Annual Review & Outlook 2013: Port Authority of New York and New Jersey

Richard M. LarrabeeOn Monday Oct. 29, the Port of New York and New Jersey was closed in anticipation of Hurricane Sandy’s winds and the 13-foot storm surge it brought with it. The port was inundated by saltwater and lashed by heavy storm winds, causing extensive damage to all its facilities. With an extraordinary effort that we are proud of, management and labor worked around the clock to reopen terminal berths to incoming vessels on Sunday, Nov. 4, and their gates to trucks on the following day.

However, it wasn’t until after Thanksgiving that the backlog of containers diverted to other ports was cleared and delivered to its intended destinations. It took four weeks to right the havoc that Sandy wrought on the supply chain, because there was not sufficient capacity in the existing rail, truck and barge arteries to accommodate the relatively minor volume of a one-week disruption in the supply chain.

Many ocean carriers declared force majeure, and, according to press reports, it cost some beneficial cargo owners $750 or more in additional transportation charges to reroute their diverted containers.

One of the lessons we learned from Sandy is that the simplest solution to bring the maritime supply chain back into equilibrium in a natural disaster or emergency is to allow ocean carriers to exercise cabotage for delivering diverted cargo to its originally intended port.

We are all aware of the regulatory implications of this, but it is incumbent upon our industry and the federal government to find a better solution to that which was exercised in the aftermath of Sandy. There is no escape from the fact that we will continue to face natural, and possibly man-made disasters, that will stress the maritime transportation system.

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