Business, Economy Strong
‘Yes’ to Big Ships
Volume May Double
Volume May Double
“We come out of a master plan with at least putting out there that, over a 30-year timeframe, you can see a doubling or more of freight,” he said. “We actually don’t need to spend time seeing if that’s correct, if it’s going to be 2 percent or 3 percent annual growth or whatever. What it really means is the Port Authority, with its tenants, needs to plan and define – or actually redefine – volume triggers such that we stay adequately ahead of the capacity curve to meet that demand.
“You don’t just build and they come,” Ruda continued. “You have volumes and other operational triggers that really begin to inform when and where you do things. For a Port Authority that’s not given our own geography, that’s not creating huge tracts of industrial land, we’re going to have to make very prudent land use choices as we evolve and grow over time.”
Rooney pointed out that the port’s 10-year plan approved in 2017 provides a series of recommendations on how land use may be optimized in order to handle expected demand.
“There are still a number of things we need to do moving forward,” Rooney said. “For example, we would expect that, in the future, and this aligns with what the community stakeholders and environmental justice folks are looking at, we’re looking at an evolution of cargo-handling equipment and all of the industrial equipment in the port transitioning from diesel to electric technology or some alternative fuel.
“Also,” she said, “in order to create efficiencies in the terminal, we’re looking to more communications between the various types of equipment. That’s all going to require a significant investment in electric infrastructure and telecommunications infrastructure beyond what we’ve got right now.
“The port master plan lays out as an early action item doing a study of the capacity that we will need in the utility infrastructure so that we can build that and get that in place before it’s actually all needed,” she said.
Resiliency Critical
Rooney noted that resiliency is a vital aspect of future plans.
“When we talk about resiliency, it’s not just about resiliency to, God forbid, another Hurricane Sandy [which hit the Atlantic Coast in 2012], but it is resiliency to any type of disruption to the supply chain,” Rooney said. “When we talk about climate change and sea level rise, we are in the midst of a study that will help us redevelop and rebuild all of the wharf and pier infrastructure. That clearly needs to be done when we have 60- to 70-year-old infrastructure that the ships are all tying up to. That clearly needs to be done with sea level rise and resiliency in mind.”
Asked about his priorities for the port, Ruda noted that the Port Department is part of a bistate entity that also encompasses airports, bridges, tunnels and bus and rail transit.
“The priorities fall into two buckets,” he said. “One is that the Port Department doesn’t exist in a vacuum at the Port Authority. We’re part of a broader agency, and that agency has its own set of guiding principles and imperatives. Some of that goes down to how we work, with honesty and integrity. Like all public and private institutions, we have a big focus here on diversity and inclusion. You might call this the behind-the-curtain stuff that people may not see on a day-to-day basis.”
Ruda said the second metaphorical bucket holds priorities more specific to the Port Department.
“One is connecting and being far more visible with the customer and shipper community,” Ruda said. “I think we’re doing that.
“Another priority for me is that I think the port needed to renew and reinvigorate its relationship with waterfront labor, and I think that’s moving in the right direction,” he continued.
“And I think this is not singularly a port initiative, but there’s much more of a premium today at the Port Authority to be executing,” Ruda said. “It’s not enough that you make phone calls. It’s not enough that you send emails.
“It’s actually delivering on projects and programs – things like growing our intermodal rail,” he said, citing recent completion of a new intermodal container facility at Bayonne. “It’s not just an aspirational goal with no metrics.
“For me, it’s like acting like, well, now we’re the No. 2 port in the country, and we’ve got to act like it,” Ruda said. “We’ve got to have a presence. We’ve got to be engaged with our customers.”
For example, a four-stop Ruda business trip to Europe a few weeks ago revolved around meetings with the four largest container carriers calling New York/New Jersey.
Cargo Shift Continues
“From a market standpoint, there is one surprising thing,” Ruda said. “If you asked me three years ago about the shift [of cargo routings] from the West Coast to the East Coast, I would have answered that it had sort of played itself out and was no longer an issue.
“But that’s not the case,” he said. “We’re continuing to see a shift of that intermodal cargo from the West Coast to the East Coast. I’m not suggesting that the Port of New York and New Jersey is capturing 100 percent of it, because my counterparts to the south are also seeing some of that volume, but I think that is certainly part of our growth story here.
“I attribute that to having the infrastructure, raising the bridge, but it’s big-ship economics and also Class I railroad economics,” Ruda went on to say. “There are 19 different ports you can move through to get to the Midwest, so we have to compete for that cargo.”
Records volumes would indicate success in that competitive realm. For 48 of the first 49 months of Ruda’s tenure at the Port of New York and New Jersey, the port has seen month-over-month gains in intermodal cargo throughput.
“Growing that intermodal is definitely one of our strategic imperatives,” Ruda said.
Ruda said, even though New York/New Jersey is a landlord port, Port Department leadership does not hesitate to actively engage in righting the figurative ship when necessary.
Rooney interjected that, when the Port of New York and New Jersey a half-dozen years ago embarked on its collaborative Council on Port Performance initiative, “the supply chain was falling apart in the Port of New York and New Jersey, and we had problem after problem after problem after problem.”
“And we stepped up with a way to address that,” Rooney said. “In the conversations that took place at that time, we helped all partners in the supply chain understand that we need to be rowing in the same direction. If the trucking industry has an issue or the chassis industry has an issue, it’s not unique to them. It’s got a cascading effect, with upstream and downstream implications.
“So,” she said, “there was a change in mindset a couple of years ago from this being just your own issue, as an individual business enterprise, to that this is about the larger Port of New York and New Jersey and all of the partners needing to work together for that cargo.”
All that said, when does New York/New Jersey anticipate surpassing the Port of Los Angeles in containerized cargo volume to take over the nation’s No. 1 spot?
“That’s a good aspiration,” Rooney said, “but we’ve got a ways to go.”
Through the first eight months of calendar 2019, New York/New Jersey realized volume of 4,992,146 total import and export TEUs, up 6 percent from the TEU count for the January-through-August period of 2018. New York/New Jersey’s eight-month figure of 4,992,146 puts the port ahead of the Port of Long Beach, at 4,971,407 TEUs for the period, but still well behind the Port of Los Angeles, which moved 6,311,872 TEUs over that time span.
