The UD Department of Transportation (DoT) has issued a “Waiver of Buy America requirements for the Pacific Island Territories and the freely Associated States.”  These are the Commonwealth of Northern Marina Island, Guam and American Samoa.

The waiver is for one year and covers federal infrastructure grant funding under the Bipartisan Infrastructure law.

DoT issued its notice of a proposed waiver for new projects in August 2023. The Port of Guam submitted comments in support of the waiver, noting that over the last several years it has made several applications for waivers that have been turned down. However, Guam needs to replace three STS cranes it received second hand from the Port of Los Angeles in 2008. It argued a waiver is appropriate as there are no US manufacturers of container cranes.

The Port of Guam has already announced that it was not granted a waiver for its intended purchase of two new STS cranes, but the DoT announcement provides further information.

In addition to STS cranes, the port wanted a waiver for heavy duty yard equipment. In 2022 the port received $126,609.00 in federal funding from the US Environmental Protection Agency towards the purchase of two yard tractors. The grant came with a required local match of $113,391.00, making $240,000 available to purchase the two tractors. The ports tender was subject to Buy America requirements and only one company bid, submitting a price of US$445,470.00 for two diesel powered machines.

The DOT noted that Guam and the Pacific Territories are subjected to very high costs for materials and shipping when sourcing steel, other materials and finished equipment from the mainland US states. Recognising that requiring the purchase of Buy America compliant products “may result in substantially higher costs and require longer lead times to procure, leading to impacts on both project competitiveness and project delivery” the DoT granted the waiver.

However, the waiver explicitly does not apply to STS cranes. “DOT recognises the importance of security considerations for port equipment purchases, particularly for ship to shore cranes, and the recently announced Biden-Harris Administration effort to bolster port security. The Department also recognises that the issues extend to U.S. ports more broadly, beyond those in the Pacific Island territories. As a result, DOT has chosen to exempt ship to shore cranes from the waiver and will address domestic supply issues for these critical assets through separate actions. DOT will exercise additional oversight for assistance agreements involving ports during the period the waiver is active,” the DoT said.

The actions the US plans to take to address “domestic supply issues” for STS container cranes include supporting PACECO to “re-enter” the market. A statement from PACECO itself clarifies that has partnered with Brookfield to “reestablish final assembly of port cranes in California”,  but it is not clear that this includes STS cranes as well as RTGs.

However the situation unfolds, excluding STS cranes from this latest waiver is no real surprise. Whether they are well founded or not, the US has made its concerns about Chinese-made STS cranes being an infrastructure and cyber security risk well known. Guam is a very sensitive location in this respect. It the strategic hub for the United States’ efforts in the Indo-Pacific region and home to a new military base. In 2022 the US Marine Corps opened the Camp Blaz base in Guam as part of an agreement with Japan to relocate approximately 9,000 Marines from Okinawa, Japan to Guam, starting in 2024. A large amount of military cargo for Camp Blaz will be handled through the Port of Guam.

The UD Department of Transportation (DoT) has issued a “Waiver of Buy America requirements for the Pacific Island Territories and the freely Associated States.”  These are the Commonwealth of Northern Marina Island, Guam and American Samoa.

The waiver is for one year and covers federal infrastructure grant funding under the Bipartisan Infrastructure law.

DoT issued its notice of a proposed waiver for new projects in August 2023. The Port of Guam submitted comments in support of the waiver, noting that over the last several years it has made several applications for waivers that have been turned down. However, Guam needs to replace three STS cranes it received second hand from the Port of Los Angeles in 2008. It argued a waiver is appropriate as there are no US manufacturers of container cranes.

The Port of Guam has already announced that it was not granted a waiver for its intended purchase of two new STS cranes, but the DoT announcement provides further information.

In addition to STS cranes, the port wanted a waiver for heavy duty yard equipment. In 2022 the port received $126,609.00 in federal funding from the US Environmental Protection Agency towards the purchase of two yard tractors. The grant came with a required local match of $113,391.00, making $240,000 available to purchase the two tractors. The ports tender was subject to Buy America requirements and only one company bid, submitting a price of US$445,470.00 for two diesel powered machines.

The DOT noted that Guam and the Pacific Territories are subjected to very high costs for materials and shipping when sourcing steel, other materials and finished equipment from the mainland US states. Recognising that requiring the purchase of Buy America compliant products “may result in substantially higher costs and require longer lead times to procure, leading to impacts on both project competitiveness and project delivery” the DoT granted the waiver.

However, the waiver explicitly does not apply to STS cranes. “DOT recognises the importance of security considerations for port equipment purchases, particularly for ship to shore cranes, and the recently announced Biden-Harris Administration effort to bolster port security. The Department also recognises that the issues extend to U.S. ports more broadly, beyond those in the Pacific Island territories. As a result, DOT has chosen to exempt ship to shore cranes from the waiver and will address domestic supply issues for these critical assets through separate actions. DOT will exercise additional oversight for assistance agreements involving ports during the period the waiver is active,” the DoT said.

The actions the US plans to take to address “domestic supply issues” for STS container cranes include supporting PACECO to “re-enter” the market. A statement from PACECO itself clarifies that has partnered with Brookfield to “reestablish final assembly of port cranes in California”,  but it is not clear that this includes STS cranes as well as RTGs.

However the situation unfolds, excluding STS cranes from this latest waiver is no real surprise. Whether they are well founded or not, the US has made its concerns about Chinese-made STS cranes being an infrastructure and cyber security risk well known. Guam is a very sensitive location in this respect. It the strategic hub for the United States’ efforts in the Indo-Pacific region and home to a new military base. In 2022 the US Marine Corps opened the Camp Blaz base in Guam as part of an agreement with Japan to relocate approximately 9,000 Marines from Okinawa, Japan to Guam, starting in 2024. A large amount of military cargo for Camp Blaz will be handled through the Port of Guam.