State of the Port Address details lengthy to-do list for PANYNJ

At the recent “State of the Port” event, the 2025 Master Plan detailed current and upcoming port projects that executives forecast will continue the success of the Port Authority of New York and New Jersey (PANYNJ). Along with a far-reaching list of goals for this year, many scheduled projects promise an impressive return on investment for several years to come by focusing on maintaining and improving current industry relationships, as well as making efforts to insure future business success by taking advantage of new alliances and key partnerships.

Labor and Legislation Issues

As the first speaker at the January event, John Nardi, President of the Shipping Association of New York and New Jersey, suggested that a Master Plan for 2025 requires a look at what events took place in 2024.

“For me, the state of the port requires a look back to 2024. Our fiscal year is October 1^st through September 30^th, so if you hear numbers that are a little different than the Port Authority, that's the reason why. From a cargo perspective, the growth was just about 8 percent in 2024, in that period compared to 2023. We had taken a small dip in 2023. Port work hours were up 7.3 percent, and we had a slight improvement of man-hours per lift of little less than 1 percent.”

He continued, “What one cannot see in this result is what I consider significant headwinds that we experienced throughout 2024. In addition to the big one you want to talk about, we had Panama. They had a drought, and a lot of car ships couldn't get through. They stopped pulling the West Coast, so a lot of containerized cars, which changed the market quite a bit; the route to the U.S East Coast via the Suez Canal shut down due to geopolitical tensions. We're coming off a period of inflation that we hadn't seen in nearly 40 years.”

Nardi also pointed out the significance of contract negotiations and recent events that led to a strike in October 2024.

“It started out that we needed to offset years of inflation because they were locked into a six-year contract with the smaller or more traditional increases. We didn't see the 22% inflation back then that we had experienced a few years ago and inflation on top of that. So although there had not been a longshore strike in nearly 50 years, such a strike was a constant threat, resulting in cargo being routed to other gateways; which is understandable, because beginning from back in 2002, I think the shippers have rightfully learned that they can't put all their eggs in one basket and they have to anticipate that there could be some disruption.”

He noted, “Prior to the strike, we did what I think we do really well here in this port, is we met with the stakeholders and worked closely to try and calculate and anticipate all the what-if scenarios, what happened, and we were able to move as much freight off the dock before there were no ships on the dock during the strike. So, it was advised well in advance, and I think the port community did a great job working together to minimize the impact of it.”

Two issues at the core of the strike were those of wages and concerns about automation replacing the labor force. Nardi reported that “a lot of subject matter experts were involved, especially dealing with the automation side of things, who really understand how things work and how they could be altered and how you could get human intervention and still have the benefit of the aspects of the machines.” With this effort in mind, port executives are confident that the new/updated contracts will be amenable to all parties involved well into the near future.

Regarding the issue of labor shortages at PANYNJ, Nardi said, “In 2024, we had relatively few labor shortages and we expect 2025 to be the same. Ensuring the port is fully employed is an ongoing goal to make sure we have enough workers, but even more so to make sure that we don't have an excess of workers. In fact, 2024 was an anomaly. For the first time that I've been dealing with the port, we had an excess of employees who were hired when cargo was booming during COVID.

He continued, “An excess of labor sounds great, except when you consider that new workers would also have to have other jobs to make a living. This is a high-cost area when only receiving minimal work. So then you have the person having to make a decision of which job do they take today? Do they take the job where they feel like they're going to have regular work or do they go to a little short job where it's probably long-term better? So, we're in the process of balancing that, and I think we're in a good spot on that because the volume is now catching up to the people that we have available.”

Nardi added, “Moving on from labor, there is also no shortage of legislation that we deal with. We need to keep the port competitive. Some of the issues we dealt with over the last couple of years, actually last year, were storage licensing fees, heat legislation, non-compete agreements, and the never-ending attack on independent contractors, which is so important to our business. We as the association try to inject ourselves into any issue that benefits our members and the flow of freight to the port. The Shipping Association also continues to work with industry in our local communities, and the last 10 years has made tremendous advances forward.”

Factors Influencing the Future

Also reporting on current and future projects at the Port Authority of New York and New Jersey (PANYNJ) was Port Director, Beth Rooney, who began by listing events that “plagued” the industry in 2024.

“John Nardi started earlier by talking about things that plagued our industry in 2024. I've got a few more additions to the list: the Key Bridge collapse in Baltimore, the Red Sea diversions, and the Panama Canal that John mentioned. All of those things led to some vessel punching that we needed to contend with here, certainly the ILA strike. And then as we came out of that, knowing that we had a little bit of a reprieve, fear, and threat of another potential strike in January. Front-loading of cargo, because of fears over tariffs that would be placed by the new administration. Empty container management, appointment management, long-term times, and road traffic, as John mentioned.”

