Jim Devine hit the roof when the Port Authority of New York and New Jersey raised the truck and auto tolls on its bridges and tunnels last September. As CEO of Global Container Terminal, he feared the increase would send container volume at its New York Container Terminal plummeting and even threaten the future of the Staten Island facility.
The peak-hour toll to cross the Goethals Bridge connecting New Jersey and Staten Island went from $40 to $70 for a typical five-axle port drayage truck, and will increase another $10 in 2014. Drivers are charged another $15 if they pay cash instead of using an E-ZPass; this, too, will increase $10 in 2014. Tolls are charged only on trucks crossing into New York.
“If this toll increase is not zeroed out, this terminal will not survive,” Devine said when the increase was announced. “It’s that simple. This increase will kill it, unequivocally.”
In the six months since then, the increased truck charges have taken a toll, so to speak, and importers that ship through NYCT are looking at using other terminals in the harbor.
“I can’t quantify the loss, but in my discussions with most of my customers, whom we are surcharging a substantial amount on port authority crossing, they are going to do what they can to shy away from NYCT,” said Jeff Bader, CEO of Golden Carriers, a New Jersey motor carrier, and president of the Association of Bi-State Motor Carriers. “They are going to look for alternatives, whether that means not importing through the Port of New York. We’re taking it day by day.”
The toll increase on trucks has cost NYCT some business. “This is only the first tranche of the toll increases. We’ve already lost volume as a result of the toll increases,” Devine said. The toll increase is the likely reason Hamburg Sud plans to switch its Atlantic Express service calls from NYCT to Global Terminal in Jersey City, N.J., on March 12.
Despite his mounting concern, Devine is tempering his remarks because he still hopes for a solution. “I feel relatively comfortable that New York City, New York state and the port authority recognize that NYCT is an important part of the harbor and that its viability needs to be protected, so I am confident that there’s going to be a program put in place that fixes the toll, one way or another.”
Aware of the problem, the port authority is considering a solution. “We’re working with the terminal to see if the tolls are a disadvantage for trucks going to the terminal and how much it is,” said Rick Larrabee, port commerce director for the port authority. “If there is a real disadvantage, we’ll see how much it is, and see if there is something we can do to mitigate that.”
In response to protests and political pressure, the agency already has moved to reduce by 50 percent the E-ZPass tolls commuters pay to cross the Goethals and Bayonne bridges and the Outerbridge Crossing. This doesn’t sit well with importers using NYCT.
“I had a discussion with one big importer who was unhappy that the governors of New York and New Jersey have addressed the toll issue for Staten Island residents, but have not done anything to help the trucking industry,” Bader said.
The toll on drayage trucks crossing the Goethals Bridge to NYCT is casting doubt on the terminal’s long-planned construction of Berth 4, a project to enable the handling of several post-Panamax ships at a time.
APL will move its calls to Maher Terminals in New Jersey when the carrier’s contract with NYCT expires in July. “They questioned whether we would succeed in growing the facility,” Devine said. “The Berth 4 project is still alive, albeit on hold right now until we get the toll issue resolved.”
Resolution would not only clear the way for a fourth berth; it would also open up the possibility of a complex of retail distribution centers that could be constructed on 500 acres of open land just outside the entrance to NYCT.
“I see that as a revisit of how Savannah became so successful,” Devine said. Real estate developers estimate they could build 3 million to 4 million square feet of retail distribution centers and warehouses that would generate new revenue from trucks using the Goethals Bridge to deliver consumer goods to stores in New Jersey. “By solving the bridge tolls to some degree, the port authority still makes out very well,” Devine said. “But, in return, it has to make sure we are competitive.”