Planning for future business with capital projects, efficiency programs

Last year set records at the Port of New York and New Jersey and the records continue into 2016. The port handled a record 3.6 million containers, a figure which was up 9.6 percent over 2014. Loaded import containers increased a remarkable 8.2 percent.
Every month of 2015 set a record, reported the Council on Port Performance, a public-private body convened to address challenges faced by the port community. The port’s U.S. East Coast market share last year hit 15.9 percent, also a record. January 2016 was the best January ever for both containers and rail.

And containers were not the only business to thrive at the Port of New York and New Jersey in 2015. “Our automobile business was up 21.5 percent last year,” said Andrew Saporito, deputy director of port commerce at the Port Authority of New York and New Jersey. “We have been successful in growing that business which had been down for a while by introducing an incentive program.”

Perhaps the biggest challenge faced by the Port of New York and New Jersey is how to cope with its own success. The port has seen total cargo container growth of over 20 percent in the last decade. Dealing with those increases, and anticipating future growth, especially with coming arrival of megapships, means that the port must grow its physical footprint and find new ways to operate infrastructure more efficiently.

Among capital infrastructure projects at the port, a project to deepen the harbor and its channels to 50 feet is ongoing. The port’s on-dock ExpressRail is being expanded. The Bayonne Bridge roadway is being raised to accommodate the new breed of megaships. That project’s timetable was revised a few months ago. (See sidebar on this page)

The significant increases in container volume in the Port of New York and New Jersey last year derived from a number of sources, including organic growth and added vessel services. But cargo diverted from the West Coast in the wake of the labor slowdown there also played a role.

“We have found that much of that diverted cargo is staying with us,” said Saporito. “The strong dollar and general growth in the market contributed to a growth in imports. People are spending money.”

The Port Authority anticipates that in 2018, the bigger ships will start arriving at the port. “We need to be ready to handle that,” said Saporito. “There are a lot of discussions and planning going on.”

The expanded Panama Canal will allow larger ships to traverse that waterway and arrive at East Coast ports. “We focus as much on the Suez Canal,” said Saporito. “Many of the large ships will be coming from that direction.”

The Council on Port Performance is a key initiative designed to drive and execute enhancements and improvements at the port, preparing it for the expected business. “The terminals are buying new cranes and installing new gate systems,” said Saporito. “A truck appointment system was rolled out at the Global Terminal on a pilot basis. The truck appointment system came out of the work of the council.”

Last year, the Port Authority launched an online tool called the Terminal Information Portal System, or TIPS, the first of its kind in the nation. TIPS posts news from the Port Authority and container terminal operator, on early or late closures, traffic conditions, and weather-related measures—as well as vessel schedules—for each of the six port terminals. TIPS also provides truckers with import container availability. By entering a container number, they are able to view a box’s location, availability for pickup, and status of freight charges and demurrage. Trucking companies can also use the platform to see containers booked for shipments, the availability of empty containers, and information about when and where the containers can be returned.

According to the minutes of the most recent Council on Port Performance meeting, which took place on March 9th, TIPS usage has been disappointing. The council members agreed that the program needs more exposure and the Port Authority announced it will prepare a tool kit to help ocean carriers market TIPS.

In addition to the harbor deepening and the Bayonne Bridge raising, capital programs at the port include an expansion of the on-dock ExpressRail. “This summer we are hoping to have a shovel in the ground for the development of the Intermodal Container Transfer Facility at the Global Terminal in Jersey City,” said Saporito. “That represents the next phase of ExpressRail.”

Upon completion of the ICTF project, ExpressRail will have a total projected capacity of 1.4 million to 1.5 million lifts annually, up from the current 1.2 million. The Port Authority has a goal of getting 20 percent of the cargo it handles on rail by 2020.

Among the ongoing green programs at the port, the Port Authority continues with its truck replacement program, an incentive to replace older trucks, backed by $9 million in grants from the federal government. “Right now we are focusing on 1994 and 1995-era trucks,” said Saporito.

Another Port Authority program incentivizes terminal operators to replace their cargo handling equipment with newer, cleaner models. That program is moving forward with a $2 million federal government grant.

Last fall, a shore power project was initiated at the Brooklyn Cruise Terminal. “This spring ships calling on the terminal will be plugging in,” said Saporito. “This is first shore power project in the harbor.” There are no similar plans for cargo terminals at this time.

Although the port won’t be able to sustain the kind of growth numbers it saw last year because of diversion from the West Coast, the Port Authority is projecting robust cargo growth numbers for the coming hears. “We are retaining some of that West Coast cargo,” said Saporito.

“We see growth of three to four percent per year over the next three to four years.”