Infrastructure Investment at the Nation’s Ports Fuels Shift in Supply Chain Operations and Economic Growth

Learn about the latest investments at U.S. Coastal Ports and how they have affected freight movement and economic development around the nation

The more than 300 ports in the United States serve as major drivers of the global economy and places of employment. However, COVID-19 brought about calamity at the ports around the nation. Weaknesses in technology and capacity limitations caused bottlenecks that triggered supply chain disruption issues around the world. These issues led to the need to create a stronger and more resilient supply chain.

In 2021, President Biden signed the Infrastructure Investment and Jobs Act, commonly known as the “Bipartisan Infrastructure Bill,” into effect. The $1.2 trillion fund has enabled continuous investment into the nations hard and soft infrastructure, spurring economic growth and development. Of that $1.2 trillion, The White House committed $17 billion to port and waterway infrastructure.

This investment is designed to:

Finance overdue port infrastructure and waterway maintenance and repairs

Support the American supply chain by reducing congestion

Reduce environmental impacts by cutting emissions near ports, upgrading power grids, and investing in low-carbon science and technology.

Datex Fast Fact

Soft infrastructure represents human capital and institutions necessary to maintain an economy that delivers certain services to the population such as healthcare, financial institutions, government offices, law enforcement, and education.

Datex Fast Fact

Hard infrastructure is the physical system needed to run a modern, industrialized nation. Examples include roads, highways, and bridges, as well as the assets required to make them operational such as transit buses, vehicles, and oil refineries.

Datex Fast Fact

Private sector infrastructure refers to any infrastructure not owned by or dedicated to a governmental or public entity or authority in connection with the project.

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Public infrastructure refers to infrastructure facilities, systems, and structures that are developed, owned, and operated by the government. It includes all infrastructure facilities that are open to the general public for use.

Port Infrastructure Has Caused Shifts to the Supply Chain

Entering 2023, America’s ports saw a significant shift as the nation’s busiest ports changed from Los Angeles and Long Beach to those located at the ports of New Jersey and New York. In fact, ports in Savannah, Georgia; Charleston, South Carolina; The Port of Virginia, and The Port of Houston also saw record or near-record container volume. While port officials at LA and Long Beach work to persuade shippers to bring cargo back to their facilities, experts predict the trend of utilizing East Coast and Gulf ports will continue.

Labor Concerns

Many experts feel that the decline of port usage on the West Coast stems from labor concerns between the Pacific Maritime Association and the International Longshore and Warehouse Union. Those labor negotiations have affected 29 port facilities, 70 companies, and over 22,000 union members.

While freight is shifting from one coast to others, ports are receiving an influx of local, state, federal, and private sector money that could reach more than $25 billion by 2028. The battle for cargo has led to infrastructure developments across the nation’s coastal seaports. These developments are designed to optimize capacity and efficiently handle current and future supply chain demands.

Much of the funding will be provided by the Department of Transportation’s Maritime Administration (MARAD) Port Infrastructure Development Program (PIDP) for public and private infrastructure projects to:

Dredge shipping channels

Purchase cranes

Improve highway and road access for truck drivers

Expand intermodal rail systems

What is the Port Infrastructure Development Program?

In October 2022, the Department of Transportation’s Maritime Administration awarded $703 million in grants to 41 projects across 22 states to improve port facilities. This investment, made to the Port Infrastructure Development Program (PIDP), is designed to increase additional capacity at U.S. ports, improve cargo throughput, and eliminate bottlenecks to reduce the time and cost of shipping goods.

The Port Infrastructure Development Program is a discretionary grant program administered by MARAD. MARAD awards funds for the PIDP on a competitive basis to projects that improve the safety, efficiency, and reliability of the movements of goods through ports and intermodal connections to ports. In addition, projects that address climate change and environmental sustainability, equity, and workforce development are also given priority.

The PIDP offers planning, capital funding, and project management assistance for projects to:

Port authorities

Local governments

Indigenous Tribal nations

Over 60 percent of the funds awarded will be used to benefit ports in historically disadvantaged communities by increasing workforce opportunities. Funds will also be used to reduce emissions at ports through electrification as well as advance offshore wind deployment.

These efforts support the White House’s goal of deploying 30 gigawatts of offshore wind by 2030 that will be able to:

Power 10 million homes with clean energy

Support 77,000 jobs

Increase supply chain investment

According to the American Association of Port Authorities, the funding will continue through fiscal year (FY) 2026 at a rate of $450 million per year. For fiscal year 2023, the Bipartisan Infrastructure Law (BIL) appropriated $450 million to the PIDP. An additional $212,203,512 was made available to the program under the FY 2023 Consolidated Appropriations Act, resulting in a total of $662,203,512 in FY 2023 PIDP grant funding. The application deadline is April 28^th, 2023.

How The PIDP is Affecting the Supply Chain at Coastal Ports

Supply Chain Infrastructure Investments at East Coast Ports

Supply chain experts feel that due to heightened demand at East Coast ports and an increase in sustainability initiatives, the use of rail instead of truck will increase. In efforts to accommodate this increase, ports along the Eastern seaboard are making major investments to create and improve infrastructure.

