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Seeing the current scenario of the problems in global supply chains, President Biden managed to allocate $17 billion for the improvement of port infrastructure - maritime, air, and land - in the latest Infrastructure Law signed on November 15.
OVERVIEW
In 2018, the United States’ ports accounted for more than 30 million jobs and approximately 26% of the country's GDP. However, ports face great challenges and have demonstrated a need for greater investments to modernize their processes and capacities.
Only four ports in the US are among the world's 50 busiest ports, but none are in the top 10. A limiting factor for US seaports is the lack of capacity to receive cargo from larger ships due to outdated infrastructure. This has resulted in fewer containers flowing through the US, greatly affecting costs to its economy and global competitiveness.
Seeing the current scenario of the problems in global supply chains, President Biden managed to allocate $17 billion for the improvement of port infrastructure - maritime, air, and land - in the latest Infrastructure Law signed on November 15. This represents the largest investment in ports infrastructure in US history. These resources will strengthen the resiliency of the US’s supply chain, creating decent and well-paying jobs, while reducing the country’s dependency on China.
According to the White House, the following immediate actions will be taken:
Support creative solutions to alleviate supply chain congestion by allowing flexibility in port grants.
The Department of Transportation (DOT) will allow port authorities across the country to redirect their project cost savings to address supply chain challenges.
Additional flexibilities will be sought to support infrastructure needs in cargo movement.
Relieve congestion in the Port of Savannah by financing the expansion of five container yards.
The Georgia Port Authority will be able to reallocate more than $8 million to convert existing inland facilities into five container yards in Georgia and North Carolina.
Under the plan, the Port of Savannah will transfer containers by rail and truck inland so they can be closer to their final destination, allowing more space to clear up near the port. This will accelerate the flow of goods in and out of the Port of Savannah, which is the primary port for containerized agricultural exports.
Similarly, the following actions will be taken with a long-term plan:
Launch programs to modernize ports and sea highways with more than $240 million in grants in the next 45 days.
The Port Infrastructure Development Grant program is the first and only federal grant program fully dedicated to investments in port infrastructure.
The DOT will provide $230 million in funding for this program and $13 million for the Marine Highways Program to support the water freight transportation service.
Identify projects for the construction of a US Army Corps of Engineers in seaports and inland waterways within the next 60 days.
This plan calls for more than $4 billion in funding to repair aging infrastructure and deepen ports in order to receive larger cargo container ships.
Prioritize key ports for modernization and expansion within the next 90 days.
This plan will identify $3.4 billion in investments to improve inspection facilities and create a more efficient foreign trade environment along the US’s border with Canada and Mexico.
Open competition for the first round of port infrastructure grants within the next 90 days.
The DOT announced $475 million in additional funding for port and maritime highway infrastructure.
Additional investments for land freight transportation
In addition to the investments announced for port infrastructure, the White House also seeks to direct money to transportation infrastructure. This includes $110 billion to repair roads and bridges, which will significantly improve the movement of goods. The plan includes:
Develop a comprehensive cargo movement strategy manual for states.
The DOT will publish a strategy manual for states on how to use grant and loan programs throughout the Department to support the movement of goods and combat freight bottlenecks.
This manual will highlight the policies and financing channels available to strengthen their supply chains. It is worth mentioning that under the new Infrastructure Law, states will receive more than $50 billion annually to repair and modernize their roads.
Incorporate worldwide freight planning best practices into state freight plans.
The DOT will publish guidance for state freight plans to incorporate the world's best freight planning practices.
The Infrastructure Law strengthens the freight transportation plans that States must develop to include their cargo flows, inventory of commercial ports, impacts of e-commerce on transportation infrastructure, and an assessment of truck parking facilities.
Data sharing to support supply chains
The White House outlined a strategy to strengthen the digitization of foreign trade. All actors in the supply chain have made progress in digitizing internal operations, but efficient data exchange is lacking for cargo to move smoothly and at lower costs and risks.
Because of this, new data standards were requested for the movement of goods. The DOT will work with the Federal Maritime Commission to publish a request for information on standardized data exchange requirements for cargo movement in transportation. Standardized data is an important first step in ensuring interoperability among supply chain actors, providing greater transparency, resilience, fluidity, competitiveness, and efficiency in the US supply chain.