The supply chain meltdown is on the radar of federal and state officials as well as the American public in general.
We need to be careful of the consequences resulting from government “fixing” our issues, but we can use this new-found attention to make changes that were previously unattainable, including much needed investment in our supply chain infrastructure.
Here are some of the goings-on, in no particular order, both good and bad:
- Infrastructure funds are headed to California and port areas. $29.5B in the next five years, which equates to a 44.1% increase over current funding. Plus $555M for transportation-related emission reductions and $631M to improve the “resiliency” of the state’s transportation system.
- $17B of the infrastructure funds will also go towards port and waterway projects to address repair/maintenance, congestion, emissions and electrification.
- $5B loan/bailout for the Port of Los Angeles. According to US Transportation Secretary Pete Buttigieg, this money “will help modernize our infrastructure, confront climate change, speed the moment of goods, and grow our economy.”
- The US Navy is opening up one berth and 21 acres of yard space at their Seabee base in Port Hueneme to offload containerized vessels. The downside…this facility is about 100 miles north of LA/LB and lacks chassis.
- The UP Railroad is working with the ports of Los Angeles, Long Beach, and Oakland and the Northwest Seaport Alliance to move containers bound for Utah, Idaho, Nevada and Colorado by rail rather than by truck. In an effort to provide a “relief valve,” the UPRR will increase the length and frequency of trains bound for Salt Lake City and its Utah Inland Port Authority.
- The terminals in LA/LB via PierPass have resorted to the stick approach to move more cargo on night gates. From December 1st – January 31st, PierPass will resume the day-side Traffic Mitigation Fee differential. Rather than a $68.42/40′ fee regardless of the time of day, it will be $156.46/40′ if moved weekdays on the day-side. They are calling it a “financial incentive.” Seems more like a financial hammer to us, especially when night-side operations are notoriously even less productive.
- The State of California and the US Department of Transportation entered into a partnership entitled “Emerging Projects Agreement” with the goal of finding “innovative financing opportunities” to expedite port infrastructure projects.
- The ports of LA/LB have again delayed the implementation of their container dwell fee for truck-dispatched containers sitting on dock more than nine days. The fee, originally set to be implemented on November 1st, has been delayed to December 6th. The dwell fee starts at $100 per container and increases by $100 each day the container remains on dock. Sounds like more sticks.
- Ships queueing for berthing spots in LA/LB will now have to anchor 150 miles west off the coast rather than in the San Pedro Bay. Hmmm…is it to improve safety and reduce emissions as they claim, or is it to hide the ships from news drones, legislators and other prying eyes?
- California’s Governor temporarily increased the maximum gross vehicle weight limit from 80,000lbs to 88,000lbs on the interstate and state highway systems. Motor carriers will have to obtain a permit from the state as well as any county and municipalities traveled. It is unclear, however, if additional axles will be required to legal the extra 8,000lbs as initial reports indicate the axle weights will not be increased, thereby, effectively limiting the total weight to 80,000lbs.
Effective April 1, 2022, the ports of LA/LB will begin collecting a $10/TEU Clean Truck Fund Rate (CTF). Containers carried by zero-emission trucks or moved via on-dock rail will be exempt from this fee. The Clean Truck Fee is expected to generate $90M and will be used as incentives to transition to zero-emission trucks.