Will all of that money earmarked by the Biden Administration for U.S. port development actually materialize, and end up being used for its intended purpose? 

In November of 2002, the U.S. Maritime Administration announced an investment of more than $653 million to fund 41 port projects under MarAd’s Port Infrastructure Development Program (PIDP). According to the agency, the program “provides planning support, capital funding, and project management assistance to improve capacity and efficiency of ports in both urban and rural areas.”

The need for infrastructure improvements at the nation’s ports became painfully evident during the height of the COVID-19 pandemic, with more than 100 containerships stuck outside the ports of Los Angeles and Long Beach, waiting to unload. At least 50 more vessels were delayed at other ports across the U.S., the result of a surge of consumer demand for imported goods.

The congestion has since abated, except for some temporary backups at West Coast ports last summer during the final stages of labor negotiations between dockworkers and terminal operators. The conclusion of a new longshore labor contract, along with a steep drop in consumer goods purchases, have mostly restored vessel turnaround times to what passes for “normal” at U.S. ports.

The need for major improvements at the nation’s ports, however, hasn’t diminished. The cost of shipping continues to rise, thanks in part to intermodal equipment shortages and antiquated information systems at port terminals. “There’s a symphony of issues going on,” says Chris Connor, former chief executive officer of the American Association of Port Authorities, and now a member of the advisory board of supply chain software vendor e2open.

“Going into the pandemic, we had a rather under-invested port system,” Connor says, “certainly at the federal level.” That began to change in November of 2021, with passage of the Bipartisan Infrastructure Law (BIL), which authorized $550 billion in federal investment for transportation projects between fiscal years 2023 and 2026.

There’s customarily a time gap between such announcements and the actual disbursement of funds.

The first awards under the BIL were issued late in 2022, and as of December, 2023, “the first dollar [hadn’t] touched a shovel yet,” Connor says. Of the $653 million set aside for port development, $450 million comes from the BIL, with the balance to be made up through annual appropriations. Overall, Connor adds, MarAd’s PIDP plans to authorize $2.25 billion in discretionary grants for port infrastructure projects.

The money reflects a realization that the problem of ports delays is more than a matter of enduring brief periods of congestion. “It was and remains desperately needed to modernize U.S. ports and keep us competitive,” Connor says. The boost in federal investment addresses long-term structural inadequacies throughout the system.

It's not nearly enough, though, to cover all of the costs. The total amount of investment needed for improving port infrastructure “still far exceeds what the U.S. government is able to afford,” Connor says. To make up the difference, a substantial amount of private investment will be required. There’s also the question of how long it takes for federal money to materialize, as beneficiaries jump through all of the necessary bureaucratic hoops. In the meantime, inflation can eat away at the value of the federal share, requiring more local and private funds. (Grantees under PIDP have to kick in 20% of the cost, usually through operations, bonds or local taxes.)

What goes on at the waterfront, of course, is just one piece of the larger transportation picture. Along with improvements in berths and marine terminals comes the need for substantial investment in inland cargo-handling facilities, including off-dock railyards. Intermodal operations located far from the ports, yet essential for feeding and receiving ocean containers, must also be funded. A new intermodal terminal in Phoenix, for example, recently announced by the Union Pacific Railroad, is not eligible for the port money. 

Ports can only hope that they’ll see all of the funds promised by Congress and the Biden Administration. The initial $450 million under the BIL has been allocated, Connor says, but the ongoing congressional appropriations needed to fill out the program “are the only unsure part.” 

AAPA and the port industry need to send a message to the government that “you can’t look at this thing in a one-year vacuum,” Connor says. “You have to look over the long term, and see what the needs are for our port system to remain competitive globally.”