Port of Virginia

The Port of Virginia recently signed an agreement with the U.S. Army Corps of Engineers. This agreement commits federal investment to widening and deepening efforts for commercial shipping channels. Experts feel that deepening the harbor to 55-feet and widening it for two-way traffic will not only attract more cargo but also increase efficiency at its terminals. Upon completion, the port will be able to handle up to six post-Panamax vessels simultaneously.

Port of Savannah

The recently opened Mason Mega Rail Terminal at the Port of Savannah is the largest port terminal rail yard in North America. Sitting on 85 acres and with 18 working tracks, the terminal will increase intermodal capacity to and from the Port of Savannah by more than 30%. In fact, the rail yard has doubled the port’s container capacity to two million twenty-foot equivalent container units (ECUs) per year.

The Mason Mega Rail Terminal combines on-dock Chessie Seaboard Consolidated rail (CSX) and Norfolk Southern rail terminals into one facility.

This enables the port to serve inland markets such as:

Birmingham, Alabama

Chicago, Illinois

Memphis, Tennessee

Dallas, Texas

New Orleans, Louisiana

Port of Camden

The PIDP has provided a $25 million investment to the Port of Camden’s Access and Infrastructure Resiliency Project. This project will upgrade a structurally defective truck route to improve access to the Port of Camden.

Infrastructure elements include:

Truck turning radius improvements

Pavement reconstruction

New stormwater drainage and green infrastructure

Jacksonville Port Authority (JAXPORT)

The $23.5 million investment for the JAXPORT Express includes five main components:

Installation of electrified refrigerated container stacks

Procurement of six hybrid-electric rubber-tired gantry cranes

Procurement of 16 battery-electric forklifts, ten battery-electric yard tractors, and seven Tier 4 diesel top picks

Installation of 15 high-power direct current fast charging stations and make-ready stub-outs

Development of a replaceable and scalable plan for transitioning the port and local maritime industry to zero-emission technologies.

Supply Chain Infrastructure Investments at West Coast Ports

Due to capacity constraints and softening demand at ports along the western coast of the United States and upgrades to the Panama Canal, large and small West Coast ports have begun investing in infrastructural improvements.

Many of the larger ports are focusing on:

Modernizing terminals

Enhancing rail systems

Reducing emissions

Increasing electric shore power

Port of Los Angeles

A $1.9 billion investment from the Los Angeles Harbor Board of Commissioners is focused on boosting the port’s operational strength and sustainability through terminal, transportation, public access, and security solution projects.

The Clean Truck Program is an environmental sustainability project designed to phase out older trucks that contribute to pollution. Most of the vehicles that will be phased out service the San Pedro Bay port complex.

The Pier 400 corridor storage track expansion project is currently undergoing improvements that will enable it to accommodate future rail volumes on Terminal Island. Construction is expected to be complete in 2024.

The project includes:

An extension to existing rail and road bridges

Five new railroad storage tracks

Modifications to the rail yards compressed air systems

Relocation of a portion of the Pier 400 lead track on property owned by the port

Realignment of the railroad track connection to the rail storage yard configuration

Datex Fast Fact

The Port of Long Beach aims to move 35% of containers by on-dock rail by 2025.

Port of Long Beach

One of the most important projects underway at the Port of Long Beach is the Pier B On-Dock Rail Support Facility Project. The $1.547-billion project will double the capacity of the Pier B rail yard by connecting it to on-dock rail facilities and systems along the Alameda Corridor railway. Upgrades at the Pier B facility will enable trains up to 10,000 feet long to be assembled with greater frequency. This will streamline rail operations as cargo rail volume intensifies, speeding the movement of cargo throughout the San Pedro Bay ports complex.

This is beneficial to supply chain sustainability efforts because moving cargo by on-dock rail results in less environmental impact by easing roadway congestion. Thus, improving air quality. Phase one of the project is expected to be completed in 2025.

Middle Harbor Redevelopment Project at The Port of Long Beach

Another important project at the Port of Long Beach is the nearly $1.5 billion Middle Harbor Redevelopment Project. This project transformed two old terminals at the port into one of the most technologically advanced and environmentally friendly container terminals in the world.

Located on 304-acres, the terminal offers a 4,200-foot-long wharf capable of handling up to three 14,000 twenty-foot equivalent unit (TEUs) vessels simultaneously. Ships of this size are some of the largest in the world. One of the highlights of the new terminal is that ships can enter the wharf, cut their diesel engines, and plug into shoreside electric power.

Middle Harbor Infrastructure Upgrades Include:

14 of the world’s first tandem-lift, dual hoist ship-to-shore cranes

102 electric automated guided vehicles

72 electric automatic stacking cranes

Due to the state of California’s requirement that 80% of all container vessels plug into shoreside electrical power, ocean vessels entering the terminal must use low-sulfur fuel and be able to lower their speeds to 12 knots within 40 miles of porting.

