California to get billions in federal loans to modernize Los Angeles area ports amid supply chain crisis

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Top line

In a partnership announced Thursday, the U.S. Department of Transportation will help align billions of dollars in loans to modernize the infrastructure of Los Angeles and Long Beach seaports, which currently face backups of dozens of ships waiting to unload cargo, although the money will not solve the current congestion.

Highlights

The announcement refers to the loans as a “longer-term solution” that will work in tandem with short term loans solutions that have been put in place, such as the decree signed by Newsom last week.

Newsom said in the statement that the funding “will help us start and support several infrastructure projects to improve our supply chain, ensuring goods get where they need to go faster, cheaper and more. respectful of the environment “.

The money is believed to come from existing U.S. Department of Transportation credit funding programs, as well as state and public-private funding, according to the Los Angeles Times.

What we don’t know

It’s unclear exactly how the $ 5 billion will be used, as John D. Porcari, former U.S. Assistant Secretary of Transportation and current port envoy for the Biden-Harris administration’s supply chain task force, said Thursday at a press conference that the program would be similar. to a “hunting license”, according to the Los Angeles Times. The USDOT statement cites, among others, “port specific upgrades”, “expansion of rail freight capacity” and “development of inland port facilities for increased warehouse storage”, as projects that “could receive support under this agreement”.

Key context

The executive order signed by Newsom last week ordered state agencies to “continue to coordinate with the Biden-Harris Administration’s Supply Chain Disruption Task Force to address chain challenges. ‘state, national and global supply’ and identify locations that could serve as short-term storage for the for the goods once they are unloaded. About 40% of container traffic entering the United States passes through the two ports, according to CNN.

Large number

This is the record number of ships waiting to enter the ports of Los Angeles and Long Beach as of Oct. 19, according to ABC7.

What to watch out for

Beginning Nov. 1, shipping lines whose freight containers stay more than nine days in one of the ports will be charged “$ 100 per container, increasing in increments of $ 100 per container per day,” according to a statement from the. Long Beach harbor.

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