In his speech on Wednesday announcing commitments made by the Port of Los Angeles and its major retailer customers to expand to 24/7 operations, President Biden emphasized that in order for the changes to work, terminal operators, railroads, trucking companies, container lines and other retailers had to coordinate.
And if players in the supply chain are unable or unwilling to cooperate, “we’re going to call them out and ask them to act,” Biden said, “because our goal is not only to get through this immediate bottleneck, but to address the long-standing weaknesses in our transportation supply chain that this pandemic has exposed. If federal support is needed, I will direct all appropriate action.”
But beyond merely coordinating among the various modes and their customers, what can Biden and the federal government do?
One solution — according to a handful of ports pushing for it — is to tap into a provision within the National Defense Authorization Act called the Maritime Transportation System Emergency Relief Program (MTSERA). The program authorizes the U.S. Maritime Administration to award grants due to emergencies, including the current pandemic. In addition to ports, those eligible for receiving money from the fund include vessel owners and terminal operators. Eligible costs for relief include workforce retention and infrastructure repair.
The American Association of Port Authorities had sought $3.5 billion worth of funding through the program earlier this year for COVID relief. But container ports on both coasts — including the ports of Oakland, Seattle-Tacoma, New York and New Jersey, and Norfolk, Virginia — are now urging the Biden administration to ask Congress for emergency funds through MTSERA to help port authorities fund operations and establish incentives aimed at unclogging the supply chain, according to a letter obtained by FreightWaves.
Some of those include incenting cargo owners, trucking companies and railroads to make use of the extended hours; developing off-site container storage; and encouraging ocean carriers to load and discharge cargo at the contractually agreed-upon ports to avoid vessel bunching in other regions.
Money from MTSERA could also be used to supplement the costs of data-sharing platforms used by the ports and their customers that provide better visibility and predictability of container location and delivery.
Lawmakers, concerned that supply chain backups are already threatening holiday deliveries and boosting consumer prices, are urging government action as well. Speaking on Tuesday at the Port of New York and New Jersey alongside Federal Maritime Commissioner Daniel Maffei, U.S. Reps. Josh Gottheimer, D-N.J. and Daniel Payne, D-N.J., complained about supply chain disruptions causing container rates to skyrocket from $2,000 to $22,000 over the past year.
“Supply and demand are real, but the idea that a container should cost 10 times what it did before COVID is absurd,” Gottheimer said. “We need to fix this shipping crisis now — before the holidays because the last thing we need is a giant piece of coal in America’s Christmas stocking.”
Gottheimer called on Congress and the administration to take several actions, including:
- Congressional Oversight: The House Committees on Transportation and Infrastructure, Ways and Means, and Homeland Security should hold hearings to investigate the continued spike in global shipping prices and potential collusion in the marketplace.
- FMC Action: The Federal Maritime Commission and all relevant authorities must redouble their oversight efforts to investigate the practices of major ocean carriers and assess if there is any collusion or anti-competitive practices.
- U.S. Department of Homeland Security (DHS) Revamp: DHS must modernize how it tracks and clears ship traffic and to get goods moving. Currently, outdated processes are helping contribute to the backlog.
- Ocean Shipping Reform Legislation: Gottheimer is cosponsoring key bipartisan legislation, the Ocean Shipping Reform Act of 2021, to take major steps to mitigate supply chain issues and help ensure that businesses and consumers aren’t facing untenable delays and price increases.
Longer term, the bipartisan infrastructure bill awaiting passage in Congress — which had meager bipartisan support — is also a way to help the country support a 24/7 supply chain, Biden asserted in his speech this week. But Democrats in Congress who complain the bill pays too little attention to funding roads and bridges rejected the idea.
“On infrastructure specifically, the president and the majority are using [supply chain disruption] to advance their socialist agendas instead of concentrating on addressing congestion and freight bottlenecks,” said House Transportation and Infrastructure Committee Ranking Member Sam Graves, R-Mo., following Biden’s speech.
“Americans are paying a heavy price for these failures, including skyrocketing inflation and the growing scarcity of goods on the shelves that will get worse with Christmas fast approaching.”