She continued, “I'm thrilled that I think we can take five of them definitively off the table for 2025. Three we're actively working on, and have been working on, and we'll not stop until we fix the problems. One I believe will be resolved this year, and one is a constant unending effort by the ocean carriers. But if you know anything about our maritime transportation, distribution, and logistics industry, just as you think that there's nothing else that could go wrong, and we've experienced it all, we get hit with something that we never even thought about in our wildest dreams. So, who knows what 2025 is going to bring us.”

Looking to 2024 statistics, Rooney pointed out, “In 2024, we did 8.7 million TEUs, an 11.4 percent increase over 2023. We remained the number one port on the East Coast. We've done over 2 million loaded containers as compared to our next largest competitor. We did slip to number three behind LA and Long Beach again for loaded containers, only just about 142,000 containers less than Long Beach. We could have done it if it wasn't for some of those other challenges that we had.”

Trucks, Trains and Automobiles

When speaking about the importance of truck and rail logistic options, Rooney said, “Our 639,000 plus rail lifts are an increase of 1.7 over 2023. Today, 19 percent of our cargo is moving out by rail. That means that 81 percent continues to move out by truck and will continue to move out by truck. And it just speaks to the ever-importance of the trucking community, the truck drivers because our cargo is low, and our cargo needs to be distributed by truck.”

Rooney reported that PANYNJ launched the Trucker Ambassador program last year, and pointed out that “the Port Authority is heavily focused on customer experience and recognizing that the Port Authority is tunnels, bridges, bus terminals, airports, the Path system. Our customer really is all of you, but it's the truck driver whose day-to-day life is impacted by the things that go on at our facilities. So we had to flex a little in our view of customer experience, but we launched a Trucker Ambassador program late last year in which we're looking for feedback from the trucking community. And in turn for providing that feedback when they provide, I hope, valuable feedback, that then the truckers will earn points and then those points can be redeemed for a Starbucks gift card, for a Pilot gas station gift card or something like that.”

She added, “We have finished the installation of four DC fast chargers at the information center in Port Newark. Those will be available for trucks that are electric. And we know there's only a handful of them in the port now, but they will be available for opportunity charges for trucks as they come in.”

Looking to projects related to trucking logistics, Rooney noted, “We are soon going to be launching a chatbot for the truck service center. And all of the interaction that we have with the truck community, we'll be launching a chatbot so that we can communicate in real time or near real time without having to wait in a queue for one of our service center folks to answer the phone. We're going to finish the appointment system work group and develop recommendations and then hopefully act upon those recommendations. We are going to complete, now that the detour is in place and the Corbin Street grant is down and we have the truck chargers in place, we're going to complete the rehabilitation of the truck information center and restrooms in Port Newark.”

Highlighting the importance of rail options, Rooney said, “But on the good news side, for those customers and stakeholders and those that are helping to route the cargo, we're utilizing today, just 43 percent of our express rail network capacity. So, we've got plenty of room for growth, and we continue to work with our express rail terminal operators with the Class I railroads and with Conrail to make that a strong, viable service opportunity.”

Summing up statistics on the auto business, Rooney reported, “We did over 407,000 autos moving through the port in 2024, an increase of 11%, but that 11% increase was fueled by cargo diverted from the Port of Baltimore. And I think what is notable here is that FAPS [Inc, NY based auto processor] was able to, almost on the day that the bridge came down, flex and be able to begin to accept cargo that would have been going into the Port of Baltimore and continued through Herculean efforts until the Port of Baltimore was reopened in order to handle their auto business. So special thanks to FAPS for stepping up in a big way to do that.”

Cargo and Cruise Numbers Continue to Grow

As PANYNJ cruises into 2025, Rooney noted that, “Over 806 individuals chose to go out of the Cape Liberty Cruise terminal for vacation this year. But there were another million passengers that went out through Brooklyn and Manhattan. So, cruise continues to be a big business in the Port of New York and New Jersey.”

In addition, Rooney pointed out that PANYNJ handles almost 3 million metric tons of bulk cargos (scrap metal, our road salt for melting, edible oils, cement, etc.). This segment of the port’s business experienced a 12 percent drop year over year, due to factors such as a mild winter, which required less road salt, and a decision by the Port Authority to “begin phasing out of scrap metal to make room for more container terminal and container support areas, and to focus on our core businesses predominantly being autos and containers.”

Rooney continued, and detailed statistics that highlight the integral role the Port of New York and New Jersey plays among top carriers and commodities.

“A few fun facts. Nearly 70% of the containerized cargo that's coming into the Port of New York and New Jersey today is coming in on a ship that could not fit under the Bayonne Bridge six years ago. That's huge, that we're all part and parcel of making that happen. In addition, 54 individual services called the Port of New York and New Jersey this year, with 47 of them regularly calling. Of those 47 services, 44 are weekly services. 73 percent of them are making their first port of call right here in New York and New Jersey, and 13% of them are making the last call in New York, New Jersey.”

