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West Coast port crisis caught in infrastructure debate

Rail investment, round-the-clock operations critical to keeping up with demand, Long Beach port director tells Congress

Import demand continues to surge on West Coast. (Photo: Port of Los Angeles)

Trans-Pacific container rates from Asia to the U.S. that have doubled from a year ago to approximately $5,000 per box demonstrate an urgent need to pass President Joe Biden’s infrastructure package, according to a top West Coast port official.

Testifying on Thursday before a subcommittee of the House Ways & Means Committee — which is responsible for figuring out how to pay for the massive $2.3 trillion proposal — Port of Long Beach Executive Director Mario Cordero told lawmakers that a lack of containers, intermodal chassis and on-dock rail capacity has hit an inflection point.

“These containers, which we don’t have enough of, are not being held here for American exporters,” Cordero said. “The international [container ship] carriers are rushing to have those containers sent back to Asia to bring back more imports.”

The surge in costs coupled with the lack of equipment for packing exports back to Asia has so far cost U.S. exporters nearly $1.5 billion, according to a letter sent this week by nearly 300 agribusiness and forest product shippers demanding action from the Biden administration.

Republicans on the committee used the opportunity to voice opposition to the scope of Biden’s infrastructure package, and the administration’s plan to increase taxes to raise enough revenue to pay for it.

“It’s really a Trojan horse for a lot of socialist policies because only 5% of it’s going for roads and bridges,” said Rep. Ron Estes, R-Kansas. “Instead of focusing on building infrastructure needed to facilitate international trade, this plan focuses on a liberal wish list including electric vehicles, tax increases on all Americans and bailouts to unions.”

Rep. Jodey Arrington, R-Texas, attempted to lure Port Tampa Bay President and CEO Paul Anderson into the fight over how to pay for Biden’s proposal, asking Anderson if including Medicaid expansion and using a tax hike is a concern versus prioritizing traditional infrastructure.

“How this bill is passed we’ll leave to the members of the committee and Congress,” Anderson said. “We’re going to try to give you guidance on what our industry needs to be competitive with the world, and every dollar that gets appropriated to the ports we’re going to invest.”

Anderson emphasized in his written testimony public-private partnerships as a way of expanding capacity, including a dredging project that will allow bigger ships to access his port.

Cordero said the Port of Long Beach and other gateway ports will need to match the ability of consumers to buy online 24/7 — one of the factors causing the current buildup of containerships anchored outside Long Beach and Los Angeles waiting to unload — by moving to round-the-clock operations to move cargo quicker through the port complex.

“With Southern California highways already congested, implementing policies that enable greater access for trucks outside of the normal workday will reduce emissions from idling and enable truck drivers to get to their destination quicker,” Cordero said.

“Investments in rail, sustainable goods movement, energy resiliency, digital infrastructure and demonstration projects that advance a 24/7 operations model in goods movement are critical to meeting the current needs of the supply chain and expanding U.S. exports in the global market.”

Click for more FreightWaves articles by John Gallagher.

John Gallagher

Based in Washington, D.C., John specializes in regulation and legislation affecting all sectors of freight transportation. He has covered rail, trucking and maritime issues since 1993 for a variety of publications based in the U.S. and the U.K. John began business reporting in 1993 at Broadcasting & Cable Magazine. He graduated from Florida State University majoring in English and business.