Port of New York/New Jersey faces growth issues
The Port of New York and New Jersey (PONYNJ) plays a key role for commerce on the US East Coast. It particularly serves the local New York metropolitan area – a location that encompasses nearly 20 million people, the largest in the United States.
By comparison, the Los Angeles metropolitan area has a population of some 13 million; Chicago, over 9.5 million. According to the Port Performance Task Force, released in June by the Port Authority of New York/New Jersey (PANYNJ), over the past 13 years the PONYNJ has experienced steady growth in cargo volumes with the exception of 2009. This growth has resulted in nearly doubling the amount of cargo coming to the port.
In addition, the size of ships has steadily grown because of the economies of scale achieved and the savings that result. With these larger ships has come an increase in capacity. To accommodate them and the larger ships that will be coming when the expanded Panama Canal opens in 2015, marine terminal operators (MTOs) at the PONYNJ have invested over $2 billion on new cargo cranes, new cargo handling equipment, improvements to the infrastructure of the container terminals, and new operating systems.
Terminal Developments
Among recent developments, APM Terminals has added four new cranes with a 22-row reach; refrigerated container racks that triple the terminal’s processing capacity to 1,964 containers at a time, expanded its terminal area to 350 acres from 266 acres, and added two low-emission, rubber-tired gantry cranes to its fleet, which reduce the terminal’s oval emissions by 40 percent.
Over the past five years, Maher Terminals improved its infrastructure, acquired equipment, and upgraded pivotal technology. Today the terminal features one of the world’s largest straddle carrier fleets, which speed the flow of containers between ships and rail connections. It also added two Liebherr Megamax ship-to-shore (STS) cranes, each with a waterside outreach of 200 feet, a span of 100 feet, and a landside back reach of 75 feet, which substantially increases the capacity of the terminal.
The New York Container Terminal (NYCT) increased the length of its berth from 2,500 to 3,000 feet and constructed an intermodal facility. NYCT was linked to transcontinental rail routes by the terminal’s own on-dock rail operations, called ExpressRail Staten Island, which is capable of producing mile-long trains.
Port Newark Container Terminal (PNCT) is building out ExpressRail Port Newark to double PNCT’s intermodal capacity from 125,000 lifts per year to 250,000 by the end of this year. It is also converting 33 acres of its on dock container terminal transfer facility to serve as a high density container yard. In addition, PNCT is adding three new cranes rated to support Super Post Panamax vessels as well as improving the berths to support the cranes. Upgrades to the berths include wharf power augmentation, duct bank conduits, vaults, and cables. By 2015, a new gate will increase PNCT’s throughput.
In turn, Mediterranean Shipping Company (MSC), one of the world’s largest container vessel shipping lines, committed to increase the amount of cargo it moves through PNCT from 414,000 containers to 1.1 million containers by 2030.
Global Terminal is augmenting Port Jersey Boulevard to increase access to the terminal. Officials there say that the terminal is on track to become the port’s first terminal operator to deploy automated rail-mounted gantry cranes (RMGs) that maximize efficiency on the Port Jersey Channel. The first five (of 20) cranes were in operation in March this year, and greatly increase the facility’s ability to process cargo. (See related story on this page.)
Port Impediments
The improvements are much needed to meet supply chain demands, especially since the PONYNJ has faced many impediments to the smooth movement of ships and goods, including a particularly harsh winter last year.
For one, there were reports earlier this year that trucks loading at Port Newark experienced wait times of sometimes seven to eight hours just to load and offload containers. Not only have these delays cost businesses; they have hurt the trucking and logistics companies serving them, say nothing of truck driver frustration and pay.
“Port congestion delays our trucks from picking up containers in a timely manner,” says Joe Noonan, president and founder of Marine Container Services (MCS). “It’s important that the pier terminals provide a quick turn time for our drivers to pick up loads and return empties within a responsible period of time,”
MCS is located four miles from PNCT.
Noonan sees pier congestion as the biggest impediment to moving cargo in/out and around the New York/New Jersey area and Noonan attributes the problem to a shortage of labor at pier terminals.
