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The Port Authority of New York and New Jersey: Global Change, Regional Gains and Local Pains

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Title: The Port Authority of New York and New Jersey: Global Change, Regional Gains and Local Pains


1
The Port Authority of New York and New
JerseyGlobal Change, Regional Gains and Local
Pains
  • Jean-Paul Rodrigue
  • Dept. of Economics Geography
  • Hofstra University
  • Hempstead, New York, USA
  • Jean-paul.Rodrigue_at_hofstra.edu

Paper Available at http//people.hofstra.edu/facu
lty/Jean-paul_Rodrigue/
2
Outline
  • 1. Globalization and the Challenge of Port
    Governance
  • 2. The American Context
  • 3. New York and its Port Authority
  • 4. Challenges to Port Development

3
Globalization and the Challenge of Port Governance
  • Globalization and port terminals
  • Well surveyed issue.
  • Competitive pressures.
  • Integration maritime / inland freight
    distribution systems.
  • Technical and technological changes.
  • Global change, regional gains and local pains
  • How ports respond and adjust to these externally
    driven changes is much less well understood.
  • Globalization has been linked with the rise of
    neoliberal thinking and associated post-Fordist
    policies.
  • Driving force for port privatization, and more
    widely for managements to focus on ports
    essential core business.

4
Globalization and the Challenge of Port Governance
  • The Port Authority of New York and New Jersey
    (PANYNJ)
  • Challenge to the neo-liberal doctrine.
  • Remains firmly in public control.
  • Extend well beyond the conventional governance
    model
  • Focused narrowly on the management of port land
    use, support for terminal operators, and traffic
    regulation activities such as safety.
  • Responsible for a wide array of infrastructures
  • Office space, bridges and tunnels, industrial
    development zones, waterfront developments,
    airports, transit systems and port terminals.
  • Diagonally integrated
  • No other port authority around in the world
    manages such a diversified portfolio of
    activities, infrastructures and terminals.
  • One of the largest public agencies in the United
    States
  • Serves a region of more than 20 million persons
    and 600,000 businesses.
  • Ultimate in the survival of Fordist governance
    (state within a state).

5
Globalization and the Challenge of Port Governance
  • Issue
  • Publicly owned ports are unable to respond
    effectively to the new competitive pressures of
    globalization?
  • Adherence to public agency port governance is
    outmoded and disadvantageous?
  • How strong is the evidence that continued public
    ownership, and the demands of an extremely
    diverse portfolio of interests, have dissipated
    the PANYNJs attention and consequently worked to
    the detriment of what should be its core
    business, the port?

6
The American Context
  • Heavy tendencies
  • 22 of the global GDP.
  • Systematic negative trade balance (484 billion
    in 2002).
  • Growth of national consumption.
  • Appreciation of the value of the US dollar
    (1990s) making foreign products cheaper.
  • Shift of labor-intensive manufacturing activities
    outside the United States.
  • That impacted on maritime transportation
  • Sizeable growth of maritime traffic.
  • A shift in its direction (dominantly inbound).
  • Variations by maritime façade.

7
Value and Tonnage of Foreign Cargo Handled by
Maritime Facade, United States, 1999 (in dollars
and short tons)
8
Tonnage of Cargo Handled by the Top 15 American
Ports, 2001 (in million short tons)
9
New York and its Port Authority
  • Emergence
  • Erie Canal (1825) expanded the ports hinterland.
  • By 1850, the dominant seaport of the Eastern
    Seaboard.
  • Emergence as a rail hub in the late 19th century.
  • Jurisdictional conflicts
  • New York harbor and the lower Hudson River are
    the boundary between the states of New York and
    New Jersey.
  • Conflicts concerning the usage and jurisdiction
    of harbor facilities
  • Most of the rail lines ended on the New Jersey.
  • Most ocean shipping was calling at Manhattan and
    Brooklyn.
  • Freight had to be transferred on barges across
    the Hudson, exacerbating delays and congestion in
    the harbor.
  • Freight rates ruling of 1917 by ICC.
  • PANYNJ founded in 1921.

