US ports and marine terminals are seeking federal help to shoulder additional costs tied to cleaning their facilities and investing in personal protective equipment (PPE), as well as weathering the impact of the coronavirus disease 2019 (COVID-19) on volumes.
Groups representing US ports — both landlord and operating ports — marine terminal operators, and stevedores, tell JOC.com the hoped-for federal aid via grants and loans would ensure their members can keep the nation’s containerized supply chains flowing. The scale of federal help the industry needs isn’t yet clear, but proposals for a seaport grant program up to $1.5 billion and another $400 million for PPE and cleaning supplies give a sense of the damage that has been inflicted and is still expected.
The impact of COVID-19 is pulling down cargo volumes by double-digit percentage rates, making it difficult for marine terminals to meet lease requirements while they have to shell out extra money on cleaning supplies and PPE to keep workers safe. Marine terminals will have a hard time meeting minimum cargo volume commitments via leases with landlord port authorities, while those ports with an operator model will suffer the loss in volume revenue more directly.
Ports, marine terminals, and stevedores handling roll-on, roll-off cargo; breakbulk; and bulk cargoes; and serving cruise ships are also grappling with reduced volumes and foot traffic, respectively. Bulk volumes are down 15 percent to 25 percent so far this year, while one ro-ro port gateway has seen the frequency of ship calls plunge from four a week to once a month, according to the American Association of Port Authorities.
Marine terminal operators need help managing these challenges not only from port authorities, but also from the federal government, Carl Bentzel and Louis Sola, two members of the Federal Maritime Commission, told Congress in a Friday letter. They noted that existing federal programs limit or shut off marine terminals entirely from tapping federal programs.
“As you move forward to legislative consideration of supplemental measures to address COVID-19, we are writing to urge you to consider a means to help alleviate and bridge the financial gaps that could jeopardize continued healthy operation of our domestic marine terminal industry and of our maritime transportation systems,” the commissioners wrote.
PPE grant request coming Wednesday
Marine terminals and waterfront employers on Wednesday will ask Congress to create a one-time, $400 million grant program to help pay for cleaning supplies and PPE equipment, including plexiglass between truck gate operators and drayage drivers, said Lauren Brand, president of the National Association of Waterfront Employers (NAWE). Members of NAWE include APM Terminals, Ceres Terminals, Cooper/T. Smith Stevedoring, Global Container Terminals, and SSA Marine.
Some port authorities have been able to help terminals and stevedores with cleaning and PPE supplies, said Brand. However, with authorities stretching to respond to COVID-19, and the cost of supplies inflated and scarce — forcing some members to turn to Amazon and Home Depot for cleaning agents — marine terminals and stevedores need extra help, she said.
The size of marine terminal operators and stevedores prevent most from accessing Small Business Loans, and while they serve the public good, their status as private companies excludes them from other federal COVID-19 aid programs. Fortunately, Brand said many of them can now tap loans via the third expansion of the Main Street Lending Program, created by the Federal Reserve to keep small and medium-sized business liquid, Brand said.
Considering only about 4 percent of freight through ports supports the local region, she said it’s critical that “these terminals stay open so they can keep serving the nation.”
As it projects a 20 to 30 percent drop in container volumes in the first half of the year and the continuing impact of COVID-19 on non-container cargo volumes and cruise business, the AAPA is asking Congress to consider a $1.5 billion grant program. The grants would help its members maintain their workforces and weather financial shocks as ports face a loss in volume that could trigger the direct loss of up to 130,000 jobs, according to AAPA.
Contact Mark Szakonyi at email@example.com and follow him on Twitter: @MarkSzakonyi.