California and the U.S. Department of Transportation announced Thursday a multi-billion-dollar loan agreement for California to use on supply chain infrastructure improvements, including through upgrades at the ports of Los Angeles and Long Beach.

“California’s ports and infrastructure system is key to the country’s supply chain. Thanks to our collaboration with the Biden-Harris Administration, this innovative federal-state partnership will help us fast-track those projects that will make our ports and infrastructure even more efficient,” said Gov. Gavin Newsom. “This partnership will help us jumpstart and support multiple infrastructure projects to improve our supply chain, making sure goods get to where they need to go faster, cheaper and in a more environmentally friendly manner.”

The “Emerging Projects Agreement” will allocate the federal government’s infrastructure program’s two main loan programs — Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) — “on a blanket basis to the state of California to develop a comprehensive program of projects” that will benefit both the state and the U.S. through supply chain improvements, according to the Biden Administration’s Port Envoy John D. Porcari.

Along with projects to improve the supply chain at California’s ports, chosen projects could:

— expand capacity for freight rail;

— develop inland port facilities for increased warehouse storage;

— electrify trains and trucks;

— upgrade highways to improve truck travel times;

— reduce the number of rail-street intersections and improve safety and efficiency through grade-separated crossings; and

— expand trade capacity and cross-border commerce through land ports of entry.

“The state is now working hand-in-hand with regional stakeholders to identify major projects that fit that profile and are in a position to begin construction in the next few years … but one thing I want to stress is that today’s announcement is not about any specific project, it’s about an innovative federal-state partnership that gives California that flexibility and support to build a comprehensive state program to address supply chain challenges,” said California State Transportation Agency Secretary David Kim.

Kim added that “all of these projects will be considered through an equity and environmental justice lens at … the federal, state and local level.”

Projects will be funded quicker, officials said, because they’ll be able to move through the approval process as a group, instead of one by one. The Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) loans are 35-year loans and can cover up to 50% of a project at a low interest rate.

“Our supply chains are being put to the test, with unprecedented consumer demand and pandemic-driven disruptions combining with the results of decadeslong underinvestment in our infrastructure. That’s why this administration is working around the clock to address both near-term and long-term challenges to our supply chains, including investments such as those in the bipartisan infrastructure deal,” said U.S. Transportation Secretary Pete Buttigieg.

“Today’s announcement marks an innovative partnership with California that will help modernize our infrastructure, confront climate change, speed the movement of goods and grow our economy.”

The announcement comes as the ports of Los Angeles and Long Beach — which are responsible for about 40% of all imports into the U.S. — are experiencing record cargo volume creating a backlog, with 71 ships at anchor in the bay on Wednesday waiting to enter the port complex. The average wait time is about 13 days. The announcement will not affect the current backlog, but officials hope it will make the infrastructure system more equipped for the future.

“Having our federal and state transportation agencies working in unison to help fund infrastructure is exactly what we need,” said Port of Los Angeles Executive Director Gene Seroka. “We have projects in need of funding that will reduce cargo delays, improve efficiency, reduce emissions and improve safety for waterfront workers and motorists throughout the region.”

Leave a comment

Your email address will not be published.