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In an effort to reduce air pollution and modernize U.S. ports, the Biden administration in 2024 announced $3 billion in grants for zero-emission equipment — including tens of millions earmarked for Philadelphia’s port to buy two new electric cranes to help unload ships.

Ports have embraced the clean energy push, but some have run into a problem. U.S. law requires federally funded infrastructure projects to use American-made products. But according to industry groups, no U.S. firm makes the giant ship-to-shore gantry cranes like the ones Philly is hoping to buy.

So now the Philadelphia Regional Port Authority (PhilaPort), the state agency that owns terminals and logistics facilities along the Delaware River, is asking the Trump administration for a waiver from so-called Build America, Buy America rules.

Those rules — included in a 2021 law that had bipartisan support in Congress — reflect a push under both Republican and Democratic administrations to revive American manufacturing, especially in industries such as semiconductor production and shipbuilding, where continued U.S. deference to China is seen as a potential security risk.

But there are practical constraints to so-called onshoring, from the cost of materials to a shortage of skilled labor. The U.S. manufacturing sector has lost more than 200,000 jobs since 2023.

In the case of the cranes, PhilaPort says that even if it could procure them in the U.S., it would still face risks because of a lack of “a reliable domestic supply chain for spare parts and service.”

The Environmental Protection Agency said it is reviewing PhilaPort’s application. It might not be a slam dunk: President Donald Trump’s administration has slashed billions of dollars in funding for Biden-era clean energy initiatives — and early last year, PhilaPort’s grant appeared to be briefly suspended.

Yet Trump has also expressed support for union dockworkers like the ones who would operate new cranes at Tioga Marine Terminal in Port Richmond. The International Longshoremen’s Association has celebrated the initiative, known as the Clean Ports Program, saying it protects jobs against automation.

If the EPA does sign off on the request, the port authority will have to navigate a geopolitical minefield.

Grant recipients are prohibited from using the funds to buy equipment made in China, whose state-owned Shanghai Zhenhua Heavy Industries Co. Ltd. (ZPMC) produces 70% of the world’s ship-to-shore cranes, including the vast majority in use at U.S. ports.

American reliance on Chinese-made critical port infrastructure has raised national security concerns, magnified by the FBI’s 2021 discovery of “intelligence gathering equipment” onboard a ship that was delivering ZPMC cranes to Baltimore’s port, according to a congressional investigation.

Only three companies outside China, two in Europe and one in Japan, make ship-to-shore cranes available for international buyers, according to the American Association of Port Authorities. Each firm’s cranes would likely be subject to tariffs imposed by the Trump administration.

Another wrinkle: As PhilaPort has sought support for the waiver from Pennsylvania’s congressional delegation, some lawmakers have expressed reservations that even cranes made by a non-Chinese manufacturer might include parts made in China. Limiting that exposure could be challenging, given China’s dominance in these intermediate goods.

It remains to be seen whether lawmakers will ultimately back the request. Labor unions such as United Steelworkers have broadly opposed exemptions from domestic production requirements. A spokesperson for United Steelworkers said the union is “still reviewing the specifics of this case.”

U.S. Rep. Brendan Boyle (D., Pa.) said he “fought hard” to include the Build America Buy America provision in the 2021 law. “So I’m naturally quite concerned any time an entity is attempting to circumvent these important provisions that protect American jobs and industries,” he said in a statement.

“PhilaPort’s management needs to do a much better job explaining why a waiver in this case is absolutely necessary,” said Boyle, whose district includes the Tioga terminal.

Spokespeople for U.S. Sens. John Fetterman (D., Pa.) and Dave McCormick (R., Pa.) did not respond to messages seeking comment.

Those restrictions will likely increase the cost. Of the $80 million awarded to PhilaPort by the EPA, the port authority had budgeted $47 million for two cranes at Tioga Marine Terminal.

Now, “it’s unclear if we can do two [cranes] for that price,” said Ryan Mulvey, the port authority’s director of government and public affairs.

Replacing diesel-powered cranes

The 2022 Inflation Reduction Act passed by Congress and signed by President Joe Biden presented an opportunity for PhilaPort’s Tioga Marine Terminal, which was built in the 1960s and until recently was still using two diesel-powered cranes that had been installed in the late ‘60s and early ’70s.

The cranes reached the end of their useful life and were recently dismantled, and the port authority has installed electrical infrastructure to support zero-emission equipment at Tioga, which handles cargoes such as forest products, containers, and steel.

Cranes can lift two 20-ton cargo containers off a ship at a time. Without them, “it really restricts the amount of cargo you can put through the terminal,” said Andrew Sentyz, president of operator Delaware River Stevedores, which leases the terminal from the port authority.

About 100 to 200 union longshoremen work at the site, depending on cargo volumes, he said.

