(Bloomberg) — Bottlenecks and failures abound in the U.S. supply chain. Then there’s the Port of Baltimore.
A gateway to the Midwest and the top entry point for U.S. auto imports, the city’s port is in the midst of a renaissance, including new cranes, improved piers and freshly dredged channels that accommodate large ships. Far from the backlogs of Asia and experiencing modest volume, it’s running smoothly as larger American ports sag under a crush of demand.
President Joe Biden will use the Baltimore port as a backdrop Wednesday in his campaign to promote the $550 billion infrastructure legislation Congress cleared last week, $17 billion of which would go to ports. Baltimore’s upgrades and investments, he will argue, are the kinds of projects the measure will finance across the country to speed up the flow of goods to and from the U.S. and rejuvenate the fortunes of the terminals that move them.
The White House said the president will highlight the country’s strong economic growth since he took office, including 5.6 million new jobs.
He’ll also seize the opportunity to tout a bipartisan accomplishment in a Democratic-leaning state led by a Republican governor, Larry Hogan.
“I think the infrastructure thing is great. It’s going to be great, not just for the Port of Baltimore but for a lot of ports in this country,” said Richard Krueger, president of the International Longshoremen’s Association Local 953, one of the unions at the port. “We think it might be a little bit overdue, but we’re glad it’s here.”
Biden’s team is preparing a cross-country push to promote the infrastructure plan even as Democrats continue to haggle over their second flagship bill, a package of social programs and tax policy called Build Back Better. The public works measure wouldn’t have cleared the House last week but for Republican votes, after several progressive Democrats voted against it because the Build Back Better debate hasn’t been resolved.
Commerce Secretary Gina Raimondo said Wednesday the administration is doing what it can to help ease supply crunches hitting American consumers but acknowledged the issues will take more time to smooth out.“There is no quick fix. If there were a light switch that we could flick, we would do that,” she said on CNN. “We all have to be just a little bit patient because we are seeing that the action we are taking is working but we just have to stick with it long enough to solve the problem.”“We are on it, acting urgently, and we know it’s a tough time for American consumers.”
Baltimore’s port, founded in 1706, has been through eras of transformation before. It’s the closest major seaport by land to much of the Midwest, meaning it was a crucial conduit before railway deregulation steadily ate away at its traffic.
Its latest evolution has been spurred by the expansion of the Panama Canal, which allows larger ships from Asia to more easily reach the East Coast. Dredging at Baltimore’s port allows it to load and unload super-sized ships; a second berth at one of its terminals will be dredged to a depth of 50 feet next year.
‘Hopeful Backdrop’
The port is the 10th-largest in the U.S. by dollar value of cargo, and 11th-biggest by tonnage. It hasn’t faced the crush of pandemic-sparked volume that’s mired other ports this year, chiefly those in Los Angeles and Long Beach, and is thus less evocative of the supply-chain crisis. Its volumes are steady, affected in part by a semiconductor shortage that has hampered the automobile industry.
“It’s a completely different story” than in Los Angeles, said Tinglong Dai, a professor at Johns Hopkins University’s Carey Business School. “It is a more hopeful backdrop for Biden’s speech.”
Baltimore provides an illustrative example for Biden because it’s a port with new cranes, dredging the extra berth and a forthcoming expansion of a railway tunnel that will allow trains to “double-stack” containers, senior administration officials said, speaking on condition of anonymity before the trip. Baltimore is an example of the investments that are needed for ports across America, the officials said.
While Baltimore isn’t on the front lines of the shipping crunch, it’s reaped some benefit. The port has received about 24 “ad-hoc” ships since July of last year — ships that went there for lack of another option — and has scheduled new weekly services from India and Southeast Asia, according to said William Doyle, executive director of the Maryland Port Administration, which oversees the port.
“We’re doing good. We’ve got to keep it going,” he said.
The expansion of the Panama Canal has been crucial for Baltimore’s spike in demand, he said.
“That’s been a huge reason why you have the retailers investing in distribution, fulfillment and sorting centers in and around the Port of Baltimore,” he said.
Supply Chain Headwinds
Doyle, who was appointed by Hogan, said he plans to tell Biden “thank you” for the infrastructure bill.
“Governor Hogan and President Biden, they’ve known each other for years. They both love infrastructure,” he added.
There are some headwinds for Biden’s push to smooth out the supply chain. Some in the transport sector fear his coronavirus vaccine-or-testing mandate for large companies could exacerbate labor shortages.
And port investment raises the specter of automation, a battle line between labor and management in infrastructure sectors because unions fear jobs could be eliminated.
“We’re concerned about new technology,” said Krueger, whose union represents clerical workers at the port. He added that he believes his members are more productive than robots: “We want to be part of the improvement in the port.”
Biden hasn’t said when he’ll sign the infrastructure bill. A spokeswoman suggested Monday that it won’t be before next week, when House members return to Washington and the White House can hold a ceremony featuring lawmakers who supported the measure.
(Adds details in 4th paragraph and quotes from Secretary Raimondo in 8th.)
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