Port NY-NJ looks at staging space to boost rail fluidity

Port NY-NJ looks at staging space to boost rail fluidity

Port of New York and New Jersey.

Improving rail fluidity is key for the top East Coast port to protect and expand its discretionary volume — freight that moves out of the region toward as far as Chicago. (Above: The Port of New York and New Jersey. ) Photo credit: Shutterstock.com.

The Port of New York and New Jersey is studying how to address what stakeholders call a “critical” future need for additional staging capacity on which to assemble trains in the port’s four rail terminals in an effort to avoid congestion due to a lack of empty railcars as cargo volumes surge.

Improving rail fluidity is key for the top East Coast port to protect and expand its discretionary volume, or freight that moves out of the region toward as far as Chicago. A committee of the Council on Port Performance, a group of port stakeholders, is evaluating how to handle the need for longer trains and what yards or space are available to create more space in which to store empty cars and create the trains, said officials at the Port Authority of New York and New Jersey.

The need for staging space stems in part from the two-to-one imbalance of rail imports over exports. That leaves the port short of empty cars on which to send imports to their destination unless the rail lines send empty cars in advance, which then need space to be stored until they are needed. Council minutes from July describe the staging space as a “critical need” and add that the port authority has funds available to study the issue.

“We could benefit from more storage track to help make the building of trains more efficient,” said Beth Rooney, assistant director of the port division of the Port Authority of New York and New Jersey. “We will be conducting a study of where and how much we should build to support.”

Proactive regarding potential problem

Port officials say the staging issue is not a major problem at present but could be in the future as the port prepares for what it expects to be a dramatic ramp up in cargo handled by the port, especially in discretionary cargo — imports that are not destined for the local population and are mostly taken out of the port by rail. Port officials say their goal is to have 20 percent of port volume carried by rail in the future. A fourth rail terminal that will bring rail to a fifth marine terminal, GCT Bayonne, is under construction and expected to be completed by the end of the year. 

The port has seen a “marked surge” in discretionary cargo over the last year, said Matt Masters, general manager for the port rail program. That has increased the number of lifts, for example, at the Millennium ExpressRail, which serves APM Terminals and Maher Terminals, from 7,000 lifts a week to 9,000, he said.

In a slide showed at the Port Industry Day on Sept. 24, Sam Ruda, assistant port director at the Port Authority of New York and New Jersey, forecast demand for port services — the port handled about 6.7 million loaded and unloaded TEU in 2017 – growing to 17 million in 2046. The slide suggested that discretionary cargo, which accounts for a few hundred thousand TEU at present, would grow much faster than nondiscretionary cargo, and by 2046 would account for about 5 million, or nearly 30 percent of call cargo.

The port conducted 369,265 rail lifts in the first seven months of 2018, a 14 percent increase over the same period in 2017. Port officials say rail volumes in recent years grew on average by about 5 percent a year, and the rail share of the port’s overall cargo has increased from about 13 percent a decade ago to 15 percent at present. That compares with 18 percent in Savannah, 35 percent in Virginia, and 21 percent in Charleston.

Cargo volumes through the port rose by 6.4 percent — to 2.87 million loaded TEU — in the first seven months of the year, over the same period in 2017, according to PIERS, a sister product of JOC.com. Imports increased by 6.5 percent, and exports increased by 6.2 percent, the figures show. Port officials are planning for an average 4 percent a year increase in the foreseeable future.

Two incidents, although not related directly to the staging issue, show the impact of pressure on the port’s rail system. It experienced higher-than-normal dwell times on rail-bound import cargo after bad weather triggered delays in the Midwest, resulting in rail car shortages and reduced train lengths. Most affected was the Millennium ExpressRail. In response to the problem, the port authority sent a missive to port users saying that it was working with CSX Transportation and Norfolk Southern Railway to “ensure that adequate quantities of empty rail equipment are routed to ExpressRail terminals in a timely fashion to clear the rail backlog as quickly as possible.”

In late spring, the Millenium terminal also saw elevated levels of congestion triggered in part by the additional workload of cargo drayed in from the GCT New York terminal, to be sent out by rail, authority officials said. That was resolved in part by adding rail service to the terminal, they said.

The double-stack train factor

Ports such as New York-New Jersey typically need staging space to store empty double-stack trains due to the inconsistency of demand and supply, which can be exacerbated by vessels or trains going off schedule, said Kenneth Spahn, regional director for ports and intermodal at Dewberry Engineering.

“Cargo comes in chunks a lot, as opposed to being distributed evenly” said Spahn. “There are periods where you have an influx of import containers. So, more empty railcars are needed than what you are getting from the rail export containers coming off the trains and getting loaded onto the ships.”

Masters said the port has lately handled the import-export imbalance amid rising volumes in part by working closely with the terminals and Conrail, CSX Transportation, and NS to prepare two days ahead, and to ensure a flow of empty cars.

Aside from assessing the need for staging areas, the study will also look for available rail yards and car storage space in the area, he said. The study is expected to be completed in the late winter or early spring of 2019.

Justin P. Weir, chief operating officer for APM Terminals, welcomed the study, saying that a shortage of container yard space at rail yards and terminals can have a knock-on effect on marine terminals. That was the case when severe weather in the Midwest reduced “our ability to clear containers from the terminals.”

“The minute the rail gets backed up, the cargo spills back into our terminal as the rail yards themselves just simply do not have enough space,” he said. “Once that happens, rail imports start taking up valuable space in the terminal that would normally have been saved for vessel exports, imports, empties, etc.

“We discuss railcar supply as a key metric in our daily meetings,” he said. “We constantly work the phones and emails daily to communicate with all rail providers to ensure we would be receiving car supply each day so we could continue to load and unload and keep the operation moving.”

Contact Hugh R. Morley at hugh.morley@ihsmarkit.com and follow him on Twitter: @HughRMorley1.