In addition, operating hours differ from one terminal to another. “Steamship lines require the return of empty containers to different terminals each day,” he adds. Short term road worthy chassis also are not always available at every chassis depot.
Noonan also maintains that the truck gate should be as important to the stevedores as is vessel loading and unloading. “Currently the vessel operation has priority over the truck gate,” he states.
PANYNJ spokeswoman points out that the larger ships, along with the dynamic of vessel bunching, has created high volume periods that stress the terminal infrastructure. “This has lead to periods of congestion,” states Lenis Rodrigues, Port Authority spokeswoman.
PANYNY’s Port Performance Task Force report outlines that labor issues and congestion were issues for importers and exporters. “Many looked at altering their supply chains and diverting cargo to other ports,” it writes. While all indications suggest that 2014 will be more productive, the PANYNJ acknowledges that cargo volume growth is moderating. “No longer do we consider growth to follow the old rule of escalation at twice that of GDP,” the report suggests.
The reason: other ports along the East Coast are ramping up investments in port infrastructure, and competition for discretionary cargo is heating up. While the PONYNJ has the advantage of a large local market, i.e. local cargo, cargo destined to the Midwest and Eastern Canada only encompasses approximately 15 percent of its total throughput.
Meanwhile, shipping companies are looking to take advantage of economies of scale by deploying larger ships that are resulting in fewer sailings and excess capacity. This excess capacity has contributed to plummeting rates, resulting in profit losses for steamship lines.
As the Performance Task Force points out, in 2004, there were only 100 ships in the world that were larger than 8,000 TEUs. Today there are over 300 ships with 12,000 to 18,000 TEUs.
“While investments in our port were driven by the need to keep up with the growth in volume, it is no competition with other ports that will be the driver,” the report states. “Larger ships may mean fewer ship calls, but each vessel will discharge more cargo in a single call.”
Rodrigues continues: “Larger vessels are by far our biggest concern, which is not only due to the growth of the Panama Canal, but as Asia manufacturing migrate south and west, traditional West Coast routings are being affected as the Suez Canal becomes more of a preferred routing from South East Asia and India.”
Infrastructure Improvements
Completion of the “Raise the Roadway” project on the Bayonne Bridge is critical to clearing the way for larger ships to call on the port.
Currently, construction on the $1.3 billion project to raise the roadway of the Bayonne Bridge is in full swing, an effort that will lift the road 64 feet—from 151 feet to 215 feet—within the confines of the bridge’s current arch. Completion is scheduled for summer of 2016.
Meanwhile, PANYNJ is working with the U.S. Army Corps of Engineers to deepen the turning basin for the ships calling on Port Newark/Elizabeth to accommodate larger, deeper-draft vessels.
“Once the harbor deepening project reaches the stated goal of 50 + 2 feet (2 feet of clearance underneath the keel) we do not expect there will be any restrictions imposed on larger vessels,” remarks Rodrigues.
A host of recommendations are also outlined under three tier levels in the Port Performance Task Force report. Tier One addresses a chassis management improvement system, truck management system implementation, integrated port community system (PCS) utilization, coordination of terminals and assignment of gate hours, and the use of radio frequency identification (RFID) technology to measure and report on trucks movements.
Currently trucks account for 86 percent of all traffic at the PONYNJ with rail at 14 percent of port activity, reports Rodrigues.
Tier Two recommendations encompass the availability of customer service, guideline development for extension of free time in extremis situations, the construction of ExpressRail support track, development of a street turn system for empty containers and chassis, the availability of a dashboard of current conditions, and the compilation of key performance indicators (KPIs).
Tier Three recommends are: the establishment of mechanism to ensure continuity of the PPTF beyond the report’s publication, development of a “Guide Book”, publication of a snapshot of the next day’s activity, exploration of opportunities for establishment of inland ports, development of a container transfer fee (CTF) program, a report of the quality of labor needed in comparison to labor ordered, development of a unified customer service center, incorporation of performance standards for empty container and chassis depot transactions in tariffs, encouragement to ocean carriers to use block stowage of rail cargo, utilization of touch pads at gate pedestals, movement of rail cargo on weekends, and the development of a crisis communications plan.
