Biden team harnesses infrastructure deal for quick supply chain relief

Date: Wednesday, November 10, 2021
Source: Freightwaves

Following Congress’ passage of a $1.2 trillion infrastructure deal, the White House on Tuesday announced steps to accelerate investment in ports, waterways and freight networks to help ease supply chain bottlenecks that are contributing to inflation and slower economic growth.

The action plan sets a series of short-and medium-term timelines designed to mobilize agencies and lay the foundation for implementing the Infrastructure Investment and Jobs Act, which President Biden has yet to sign. The deal increases funding for existing infrastructure programs and establishes new ones.

The infrastructure package includes $17 billion for ports and related infrastructure.

The White House said it has instructed the Department of Transportation to immediately allow flexibility in how port grants are used.

The department will issue a temporary exception to its policy under the Port Infrastructure Development Program allowing port authorities to redirect project cost savings toward tackling trucking, rail and terminal inefficiencies that are preventing swift evacuation of containers from ports. If a project already selected for a grant award comes in under budget, grant recipients may now propose to reduce their non-federal share of the investment if they use those cost savings for activities that will alleviate the current port congestion and supply chain disruption, a DOT spokesperson explained.

The policy change will permit the Georgia Ports Authority to reallocate more than $8 million to set up pop-up container yards at inland locations in Georgia and North Carolina. The move will free up land to increase fluidity at the Port of Savannah, which is also a major export gateway for agriculture products. Under the plan, containers will be quickly transferred by truck and rail to the depots, where they will be sorted and made available to shippers for pickup.

“Every part of the freight and logistics sector is reassessing its operations due to the current crisis. This reassigned funding will allow us to open new intermodal outlets to help alleviate supply chain congestion and improve the flow of goods for our customers at the Port of Savannah,” said Grif Lynch, executive director of the Georgia Ports Authority, in a statement.

A senior White House official briefing reporters about the action plan said the overflow container yards in the Southeast could be operational before the end of the year, according to CNN.

The DOT will release more than $230 million in funding from the Port Infrastructure Development Grant program, as well as $13 million for the Maritime Administration’s Marine Highway Program designed to get truck moves shifted to barge or coastal vessels, within 45 days.  

The U.S. Army Corps of Engineers within 60 days will identify projects at coastal ports and inland waterways that will provide a road map for more than $4 billion in funding to repair outdated infrastructure and deepen harbors for larger cargo vessels.

Within 90 days, agencies will prioritize key land ports of entry for $3 billion to $4 billion in modernization and expansion work to help speed international trade with Canada and Mexico.

The first round of port infrastructure grants funded through the bipartisan infrastructure deal will be opened for competition within 90 days. The DOT will announce more than $475 million in additional funding for port and marine highway infrastructure.

President Biden is scheduled to visit the Port of Baltimore on Wednesday to promote the benefits of the infrastructure deal.

Officials say smart deployment of investments funded by the infrastructure deal can improve supply chain efficiency and resiliency over the long term. The package includes $110 billion to repair roads and bridges, but traditionally states have focused on projects that help commuters and passenger travel.

The White House said the DOT will help states and other grantees direct federal resources to transportation supply chain needs by:

  • Developing a comprehensive freight movement playbook to guide states on how to use grant and loan programs to support goods movement and alleviate freight bottlenecks. Under the deal, states will receive more than $50 billion per year in federal-aid highway funding, much of which can be used to repair and modernize existing infrastructure to improve the performance of freight corridors.
  • Issuing revised guidance on state freight plans that incorporates best worldwide freight planning practices. The legislation strengthens the freight plans that states are currently required to produce to include supply chain cargo flows, an inventory of commercial ports, the impacts of e-commerce on freight infrastructure and an assessment of truck parking facilities. Improved plans will help states direct resources to their greatest economic development needs, according to the action plan.

The White House also emphasized the importance of data sharing to support supply chains, noting that the freight transportation system is a series of interconnected pieces that don’t always share data with each other in ways that could reduce delays.

The DOT will work with the Federal Maritime Commission to publish a request for information on standardized data exchange requirements for goods movement, with the aim of achieving interoperability, greater transparency, resiliency, competition and efficiency across the supply chain, it said.

 

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