U.S. to Provide California Billions in Loans for Port Infrastructure

Promoting that it is the first time the federal government has joined with an individual state to develop and fund a comprehensive approach to managing the supply chain, the U.S. Department of Transportation (USDOT) and California announced a strategic partnership focusing on California’s ports. The federal government will provide loans valued up to $5 billion to support a comprehensive, long-term approach towards enhancing California’s supply chain infrastructure.

Not waiting for the broader infrastructure legislation that remains bogged down in the U.S. Congress, USDOT plans to tap existing programs to help California expedite work on a network of related projects that collectively will help facilitate the movement of imports and exports, and modernize and expand the supply chain. The program focuses on the area around San Pedro Bay and the Inland Empire. 

Earlier this year, the heads of the ports of Los Angeles and Long Beach had called for the federal government to support the expansion for the future of the supply chain. Speaking at the launch event in California, officials said these efforts were focused on the longer-term to maintain the flow of goods while other programs were focused on addressing the current backlog at the ports.

“The Emerging Projects Agreement today provides the State of California with a foundation to build a comprehensive program of public and public-private projects that will help build a stronger, more resilient goods movement chain that grows the economy by exporting and importing more goods,” said the Administration’s Port Envoy John Porcari. 

Speaking at the announcement, they said they believe the partnership between the federal government and state can help kick-start construction to deliver benefits to the transportation supply chain and U.S. consumers in the future. A broad range of projects was outlined including expanding the rail freight yards, developing inland port facilities for increased warehouse storage, highway upgrades to improve truck travel times, and increased railyard and truck electrification.

Under the Emerging Projects Agreement, the Build America Bureau at USDOT will support CalSTA in developing California infrastructure projects. The federal government will assist project sponsors in exploring innovative financing opportunities for billions in infrastructure investment, in part through existing USDOT credit assistance programs.

In the near term, the state and federal governments are continuing to proceed with previously announced projects including a program announced by California seeking to identify land immediately available for container storage and easing road restrictions. The federal government is also working with companies from across the supply chain to expand supply chain operations to 24 hours a day, 7 days a week, and helping them to make faster handoffs to each other. So far, both the ports of Los Angeles and Long Beach, the ILWU, Union Pacific Railroad, and retailers, including Walmart, Target, FedEx, UPS, and The Home Depot, have committed to expanding hours. Further, USDOT is working with local and state DMVs to cut bureaucratic red tape and make it easier for truck drivers to obtain commercial driver’s licenses. They said that has resulted in DMVs issuing 60 percent more CDLs this year compared to last.

“The COVID-19 pandemic put a spotlight on California’s ports and the importance of our state’s infrastructure in moving goods throughout the U.S. and around the world,” CalSTA Secretary David S. Kim said. “Today’s agreement will go a long way toward quickly upgrading infrastructure to support a more efficient and resilient supply chain that will flex California’s power in global trade.”

California’s recently enacted state budget also 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.