Calif. Gov. Proposes $2.3 Billion in Goods Movement, Supply Chain Bottleneck Reductions in New State Budget

Gov. Gavin Newsom, State of California, Public domain, via Wikimedia Commons.

California Gov. Gavin Newsom on Jan. 10 proposed allocating $2.3 billion for supply chain investments in the new state budget, with the funds earmarked to help address congestion and bottlenecks.

At the start of the COVID-19 pandemic, California ports saw significant decreases in trade with record breaking impacts. But demand rose as consumers grappled with adapting to a new world that revolved around remote work and virtual learning. The surge in cargo has created unprecedented challenges across the state’s coast.

Over the past decade, the federal government has invested roughly $11 billion in the eastern Gulf coast ports, but only $1 billion in the West Coast ports, according to the California Association of Port Authorities.

Consequently, California ports struggled to keep up with rising demand. The proposed investments in the supply for the 2022-23 fiscal year include:

  • Port Infrastructure and Goods Movement—$1.2 billion for port-related high-priority projects that increase goods movement capacity on rail and roadways serving ports and at port terminals, including railyard expansions, new bridges, and zero-emission modernization projects.
  • Zero-Emission Equipment and Infrastructure—$875 million for zero-emission port equipment, short-haul trucks and infrastructure.
  • Workforce Training—$110 million for a training campus, to support workforce resilience in the face of supply chain disruptions and accelerate the deployment of zero emission equipment and technologies.
  • Commercial Driver’s Licenses—$40 million to enhance California’s capacity to issue commercial driver’s licenses.
  • Operational and Process Improvements—$30 million for the governor’s Office of Business and Economic Development to provide funding for operational and process improvements at the ports. This could include enhancing the movement of goods and improving data interconnectivity between the ports to enable efficient cargo movement, reduce congestion, and create opportunities to increase cargo volume by promoting and building supply chain efficiency.
  • In a statement, California Association of Port Authorities President and Port of Oakland Executive Director Danny Wan thanked Newsom for his commitment to investing in California ports and addressing the global supply chain crisis.

“I applaud Governor Newsom for his leadership and continued support of California ports,” he said. “Our state’s ports can play a critical role in fixing America’s broken supply chain. We must take a holistic approach that incorporates a reinvestment in infrastructure, technology and data-driven methods that will help get goods moving. This budget proposal reflects a historic commitment to California’s ports.”

The 11 ports that comprise the California Association of Port Authorities handle 40% of all containerized imports and 30% of all exports in the U.S., reaching every corner of the country.