The Port of New York and New Jersey, the third-largest U.S. container port and a contender for the top slot when the Panama Canal opens its new locks in 2105, could lose a significant amount of its terminal capacity if the port authority fails to get its act together, and fast.
The New York Container Terminal on Staten Island was put at a significant competitive disadvantage to the four container terminals in New Jersey on Sept. 1, 2011, when the port authority raised tolls on all the bridges and tunnels leading into New York. Port truckers now have to pay $200 in tolls for a round trip with a chassis across the Goethals Bridge from New Jersey to Staten Island to pick up a loaded container at NYCT, deliver it to a warehouse in New Jersey and to dray the empty container back to NYCT. That’s up from $80 per round trip before the toll hike. If the truckers don’t have E-ZPass, they have to pay $20 more.
That’s a 150 percent increase and amounts to almost 10 percent of the average $2,300 ocean freight rate from Hong Kong to New York. What ocean container line or retail importer in their right mind is going to add almost 10 percent to their freight bill from China?
NYCT already has lost more than half its annual volume to the four New Jersey terminals. Some Grand Alliance carriers and big importers such as Home Depot no longer steer shipments to the port’s most productive terminal because of the tolls. NYCT stands to lose still more business when individual carrier contracts with the terminal come up for renewal over the next two years. It’s death by attrition.
“If this toll increase is not zeroed out, this terminal will not survive,” NYCT CEO Jim Devine said last year when the increase was announced. “It’s that simple. This increase will kill it, unequivocally.”
Devine has gone silent since then because the port authority has been trying to find a solution. It has already cut tolls on Staten Island residents who commute to New Jersey to $4.75 from $12 during peak hours. But it has been studying the truck toll issue for a year now and hasn’t come up with a toll cut.
Meanwhile, the U.S. Army Corps of Engineers is spending millions of dollars to dredge the Kill van Kull channel leading to NYCT, and the port authority has spent millions of dollars in its own right to extend ExpressRail to NYCT. What good is the investment of all those millions of dollars if the port authority can’t provide a significant break in the tolls that are killing the terminal?
It’s high time for the port authority to provide a solution for truckers along the lines they have given to Staten Island commuters. If it doesn’t fix the issue it has created, the city stands to lose 550 jobs at the terminals, and the region will lose millions in tax revenue.
Contact Peter T. Leach at email@example.com.