When PhilaPort started reaching out to vendors, at least three — Konecranes of Finland, Phoenix-based Stafford Crane Group, and Swiss-German firm Liebherr’s U.S. affiliate — indicated they were working toward making ship-to-shore cranes that would meet domestic content requirements under the Build America, Buy America Act, a provision of Biden’s 2021 bipartisan infrastructure law. (Stafford is a new entrant in the STS crane market.)

But when the port authority proceeded to bid for the project last spring, four potential bidders said they were not able to deliver cranes meeting PhilaPort’s technical specifications within its schedule or budget, according to the application it filed with the EPA in September.

One firm said Buy America rules would increase the cost of the project as much as threefold. It would take three to five years to build the manufacturing facilities needed to comply with the law and a further 36 months to complete production. By comparison, cranes that are not subject to those rules can be completed within 28 months, the vendor said.

“In the absence of continuing federal incentives toward onshore crane manufacturing, the vendor advised there is not sufficient market demand to continue to scale up its domestic manufacturing of cranes,” PhilaPort’s application says.

Another vendor told the port authority that “the low volume of current demand for BABA-compliant cranes makes domestic manufacturing currently uneconomical.”

To comply with Buy America regulations, more than 55% of the total cost of components in a manufactured product must be from U.S.-made parts.

The EPA has acknowledged the limited domestic production of zero-emission port equipment and in 2024 temporarily lowered that requirement to 25% for certain items. But to take advantage of that reduced threshold, installation of the STS cranes would have to begin by the end of the year — a timeline PhilaPort says is not realistic.

‘Nonexistent for decades’

PhilaPort’s findings were consistent with broader industry research.

American crane manufacturing “has been nonexistent for decades,” Cary Davis, president and CEO of the American Association of Port Authorities, told the U.S. trade representative last May in comments opposing Trump’s proposed 100% tariff on Chinese-made cranes.

Barriers to reviving domestic industry include a shortage of welders and the fact that “American steel is significantly more expensive than European or Asian alternatives,” Davis said.

Likewise, the National Association of Waterfront Employers told the Biden administration in 2024 that domestic crane manufacturing is years, “if not decades, away from being a reality.”

The EPA is aware of the industry input, and as part of its review of PhilaPort’s application, the agency is now conducting its own market research to assess the availability of American-made cranes, a spokesperson said.

There have been signs of some incremental progress toward diversifying supply chains. In September, California-based PACECO Corp., a subsidiary of Japanese firm Mitsui E&S, said it had secured a contract to supply two ship-to-shore cranes to a terminal at the Port of Long Beach in California. The cranes will be built in Japan, the companies said, and include “American-made components supplied by U.S. companies.”

“This order underscores the shift now underway in the U.S. container handling market,” Troy Collard, general manager of sales at PACECO, said in a news release announcing the order. He said the order shows there are “reliable alternatives” to Chinese manufacturers “that both meet the needs of U.S. ports and support broader national security and supply chain resilience goals.”

Scrutiny of China

The focus on domestic production comes as Congress and federal law enforcement have in recent years stepped up scrutiny of potential security risks associated with Chinese equipment at U.S. ports.

China’s ZPMC built about 80% of the ship-to-shore cranes in use at U.S. ports — including several bought by PhilaPort for the Packer Avenue Marine Terminal in South Philadelphia. The firm has close ties to the Chinese Communist Party, according to two Republican-led House committees that investigated the company.

In 2024, three years after the FBI’s discovery in Baltimore, the committees said their investigation found that ZPMC had installed communication devices on crane components and other maritime infrastructure at two U.S. seaports. These cellular modems, not included in contracts with U.S. ports, were “intended for the collection of usage data on certain equipment,” constituting “a significant backdoor security vulnerability that undermines the integrity of port operations,” the investigation found.

China has called concerns about spying “overly paranoid.”

But under Beijing’s “highly acquisitive data governance regime and comparatively high levels of control over PRC firms,” Chinese-made equipment and software in port systems enable surveillance and “may cause delay or disruption to the critical operations of U.S. maritime transport systems,” Isaac Kardon, senior fellow for China Studies at Carnegie Endowment for International Peace, told Congress last year.

It is not easy to completely remove China from the supply chain, however. In response to a request from lawmakers, PhilaPort asked prospective bidders if they could produce the cranes without Chinese parts, Mulvey said. Only one firm said it could source “100% without Chinese components,” he said.

PhilaPort noted in the waiver application that it is considered by the Pentagon as one of 14 “strategic military seaports.” During the Iraq War, that enabled the port to handle Army shipments.

“These cranes enable the efficient handling of heavy, oversized, and mission-critical military cargo, directly supporting the Department of Defense’s logistical and deployment capabilities,” the application says.