Port infrastructure, goods movement training, clean trucks and other supply chain-related spending are set to see capital injections with California Gov. Gavin Newsom signing off on the state’s budget.
The approved spending is a boon for the state’s supply chain infrastructure, amounting to some $2.3 billion in programs earmarked for the ports or related initiatives.
“Continual investment in port infrastructure, sustainable technologies and jobs creation is essential to maintaining our competitiveness now and in the future,” Port of Los Angeles executive director Gene Seroka said of the new budget.
The supply chain spending is part of an overall $14.8 billion allocated for transportation infrastructure in the state.
“These investments in a vital economic engine will enhance the efficiency and sustainability of cargo movement and help fund important port projects, such as the Pier B On-Dock Rail Support Facility and the Supply Chain Information Highway,” Port of Long Beach executive director Mario Cordero said, referencing a major rail improvement project and data-sharing program at his facility.
The $308 billion 2022-2023 California budget also sets aside $9.5 billion in one-time payments the state’s calling a tax refund for the middle class, $2.2 billion in homeless shelters and housing and $200 million in reproductive healthcare services and education.
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The budget was outlined in January and revised in May before it hit Newsom’s desk for signature.
The breakdown of the supply chain spending allocation includes $1.2 billion on goods movement-related projects, $760 million for zero-emission equipment and infrastructure, $30 million in grants largely focused on supply chain efficiencies through data sharing and other programs, $40 million to help speed up issuance of commercial driver’s licenses and $110 million for a Goods Movement Training Campus at the San Pedro Bay port complex, which is comprised of the ports of Los Angeles and Long Beach.
The approved budget spend comes as supply chain challenges persist for shippers and carriers alike.
Long Beach and Los Angeles port officials said last week aging on-dock cargo at the two facilities combined has fallen 27 percent since a container dwell fee program was announced Oct. 25 as part of the White House’s Supply Chain Disruptions Task Force. Both ports have pushed back consideration of implementation since that time, with the most recent hold placed until Friday.
The plan, if implemented, would charge carriers $100 for every container that remains sitting at a terminal after nine days, with the fee increasing $100 each day thereafter. The fees would then be funneled to initiatives aimed at relieving cargo congestion.
The supply chain budget funding comes as the Pacific Maritime Association (PMA) and International Longshore and Warehouse Union (ILWU) continue negotiations on a new labor contract. The current deal expired July 1 at 5 p.m.
The contract impacts more than 22,000 dockworkers working at 29 ports along the West Coast.
The two groups had already warned shippers and others talks would likely run past the expiration deadline and that both parties were dedicated to the continue flow of cargo.
“While there will be no contract extension, cargo will keep moving and normal operations will continue at the ports until an agreement can be reached between the Pacific Maritime Association and the International Longshore & Warehouse Union,” the two said in a joint statement released Friday. “Both sides understand the strategic importance of the ports to the local, regional and U.S. economies and are mindful of the need to finalize a new coast-wide contract as soon as possible to ensure continuing confidence in the West Coast.”