The Port of Oakland

One of the premier projects at the Port of Oakland is the Freight Intelligence System (FITS) program. This program includes 15 freight technology demonstration projects that are intended to address traffic management, security systems, and roadway improvements at the port.

Some examples of FITS demonstration projects include:

An interagency emergency operations and traffic management center

Mobile phone apps connected to Wi-Fi for truckers to access real-time traffic and terminal gate updates

Control towers for vehicle queue detection that can measure truck turnaround times

Another development at the Port of Oakland’s Seaport Logistics Complex is a $52 million warehousing and distribution logistics facility by CenterPoint Properties. The 460,000 square foot warehouse is the largest distribution facility at any U.S. West Coast port.

Ports of Seattle and Tacoma

The Port of Seattle and the Port of Tacoma have formed the Northwest Seaport Alliance (NWSA). This partnership is designed to manage ocean cargo operations to strengthen the Puget Sound gateway. The major project for the NWSA is its $500 million Terminal 5 modernization which will increase international container capacity at the Port of Seattle. The benefits of the Terminal 5 modernization project are extensive and expand across Washington state and into the Midwest. According to port officials, nearly 50% of the cargo imported through NWSA terminals moves to inland destinations. This project will speed the importation process by enabling cargo to be loaded onto the on-dock rail system instead of trucks.

Upon completion, Terminal 5 will have:

185-acres of terminal capacity

On-dock rail capability

Electrical shore power

Eight super-post Panamax cranes

The Terminal 5 project also includes environmental sustainability protections such as a stormwater system and electrical shore power access. Experts predict that upon completion, shore power could reduce carbon emissions at the port by an estimated 3,000 metric tons.

The NWSA also plans to develop the Tacoma Harbor and Seattle Harbor by adding several terminals and a cargo facility. In addition, the NWSA will partner with the U.S. Army Corps of Engineers to deepen and widen both harbors.

Port of Oregon

The Port of Oregon recently received $24 million for the Terminal 6 Infrastructure Improvements Project. This project will:

Strengthen 9 acres of pavement for flexible cargo storage, including container storage

Upgrade pavement throughout 30 acres of container yard

Add a stormwater treatment system to reduce pollutants entering the Columbia River

Replace electrical components to reduce energy consumption and enable future zero-emission operations

Install two emergency generators to provide backup power during seismic events or other power outages.

Supply Chain Infrastructure Investments at The Gulf Ports

With bottlenecks at West Coast ports, improvements to the Panama Canal, and rises in nearshoring efforts in Mexico and Central America, Gulf Ports saw record-setting increases in imports and exports. Subsequently, investments in port infrastructure along the gulf have picked up.

Port of New Orleans

A $1.8 billion project at the Port of New Orleans is set to launch in 2025. This project will build a new multimodal container facility to support the growth of the manufacturing, energy, and food supply chains. The new container terminal will be located on 1,200 acres and be able to serve the largest container vessels traveling into the Gulf of Mexico.

This project will create a Southern logistical center for port operations to expand access to global markets. Highlights of the project include a stormwater drainage system as well as natural buffers between the port and nearby residential communities which will improve public safety.

Port of Beaumont

The PIDP recently allocated over $26 million to the Port of Beaumont for the Barge Infrastructure Project.

This project includes two elements:

The “Lot 6 Project,” which involves the strengthening of a 400-foot section of dock area to support heavy loads with the addition of a 400’ x 100’ pile supported relieving platform and four monopiles for breasting barges

The “Lot 14B Paving Project,” which includes the design and installation of a 26.14-acre container marshalling yard and hard-surfaced laydown area.

Port of Palacios

The Port of Palacios Energy & Resilience Improvement Project is a $9.6 million project funded by the PIDP. The project includes the repair or replacement of nearly 5,600 feet of bulkhead and the installation of electrical shore power for up to 20 ocean vessels. These improvements will help make terminal facilities at the port more resilient to the effects of natural disasters and sea level rise. In addition, the project will also improve movement of goods through inland waterways connected to the port.

Port of Corpus Christi

The Port of Corpus Christi has recently received $153.7 million in investment funding from the Consolidated Appropriations Act of 2023. This funding will be used for the last part of the Channel Improvement Project (CIP), making the Corpus Christi Ship Channel (CCSP) the most improved channel along the entire U.S. Gulf Coast. The Port of Corpus Christi is currently the nation’s largest U.S. energy export gateway and third largest seaport in total waterway tonnage.

The upgrades from the CIP will help increase the port’s ability to move greater volumes of containers more safely and efficiently. The CIP will increase the depth of the CCSP from 47 feet to 54 feet as well as widen it to 530 feet. An additional 400 feet of barge shelves will also be constructed, enabling simultaneous two-way traffic for ocean vessels and barges.

Conclusion

The effects of COVID-19 showed that America’s infrastructure was severely lacking. This lack of supply chain infrastructure has deterred economic growth. However, money from the White House and other public-private partnerships have enabled businesses to invest in infrastructure. Thus, civil engineering projects around the nation have increased. These public sector and private sector infrastructure projects will contribute to science and technology at the ports to improve economic development on a global scale.