California Begins $1.2B Upgrade of LA, Long Beach Ports

California has initiated a $1.2B, one-time spending program to upgrade the goods movement infrastructure at the perpetually snarled ports of Loa Angeles and Long Beach.

The California State Transportation Agency (CalSTA) last Wednesday issued guidelines and a call for projects that would help “build a more efficient, sustainable and resilient goods movement system” at the two ports.

The funding, part of the state’s recently-created Port and Freight Infrastructure program, was finalized in the California state budget in June.

Project applications are due Jan. 13, 2023, and with funding awards to be announced in March 2023. CalSTA will award the entire $1.2 billion in a single cycle through a single program of projects, with $600 million available for projects in 2022-23 and $600 million in 2023-24, consistent with funding availability.

Seventy percent of the funding will go to projects that support the movement of goods through the ports of Los Angeles and Long Beach, CalSTA said in a release. The remainder will fund ports and goods movement infrastructure throughout the rest of the state.

California is the nation’s busiest gateway for global goods movement. The Ports of Los Angeles and Long Beach move approximately 35% of all containers in the US and about 40% of US imports and 25% of US exports pass through the San Pedro Bay.

“After decades of neglect, we are finally making the critical investments needed to modernize our ports—helping us to keep up with demand in a way that is environmentally sustainable and brings our distribution process into the 21st Century,” Gov. Gavin Newsom said, in a statement.

In January, Newson proposed $2.3B supply chain resilience package for California, including the one-time funding of $1.2 billion in ports upgrades.

A report from the state’s Legislative Analyst’s Office (LAO) said projects eligible for funding include intermodal railyard expansions and electrification, goods movement railway corridor capacity projects, high-priority grade separations and zero‑emission goods movement demonstration projects.

However, the LAO report noted that these improvements will not immediately unclog the ports of Los Angeles and Long Beach.

“It is important to recognize that such infrastructure projects will not address the more immediate issues with the current supply chain disruptions, such as delays in goods movement, stalled ships near ports, and insufficient space for containers at ports,” LAO said in its report.