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NY-NJ handles mega-ships post-Bayonne Bridge lift in stride

14,000-TEU CMA CGM, at Bayonne Bridge.

Despite concerns that the intense bursts of cargo exchange triggered by mega-ships calls could stress port resources and systems, the port has seen no notable increase in congestion, terminal-gate truck backups, or chassis access problems after the raising of the Bayonne Bridge. (Above: In Sept. 2017 the first 14,000-TEU container ship — CMA CGM T. Roosevelt — passed under the raised Bayonne Bridge.) Photo credit: Hugh R. Morley.

Cargo volumes through the Port of New York and New Jersey have increased by about 8 percent, vessel sizes have grown, and the number of rail lifts has risen by 18 percent in the year since the elevated Bayonne Bridge opened. Yet the darkest predictions of disruption and delays due to a surge of mega-ships into the port have not materialized.

Despite concerns that the intense bursts of cargo exchange triggered by mega-ship calls could stress port resources and systems, the port has seen no notable rise in congestion, terminal-gate truck backups, or chassis access problems in the wake of the opening, say port truckers, shippers, the Port Authority of New York and New Jersey, and the New York Shipping Association (NYSA).

Number of mega-ships calling at NY-NJ nearly doubles

The $1.6 billion bridge elevation, which opened June 8, 2017, raised the bridge from 151 feet to 215 feet, allowing ships of more than 9,500 TEU for the first time to reach Maher Terminals, Port Newark Container Terminal (PNCT), Global Container Terminals (GCT) New York, and APM Terminals. Prior to the bridge raising, ships of that size could reach only GCT Bayonne.

Since the elevation, amid healthy US and global economies and strong cargo volume numbers nationwide, the port has seen a near doubling in the number of ships sized 10,000 TEU or more calling at the port. And the port’s share of East Coast-loaded cargo, on the decline since 2010, has ticked up, although the port’s share of Asian loaded cargo imported to the East Coast has continued to slip.

The first year’s experience prompted an upbeat assessment from port officials. Molly Campbell, the port authority’s port director called it “a good story, and it’s good for the port,” saying the port has seen a “continuing cascade of the larger ships.” Truckers agree that mega-vessel arrivals appear to have triggered few problems, although some question whether the volume increase has yet to really test the port.

“The real issue is we have not seen any major impact,” said Jeff Bader, president of the Association of Bi-State Motor Carriers, who said that although cargo volumes are clearly up and his members are busy, the big ships arriving do not appear to have been loaded to capacity.

Port authority figures show that although the size of vessels has increased — the largest to date are 14,414-TEU ships on a monthly CMA CGM  rotation from China — the volume of cargo discharged and loaded from the biggest ships has not so far changed much from the typical volume of an 8,000-TEU or 9,000-TEU ship.

In 2017, vessels sized 10,000 TEU to 11,000 TEU loaded or unloaded between 45 to 54 percent of their capacity, or between 4,500 TEU and 5,940 TEU, according to port authority figures. In 2018, eight of the top 10 vessel exchanges were on vessels of 13,000 TEU, which handled cargo equal to 46 percent of the capacity, or about 6,000 TEU, port figures show. All of those volumes are below the average figure for an 8,000-TEU to 9,000-TEU ship at the port, which in 2017 loaded or unloaded 75 percent of its capacity, or between 6,000 TEU to 6,750 TEU, port figures show.

No delays, so far, but peak season ‘will of course be very telling’

Don Pisano — president of American Coffee Corp., which imports about 2,000 TEU per year — who has in the past raised concerns about the port’s efficiency, said he has seen little impact from the bridge raising.

“Of course, the port's volume has increased overall,” he said. “But I have not heard of any significant increase in delays at the terminals. Just the usual daily suffering,” he added, referring to sporadic congestion, and some excessive wait times at terminal gates, depending on the terminal.

The director of global logistics at a major retailer said the shipper has overall seen “positive impacts” from the bridge raising, including “quite significant year-over-year savings” on shipping rates among carriers using bigger ships.

“Overall, our local drayage remains fluid, while gate times vary by terminal and by week,” said the shipper, adding that the retailer had seen “operational delays” on rail loads to the Ohio Valley, although it has not been clear whether that relates to the arrival of bigger ships or not.

“Peak season will of course be very telling, and [will] answer many of the questions,” about the port’s efficiency, he said.

Preparing for the mega-ship era, the port authority invested heavily on port upgrades, spending $4.7 billion on dredging, rail access, and other projects, including the bridge. Port terminal operators have spent about $2 billion on upgrades, including the renovations underway at APM and PNCT, each of which is installing new gate systems, cranes, and other equipment. Both expect to create appointment systems to smooth truck flow soon. GCT Bayonne, at the start of 2017, introduced the port’s first appointment system, which has helped produce turn times that are 45 percent lower during the reservation period than when it is not in effect.

John Nardi, NYSA’s president, said the port’s ability to handle larger ships reflects the extensive planning that led up to the bridge raising, which included the creation of a stakeholder committee, the Council on Port Performance, in 2013 to handle the kind of difficulties the port faced at the time, such as tight chassis supplies and labor shortages.

“Although there a couple of facilities which are still in the midst of construction and implementing new systems, which occasionally results in days where there are delays at those facilities, the port is performing extremely well,” Nardi said.