She added, “Our largest import partners, China, India, Vietnam, Italy, South Korea. China decreasing, increasing, Vietnam, increasing, South Korea, increasing. With the reopening hopefully as the situation in the Red Sea and the Suez Canal begins to resolve itself with a ceasefire, we're cautiously optimistic that we'll be able to begin those services again through the Suez Canal in short order, which makes us a more competitive option for manufacturing that is taking place in Southeast Asia. Our top commodities are furniture, plastics, electronics, beverages, wines and spirits, paper products, toys, and games.”

“When you look at where we wound up in 2024, we are 5 percent higher in 2024 than what our forecast in 2019 suggested that we were going to be. That's good news for all of us, but we need to ensure that our investments, our infrastructure, our operations, our workforce, and our policies and procedures all keep up with this,” Rooney said.

Additional projects and goals related to the 2025 Master Plan for PANYNJ include:

• Continued progress of the wharf rehabilitation program, which began last year, with the next phase to include a preliminary engineering and design agreement between the Army Corps and the Port Authority for study and analysis to support the 55-foot harbor deepening and channel improvement project.
• Eight new ship-to-shore cranes, massive ship-to-shore cranes that were delivered in 2024 to the port.
• New electric terminal tractors, new rubber-tired gantry cranes, all providing additional capacity for cargo handling in the terminals.
• New berth in Fort Liberty Bayonne, which was completed at the end of 2024. That berth will be put into service in March.

Strategic Goals for the 2025 Port Master Plan

According to Rooney, the Port Department has identified strategic goals for the next five years, which are expected to take the Port “almost through the first phase or two-thirds of the way through the first phase of our Port Master Plan.”

As such, the Port is focused on:

• Optimizing efficiency of cargo movement, staying ahead of the demand, delivering world-class operational excellence, and providing a customer-driven experience. Maximizing land use and property utilization, phasing out of some of those legacy uses that are not germane to the future of a vibrant gateway port. Relocating users in order to consolidate and create our zones that are focused on the container business, the auto business, and the bulk business. Also identifying viable uses for underutilized partials that we have around the port properties.
• Minimizing our environmental impact on the port. Part of doing that is community engagement and making sure that our local neighbors are fully involved and fully engaged and fully participatory in the process as what goes on in the port impacts them and impacts their families and loved ones and their health and well-being. We'll continue to support the Clean Truck program, we'll continue to support the Clean Vessel Incentive Program, and use the Marine Terminal Tariff to advance phase-outs of older cargo hamming equipment and older diesel drayage trucks.
• Improving our freight rail utilization and fluidity. Only 19 percent of our cargo is currently moving out by rail. We need to do better, we want to do better. That's part of what we need to do in order to relieve some of the truck traffic on the gates and on the roads. In order to do that, we need the Class I railroads and we'll continue to engage with them on this to provide more origins and destinations with regular service. In 2025, we will also be focusing on finally advancing the southbound connector.
• Ensuring resiliency within the port environments. That is associated with our infrastructure, it's putting best management practices in place, it's putting flood protections in place, it's putting operational measures in place, and continuing to train the staff, our colleagues throughout the community, and exercising all of those.
• Developing the workforce of the future. Whether it's by the fuel that equipment or vessels or other things are burning, or whether it's the use of technology within warehouses and distribution centers. Our needs within the industry are evolving and we need to make sure that we have a workforce that is capable of staying up with those needs.
• Creating the connections between those who can provide the training and academic opportunities for those that are underemployed or perhaps second-chance citizens looking for an opportunity to work in our industry. We need to develop and deliver those training programs through career awareness events and job fairs.
• Developing the capital infrastructure and capacity. We're focused largely on the waterways, the road, and the rail on the landside. Specifically in 2025, we will be completing some critical lease negotiations that have been underway for quite some time, which will pave the way for more investments by those operators in capacity, fluidity, efficiency, and sustainability.

As an infrastructure goal, Rooney noted, “The Port Newark Container Terminal will be expanding the size of the terminal, adding 70 acres beginning next year, increasing their yard capacity by 35%, and doubling their rail capacity. More terminals will be doing the same things, once they have the ability as we finish up some of these lease negotiations. ABM has four new ship-to-shore cranes that will go into service by the end of the first quarter. We all know what's happening with a number of the alliances. The M&I Service is starting up and the 2M is going to be resolved. So, there's a lot of work that APN and PNCT are doing in order to accommodate those things.”

She continued, “So, there's always a lot of great things going on in the port. I know that we're up for any challenges that 2025 throws our way. I pray that it's nothing more than what we already know about. But whatever comes our way, I'm confident that with your commitment, which each and every one of you have given to the Port of New York and New Jersey over the course of the years, that we will get through. And we will continue to work with each other to service our customers, and ultimately keep commerce moving. I'm excited for what the year is going to have before us. We're going to have six years of labor harmony, and we're going to move forward. So, exciting days are ahead.”