How Newsom’s proposed budget will help LA, Long Beach ports strengthen supply chains, reduce pollution – Orange County Register

The ports of Los Angeles and Long Beach could receive a stream of cash next fiscal year, with Governor Gavin Newsom’s budget proposal spending $2.3 billion on state ports that would help train workers, reduce air pollution and finance infrastructure projects.

In particular, infrastructure spending takes on national significance as LA and Long Beach, the country’s two busiest ports, remain at the heart of a global supply chain bottleneck, threatening to slow growth. America’s economic recovery after the coronavirus pandemic.

Port-related money from Newsom’s $286.4 billion spending plan, which the governor introduced on Monday, January 10, is focused on fixing supply chain vulnerabilities in the long term. .

If enacted, those billions of dollars, along with announced cash flows and future transfers from the federal government, would help modernize California’s ports, but also Newsom and President Joe Biden has consistently pledged to help since the steady increase in merchandise that began in the second half of 2020.

“These funds, along with our dollars, are private investments and new federal port investments under the Employment and Infrastructure Investment Act,” said Port of LA CEO Gene Seroka. said in a statement Monday afternoon, “will prove to be a powerful combination that helps accelerate the delivery of critically needed projects such as the first freight workforce training campus, the supporting freight, digital innovation, zero-emission devices, and charging infrastructure. ”

Newsom’s spending plans for ports include:

• $1.2 billion for port and freight infrastructure.
• $875 million for zero-emission port equipment, short-haul trucks and infrastructure.
• $110 million for a training campus to support the workforce.
• $40 million to enhance the state’s capacity to issue Commercial Driver’s Licenses.
• $30 million in funding for process and operational improvements at ports, which could include improving data connections between ports to move goods more efficiently and reduce congestion.

“While the state has taken several actions to minimize supply chain disruptions,” Newsom’s proposed budget said, “additional investments are needed to support chain resilience.” supplies and transforms the way California moves goods and people in ways that reduce greenhouse gas emissions and consider environmental impacts on communities. ”

Trade experts have long said the supply chain – a complex and nuanced system that includes foreign factories and seaports, shipping lines, ports and port operators in the United States, Shipbuilders, transport and railway companies, and warehouses – very easily broken.

And those fears have come true amid the coronavirus pandemic.

After an initial cargo crash caused by both factory closures in China and the first batch of US home orders, imports skyrocketed in the second half of 2020. Both the LA and Long Beach ports, bringing in about 40 pcs. % of the country’s total imports, regularly breaking records.

And that increase continues into 2021.

Although no final numbers are available, Los Angeles is expected to hit the 10 million mark for the 20-foot equivalent unit – a measure of general cargo – within the last year, becoming the first port in the Western Hemisphere. do like that. Long Beach is set to pass 9 million for the first time.

But the uptick in consumer habits turning to just shopping more during the pandemic, has also created major problems.

During the worst of the supply chain crisis, more than 80 ships waited along the Southern California coast to find openings at ports, when there would normally be no such queues. They waited two weeks to arrive.

Truckers complain that there isn’t enough chassis to actually move the crates. The warehouse is overflowing. Wilmington residents complain about those empty containers that block their way sometimes.

Officials from state and federal governments, both ports, terminal operators and ocean carriers and other stakeholders have finally come together offer short-term fixes before the 2021 holiday season – worry that giftees won’t be able to find what they want and recovery will stall.

Ports have extended their opening hours for trucks. They seek more space to store the containers while the cities of LA and Long Beach relax some of their stacking regulations. The DMV opened more locations for commercial driving tests to help alleviate truck driver shortages. Ocean carriers have created a new queuing system. Ports have also been created – although they are not implemented yet – a fee against the ocean carrier Their imported containers are still too long at the terminals.

Since officials announced that fee at the end of October, ports have seen a combined 45% drop in aging cargo, they said.

A second fee for empty containers will also begin on January 30.

Both officials have repeatedly said that such short-term relief is not enough.

“Our supply chain challenges require both short-term and long-term solutions,” says Seroka. “This investment positions California’s port system as leaders in efficiency, sustainability and job creation.”

The $1.2 billion in infrastructure funding will help ports increase the rail and road capacity serving the ports, including by expanding rail yards and building new bridges.

One such initiative currently being worked on is the rail project on Long Beach’s Pier B.

That project would reconfigure the approximately 100-acre Pier B Rail Yard in the northern portion of the port area, south of Anaheim Road and Highway 710, providing a hub for trains.

Construction of the $1 billion facility will begin next year and be completed by 2032. The goal is to increase the amount of cargo leaving the Port of Long Beach via onboard rail from 28% to 35%.

Last month, the US Department of Transportation announced that Long Beach would receive a $52.3 million grant to help with Pier B project. This is part of the $241 million nationwide that the Maritime Bureau’s Port Infrastructure Development Program implemented in December.

Los Angeles gets nothing in that round – but it will eventually.

The recently enacted bipartisan infrastructure law will provide $450 million in annual funding for the port program for fiscal years 2022 through 2026, for a total of $2.25 billion.

Meanwhile, Newsom’s spending plan will not stop at infrastructure.

One key aspect that port officials praised Monday is the workforce training center.

In fact, the Port of Long Beach CEO Mario Cordero gave a presentation to the city’s port committee Monday about the new, planned hub for the port property in Wilmington.

Cordero hails the proposed hub as historic because both ports planned and built it together.

“It’s been a great day for the ports,” Cordero said.

This hub is key, as it helps to address one of the biggest sources of tension between ports and long-distance alliances: how the workforce adapts appropriately to automation. increasing.

“If you want to move 40 million TEUs per year, which you wouldn’t do with automation or with the current workforce, we need to up our game,” said Mark Jurisic, of the Local Foundation 13 by International Longshore and Warehouse Union, said Monday. .

The training center that is being planned, he said, “will put us there.”

“There are training centers in Europe, Asia and even in Canada,” Jurisic told the commissioners. “Canada is using this as an economic advantage against us in bidding for jobs, saying its ports are safer, more efficient and more productive.”

Crane operators in Long Beach and LA must use simulators and wait for a crane to run out of service before they can train to use the actual machines.

Right now, “we don’t have a place to train people,” says Jurisic. “It’s an inefficient way of doing it.”

The push for such a hub has been gaining steam in recent discussions about terminal automation that is supposed to threaten some traditional onshore jobs over time.

The center will take three years to build and is designed to attract new workers to the freight industry. It will address skills shortages and provide a way for workers to improve their skills to meet demand in a rapidly changing industry.

“Education and training in the workplace is very important,” said Commissioner Frank Colonna. “It’s been a long journey.”

And then there’s money for zero-emissions vehicles, which has long been a goal of both ports.

The twin ports have for years been public about their role in polluting neighboring communities and have pledged to operate cleaner.

Ports have a Joint Clean Air Action Plan that, among other things, requires fleets of trucks to be completely zero-emissions by 2035.

But such a conversion would cost about $10 billion.

In April, ports will introduce a fee on some trucks to help finance the conversion, although LA and Long Beach levies differ slightly.

Fees and the switch to zero-emission trucks in general have caused tension between ports, trucking companies, drivers – many of whom are independent contractors – and operators. environment, who later argued that officials were not moving fast enough.

Port officials say a major problem is that zero-emission technology is not commercially available to the extent needed.