Already the port has adopted an expansive roadway capital plant to improve its network of roadways servicing Port Newark/Elizabeth. The goal is to create maximized logistics efficiencies by creating greater roadway capacity, increased traffic flow and enhanced safety standards.
“Because so much of the ports volume is being moved by truck traffic it is imperative that we expand roadway infrastructure to meet future demands,” Rodriques says. “There are several projects that are have different completion dates and in some cases have already been completed.”
Meanwhile, the PANYNJ continues to expand rail facilities by adding footprint, capacity and two tracks at both NYCT and PNCT. Simultaneously, it maintains its ongoing augmentation of Port Jersey Rail while continuing efforts to redevelop the Greenville Yard rail facility adjacent to Global Terminal.
A landmark, in May last year, PANYNJ ExpressRail service surpassed 5 million containers handled since its first rail facility opened for business in 1991. In addition, ExpressRail Elizabeth, which services APM and Maher terminals, has expanded to 53,000 feet of on-dock track, enough to accommodate four 10,000-foot trains.
With more shippers turning to intermodal, rail is increasingly important at the PONYNJ. “The rail industry is always looking at ways to be competitive on short haul moves, and currently we are working with our rail carriers to service inland port locations within 250 miles,” comments Rodrigues.”But at this time we are not looking at opportunities any shorter than 250 miles. “
By the Numbers
Port Authority of New York/New Jersey (PANYNJ) 2013 trade statistics indicate that in 2013 the container trade in total TEUs was off 1.1 percent over 2012 figures (5.467,347 TEUS versus 5,529,909 TEUs). Those figures include loads and empty containers. Imports for 2013 were down 0.5 percent at 2,804,001 TEUs; 2,817,805 TEUs for 2012. Exports for 2013 were also down 1.8 percent for 2013 at 2,663,346 TEUs; 2,712,104 TEUs for 2012.
While Lenis Rodrigues, Port Authority spokeswoman reports that the PANYNJ does not differentiate between import and export volume, she reveals that this year PONYNJ is expecting between 3.5 and 4 percent growth in volume. “Currently we are slightly ahead of plan,” she says.
At 54 percent, Asia represents the port’s largest trading region. “Within the Asia region China is 19 percent followed by India at 5 percent,” she adds. By comparison, Europe represents 21 percent of PANYNJ’s business.
PANYNJ statistics from 2013 indicate that for imports, Brazil leads all other nations in terms of growing trade for the port. Last year imports from Brazil grew 17.4 percent over 2012 figures for a total of 55,747 TEUs. Commodities are stone, plaster cement, wood articles, paper products, and coffee and tea.
South Korea ranked No. 2 (11.9 percent growth over 2012 with 56,809 TEUs) and Vietnam, No. 3 (11.7 percent growth over 2012 with 73,304 TEUs).
On the export side, the Netherlands rank as PANYNJ’s leading growth trading partner with 11.3 percent growth over 2013 and 43,831 TEUs. Top commodities are vehicles, plastics, and miscellaneous cargo.
France came in No. 2, up 9.7 percent over 2012 with 15,843 TEUs; Nigeria, No. 3, up 9.5 percent with 16,537 TEUs.
For 2013, the largest imported containerized cargo categories were furniture (283,033 TEUs), beverages (173,348 TEUs), machinery (158,767 TEUs), followed by apparels, miscellaneous (157,878 TEUs). For exports they were paper, scrap and waste (277,711 TEUs); automobiles (140,910 TEUs); automobile parts (49,008 TEUs) and household goods (38052 TEUs).
Among seaports, the Port of New York/New Jersey ranks No. 3 in the nation, having handled 5.467 million TEUs in 2013 behind Los Angeles’ 7.868 TEUs and Long Beach’s 6.70 TEUs.