 pandemic.

The plan for the ports includes:

  • Port infrastructure and goods movement: $1.2 billion has been awarded to port-related projects that increase goods movement capacity on rail and roadways serving ports and at port terminals. This includes railyard expansions, new bridges, and zero-emission modernisation projects.
  • Zero-emission equipment and infrastructure: $875 million will go to funding this clean equipment alongside short-haul (drayage) trucks, and infrastructure.
  • Workforce training: $110 million is set to be invested in training campuses to support workforce resilience in the face of supply chain disruption and accelerate the deployment of zero-emission technologies.
  • Commercial driver licenses: $40 million will be set aside to enhance the state’s capacity to issue commerical driver’s licenses.
  • Operational and process improvements: $30 million will be used for the Governor’s Office of Business and Economic Development to provide funding for operational and process improvements at the ports. This could include enhancing the movement of goods and improving data interconnectivity between the ports to enable efficient cargo movement, reduce congestion, and create opportunities to increase cargo volume.

Gene Seroka, Executive Director of the Port of Los Angeles, welcomed Governor Newsom’s announcement, saying “Our supply chain challenges require both near-term and long-term solutions. I applaud Governor Newsom for meeting the moment with bold leadership.

“The Governor’s budget allocates $2.3 billion for ports to address bottlenecks in our supply chain, advance our efforts to decarbonise the freight system, and ensure a robust and resilient workforce continues to move goods on behalf of the state and nation.

“These funds, together with our own dollars, private investment and new federal port investment in the Infrastructure Investment and Jobs Act, will prove to be a powerful combination that accelerates delivery of critically needed projects like a first-of-its-kind goods movement workforce training campus, cargo support facilities, digitalisation enhancements, and zero-emission equipment and charging infrastructure. This suite of investments positions California’s system of ports to be leaders in operational efficiency, sustainability, and job creation.”

Mario Cordero, Executive Director for the Port of Long Beach, also praised the new state budget, adding “The governor’s proposed budget includes significant and targeted investments in the state’s seaports that will improve the efficiency, sustainability and velocity of goods movement. The COVID-19 pandemic has underscored the importance of the state’s port and supply chain, so these investments are very well-timed.

“With $2.3 billion designation for the port – and supply chain-related needs, the state of California will make a decisive step forward in nurturing the beneficial economic impacts that international trade brings to the state. The funding will help to strengthen the vigorous capital improvement and environmental sustainability programs at the Port of Long Beach.

“With $875 million to help fund clean trucks and terminal equipment, the budget is also plugging into the port’s ongoing transition to zero-emissions operations. The budget also includes $110 million for a state-of-the-art workforce training centre planned in the San Pedro Bay ports complex to improve crucial dockworker skills. We welcome Governor Newsom’s visionary plan for port-related funding.”

The Port of Los Angeles has also recently predicted 2021 to be its best-performing year in its history, handling between 10.7 million TEU and 10.8 million TEU.

While final November 2021 figures are yet to be finalised, it is estimated that around 811,706 TEU was processed in the month, a decline of 8.8% compared to November 2020. According to Seroka, this decline comes as, of the 86 container vessels that arrived in the month, half were less than 5,300 TEU in capacity.

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