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New York and New Jersey ready for the big-ship era


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In an interview with FBJ, the Port of New York and New Jersey’s manager for market research and analysis, Thomas Hannan, principal marketing analyst Daniel Pastore and manager of strategic analysis and industry relations, Richard Breffeilh explain how the premier US maritime gateway is readying itself for the challenges of the future.


Like ports all over the world, the increase in typical container ship size to 13-14,000teu or more has meant heavy spending at the Port of New York and New Jersey (PANYNJ). But completion of programmes to raise the height of the Bayonne Bridge and deepen channels to 50 feet should allow the prime North-East US gateway to increase maximum ship size from 9,200-9,300teu vessels – currently the maximum that are routinely handled - to about 14,000teu. The Bayonne Bridge programme, originally scheduled to be completed in early 2015, has slipped somewhat but the channel-deepening project is on schedule to finish during the first quarter of next year. Important though New York


is, it is no good its acting in total isolation as shipping operators will wish to serve a range of ports with the same ship. But similar programmes are in progress at Savannah and Jacksonville, while Norfolk has already deepened its channels to 50 feet,


which should give a reasonable range of 14,000teu ship-capable destinations on the US east coast. The US might have had an


image of a gas-guzzling, high- energy consuming nation of huge cars and even bigger trucks in the past, but green issues are now as big a concern as in Europe. The port is anxious for rail to push up its share of inland transportation to and from the port from its current 14-15% or so and for barge traffic to increase from its current negligible level. The port is planning to extend


its ‘Expressrail’ on-dock rail network to a fourth facility, the Global Terminal. (Elizabeth Port Authority Marine, Port Newark, Howland Hook Marine Terminal/ Port Ivory already have on-dock rail.) This will make transfer to trains much faster than is currently possibly using barge or road feeders to the existing rail terminals and would allow inbound traffic to be railed out the same day. “It will also help reduce congestion in the port, and there


won’t be the added expense of road drayage, and it also helps reduce fuel consumption and emissions,” explains PANYNJ. It will also help increase the Global Terminal’s throughput without increasing its physical footprint. The cargo industry does seem


to be on-message in this respect and rail traffic through the port is in fact growing at twice the overall average, says PANYNJ. Given that so much of the


inbound cargo is destined for the New York metro region on the port’s doorstep, road will always be the dominant mode of inland transport, but the Port Authority is encouraging rail operators to complete on shorter hauls than the 4-600 mile threshold below which rail has not traditionally been considered viable – for example, to Buffalo or Albany in New York state. Improving longer distance


links to the rest of the US is an important competitive weapon for


New York. Competition with other US ports is most


intense, not for the New York metropolitan


region, but for


inland places like the Midwest or Western Pennsylvania. Other ports, with relatively small hinterlands of their own, are apt to go all-out to try and capture traffic from New York’s backyard, though most traffic for the region that is shipped through more distant ports is unstuffed from containers onto general


road


haulage and isn’t always easy to quantify. Barge and short-sea


should also play a bigger role, especially with the US Marine Administration (Marad) M95 programme to develop services from Maine to Florida. Until a few years ago, from 2003 to 2006, there was in fact a barge service from New York to Albany. This ended because of a number of factors including higher than expected handling costs and a mismatch between import and export loads: The environment for it was perhaps not quite right, admits PANYNJ. But this time,


“there are factors that could make a difference, including a shortage of truckers, the fact that we have bigger vessels coming in, and a barge service could be a tool to help us clear inbound loads more quickly.” Portland might be another


destination for a short sea service, though the trade on that leg is much more domestically- orientated than to Albany. While the Port of New York


and New Jersey is nowhere near operating at capacity, dispersing activity to inland and up-coast locations is always useful, in much the same way that Rotterdam has a policy of encouraging smaller nearby ports to open container terminals. There have been few dramatic


changes to shipping services in New York recently. The port had been expecting the P3 merger between CMA CGM, Maersk and MSC but that has now been superseded by the less ambitious M2 vessel-sharing agreement


Port of Charleston gets into the groove


Construction is under way on a new container terminal on the former Charleston navy base that will increase capacity by 50% - currently the only new permitted container terminal under construction on the East or Gulf coast, says the South Carolina Ports Authority (SCPA). Phase I is expected to be


completed in 2019. The $700 million estimated construction costs are funded by the SCPA, with a state-funded $225 million dedicated access road from I-26 onto the new terminal site. The Post-45 Harbor Deepening Project to deepen Charleston harbour to at least 50 feet is currently being studied by the US Army Corps of Engineers. The report is expected in 2015 and construction could be


completed by late 2018. Estimated con- struction cost is $300 million, shared by the state and federal government in a 60- 40 ratio, respectively. The South


Carolina Inland Port, a $50 million SCPA investment, opened in October 2013 to improve the efficiency of international container movements between the Port of Charleston, up-state locations and


neighbouring the states. In


partnership with Norfolk Southern,


project uses


an overnight train service to handle double-stack container trains to and from the port


Canal expansion is complete.


It says


that, as the deepest harbour in South-east today, its proximity to open ocean is an advantage that will only be enhanced with the deepening project. Competition


has


been and is expected to remain reasonably intense in the South


facilities. Like everyone in the industry,


the port authority is watching the


emergence of mega-


alliances. SCPA expects to see bigger ships, rather than more ships, to capture cargo volume growth. East Coast ports,


including


the SCPA, are responding to the big ship trend by deepening their harbours. SCPA currently receives about seven post- panamax ship calls weekly, and expects big ships to call in Charleston more frequently once the Bayonne Bridge in New York is raised and the Panama


Atlantic. For this reason, SCPA sees potential opportunity in some circumstances for broader cooperation between ports. That said, East Coast ports


have seen growth above the market average for US ports, and the SCPA itself has grown above the East Coast average. There


are several strong fundamentals to support that, it says. A natural deep-water harbour, the deepest in the South-east today, can already accommodate big ships. The South-east is also a strong manufacturing region, which drives exports, and is also home to the fastest growing population in the country, which drives imports. The SCPA has aggressively recruited discretionary cargo, which has also led to above-market growth. Exports are a key growth


area for SCPA, and by the end of the decade it expects exports to outpace import volumes. It is also seeing exports rise as a result of foreign companies’ direct investments in South- eastern manufacturing facilities.


between the last two lines, which should have fewer implications for port operations. PANYNJ does not expect the


Panama canal widening – to be unveiled next year – to have a major effect on the size of ship or pattern of trade in New York, but events on the Suez Canal route could have more important effects. More freight from China is coming through Suez. The route from the Far East to the US east coast is shorter than via Panama and it can already handle larger ships. Despite the intense competition along


the whole


eastern seaboard of the US and the worst recession within living memory, the Port of New York and New Jersey in fact enjoyed a record year in 2012 and 2013 was not much worse, despite the not exactly helpful weather towards the end of 2012. And while, in mid-July, it is somewhat early to be talking about full year figures, 2014 looks on course to be a very good year too.


Issue 6 2014 - Freight Business Journal


///US EAST COAST


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