A House committee is considering for the first time how grants for ports will be appropriated to combat the pandemic, ranging from debt-service payments to personal protective equipment.
During a hearing of a subcommittee of the House Transportation and Infrastructure Committee, Mario Cordero, chair of the board of directors for the American Association of Port Authorities, voiced the need for funding for ports. Ports have not yet received funding under relief packages passed last year.
“A vital part of the transportation sector here has yet to receive any funding with regard to this emergency crisis that we have experienced,” Cordero said. Cordero is also the executive director for the Port of Long Beach.
Ports will soon start receiving grants authorized through the Maritime Transportation System Emergency Relief Program, which was passed late last year through the National Defense Authorization Act. It allows the U.S. Department of Transportation’s Maritime Administration to provide emergency grants to U.S. ports for the first time.
AAPA wants Congress to provide $3.5 billion through those MTSERP grants. The Maritime Administration has not yet created guidelines for how the grants could be used.
A port authority or a vessel owned or operated by a state or tribal government and facilities associated with operating that vessel would be eligible for the grants. Eligible operating costs include cleaning, sanitization, workforce retention, and debt service payments, which will all need to be finalized by the Maritime Administration.
AAPA has repeatedly said that some ports fared well in 2020, but bulk cargo or cruise ship ports have not. The Center for Disease Control’s no sail order for cruises is still in effect and the CDC has continuously extended it over the past year.
In December Moody's Investors Service gave U.S. public ports a stable rating, up from negative, with cargo volumes expected to grow by 5% over the next year.
If Congress does not give enough funds to ports, trade could be impaired, Cordero said. About 95% of international trade moves by water, he added.
“Trade begins at the ports,” Cordero said.
AAPA has said that though trade has surged at some of the country’s largest container ports, most ports are still suffering financially, especially those that handle non-container goods like steel, grain and others.
The pandemic caused 2020 to be one of the most erratic and volatile years in terms of container volumes, Cordero said in his testimony to the House committee.
“Early in the year, China’s efforts to stem the pandemic led to the shuttering of factories which led to canceled sailings,” Cordero said. “Coupled with a drop in consumer spending here in the United States as shutdowns were implemented to stop the spread of the COVID-19 virus, we experienced significant drops in volumes across the industry throughout the first half of 2020.”
House T&I Committee Chair Peter DeFazio, D-Ore., said it was “unfortunate” that the maritime industry had not been included in COVID relief packages over the past year.
“We’re here today to hopefully begin to make the case to our fellow colleagues on the appropriations committee that this is something that should be funded,” DeFazio said.
Also on Tuesday, DeFazio released details of his committee’s budget reconciliation text to fill out President Joe Biden’s $1.9 trillion relief package plan. About $100 billion of that is within House T&I’s jurisdiction. The committee proposed $30 billion for transit to help with operating costs, payroll and PPE and $8 billion for airports. The Federal Emergency Management Agency’s Disaster Relief Fund would also get $50 billion to help with vaccination efforts and disinfecting public facilities like schools.