Panama Canal expansion enables more mega-ships to call on East Coast

Ports along the East Coast closely watched the bridge construction believing that, with the height restriction removed, more large vessels would come through the expanded Panama Canal — which opened in June 2016 — and to ports along the coast, not just New York-New Jersey.

That prospect raised questions about how the terminals would adapt to the short bursts of intense cargo loading and unloading that come with big ships, including the port drayage community’s ability to get containers in and out of the port, and how the big ships should best navigate the narrow channel into the port.

Steve Schulein, vice president of drayage and industry relations for National Retail Systems, in North Bergen, New Jersey, said those problems have yet to emerge.

“I haven’t seen a dramatic hit on the port with these bigger ships coming in yet,” he said. “So far, overall, it’s done a very good job.”

Sam Ruda, assistant port director at the port authority, said that the bridge raising — by giving mega-ships access to more terminals — may have diffused the potential stress that bigger ships could place on port resources.

“There was always this concern, not just in our port, but the global industry, that it would bring ports and terminals down to its knees,” he said. “But for us, what the bridge did, it also created better distribution of these vessels across Maher, APM, PNCT, and Global [GCT]. So actually, there is a certain efficiency associated with that.”

The bridge raising clearly led to an increase in the number of visiting mega-vessels. The number of 10,000-TEU or more ships entering the port increased from between five and eight a month immediately after the opening of the elevated bridge to 13 of that size in March. An average of 10 ships of 10,000 TEU or more called at the port in the first quarter of 2018 and a total of 93 ships of that size called at the port in the first 10 months after the raised bridge opened, compared with 57 in the same period a year earlier, port authority figures show.

+10,000-TEU ships help market share increases

As a result, ships able to carry 10,000 TEU or more accounted for 4.9 percent of all ships stopping at the port — and 10 percent of all cargo — in the 10 months through April, compared with 2.9 percent in the same period a year earlier, port authority figures show.

The increase stemmed in part from a new route, CMA CGM’s South Atlantic Express route, from China via the Panama Canal, which began sailing in the autumn. Four existing services increased the size of the ships on the loops to above 10,000 TEU, and one increased it to 9,600 TEU, the port authority said.

PNCT said the largest volume of cargo it handled from one ship in the last year was 10,679 TEU, of which imports accounted for 65 percent and the remaining 35 percent was empty load back.

Chris Garbarino, vice president of operations at PNCT, said the operation — for which the terminal had about a week’s warning of the size of the import discharge — went off without a hitch, adding that “all the large terminals” at the port had experienced “similar lift volumes in a single call.”

Garbarino said that the number of vessels arriving at the terminal has not changed much with the raising of the bridge. “The main impact of the bridge raising was felt in the trade lanes that upgraded to larger ships,” he said. “In those instances, we saw vessel TEU discharged/loaded per call increase almost 10 percent, indicative of the larger vessel size driving economies of scale.”

APM Terminals said that its “largest service calls generally would average between 6,000 TEU to 6,500 TEU.”

Accompanying the increase in ship sizes has been a rise in cargo volumes. The port handled 4.09 million loaded TEU from June 2017 to March 2018, a 7.9 percent increase on the same period a year before, according to PIERS, a JOC.com sister product. Imports, which accounted for about 71 percent of the cargo, rose by 7.6 percent and exports rose by 8.5 percent.

The increase in the total volume of loaded cargo through the port was well above the 0.5 percent increase in the same nine-month period in 2016 and 2017, the figures show. And it also outpaced the 6 percent increase in loaded cargo handled by all East Coast ports during the period. Loaded cargo volumes through US ports increased by 3.7 percent in the same period.

The New York-New Jersey increase was accompanied by an 18 percent increase in rail cargo volumes in the first quarter of 2018 over the quarter in 2017, a sector that the port sees as key to boosting future cargo volumes, mainly through cargo sent to and from the Midwest.

East Coast loaded container market

The rise in cargo volume also enhanced the port’s share of the East Coast loaded container market, which has declined since it peaked at 33.57 percent in 2010. The port had 29.12 percent of the East Coast loaded container market in the first quarter of 2018, up from 27.94 percent of the market in the same period in 2017, and 29.02 percent in 2016. However, the port’s share of East Coast loaded imports from Asia fell in the first quarter of 2018 to 34.6 percent, from 35.2 percent in the same period in 2017, and 36.1 percent in the period in 2016.

Port officials are looking for 4 percent a year cargo growth in the future, and are focused on boosting discretionary cargo to help get there. They believe that the effort will be strengthened as more ocean carriers that make New York-New Jersey first call. Of the 19 alliance routes that stop at the port at present, 15 make it their first call, the authority said.

However, one thing that hasn’t happened so far with the bridge raising is the port’s expectation that the increase in mega-ships arriving would also result in the ocean carriers reducing the number of calls they made farther down the coast. That way, ocean carriers would avoid the costs of making extra port stops — pilots, tug boats, fuel for idle time, and others — and better exploit the economies of scale inherent in large ships, the authority said.

“We had thought that as the Bayonne Bridge went up, the milk run would decrease,” Ruda said. “So that you would hit New York and maybe a couple of the ports in the South, and then you would go back to Asia. What we are seeing is about the same number of port calls. So it’s New York, and then two to three ports, and then they go back out.”

Contact Hugh R. Morley at hugh.morley@ihsmarkit.com and follow him on Twitter: @HughRMorley_JOC.

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