10
New York and its Port Authority
  • Mandate
  • Very broad governance mandate.
  • Jurisdiction on all interstate movements.
  • Undertake any project concerning any transport
    mode as long as it would promote commerce, trade
    and public good.
  • Self financed.
  • Can issue bonds, charge user fees and collect
    rent.

11
Development Phases of the PANYNJ
12
Financial Profile of the New York New Jersey
Port Authority, 2002
13
Challenges to Port Development
  • Signs of failure
  • From the largest container port in the world in
    the 1970s to a decline of traffic in the 1980s.
  • Local factors
  • Inadequate intermodal rail access.
  • High labor costs.
  • Regional restructuration
  • Deindustrialization.
  • Globalization.
  • Readjustment
  • Port dynamism had become increasingly dependent
    on the demands of the regional economy.
  • Spurred by the globally-linked functions of New
    York.
  • Expanding regional consumption
  • 20 million (metropolitan area) 80 million
    (within 24 hours).

14
Cargo Handled by the Port of New York, 1991-2002
(metric tons)
15
Motor Vehicles Handled by the Port of New York,
1991-2002
16
Main Container Ports of the North Atlantic
Façade, 1985-2001 (TEUs)
17
Challenges to Port Development
  • Shift in port geography
  • From
  • General cargo wharves of Manhattan, Brooklyn,
    Hoboken and Jersey City.
  • To
  • Specialized and more spacious locations in New
    Jersey and Staten Island.
  • Port growth was not strangled by inadequate
    facilities.
  • Five dedicated container facilities
  • The Port Elizabeth, Port Newark, Howland Hook,
    Red Hook and Global Marine terminals.
  • Operating at about 75 of capacity.

18
Distribution of General Cargo Operations, Port of
New York, 1959, 1987 and 2000
19
Container Traffic Handled by the Port of New
York, 1991-2002
20
Challenges to Port Development
  • Infrastructure development
  • Container traffic to double to 6 million TEUs by
    2015.
  • The PANYNJ committed in 2000 1.8 billion for
    port redevelopment (500 million from the
    private sector)
  • Added terminal capacity.
  • Channel deepening.
  • Improved access to inland transportation.
  • Added terminal capacity
  • Howland Hook
  • Reopened in 1996.
  • Extending the operational capacity by about
    500,000 TEUs per year.
  • Addition of a 124-acre (50 ha) site to increase
    freight-handling and warehouse space.
  • Doubled capacity (to1 million TEU per year) by
    2006.
  • Upgrading rail connections and on-dock rail
    services.
  • Political equalizer in the distribution of port
    activities.

21
Challenges to Port Development
  • Port Elizabeth
  • Handles about 60 per cent of containerized
    traffic.
  • Offers the only double-stack rail link within the
    PANYNJ, and is thus a high-priority investment.
  • Expanded terminal and rail-to-ships capacity
    (2004).
  • Maersk-Sealand, the worlds largest container
    shipper, is mainly based at Port Elizabeth.
  • Decision in 1999 to maintain New York as its East
    Coast hub.
  • Partly reflected the perception that the port is
    now cost-competitive.
  • Acknowledged Port Elizabeths continuing growth
    potential.

22
Challenges to Port Development
  • Channel deepening
  • World-wide driver.
  • Global container fleet is upgraded with larger
    ships.
  • Challenge of accommodating deeper vessel drafts.
  • Ability to keep and enhance containerized
    traffic.
  • Clearance of 40 feet (12 meters) in the late
    1990s.
  • Projects (1.8 billion)
  • 1999 Dredging the Kill Van Kull to 45 feet
    (completed in 2003).
  • 2001 Expand the whole harbor access channels to
    50 feet (2009).
  • 2001 41-45 feet in the approach to the Howland
    Hook terminal.

23
Channel Depth at Selected North American Ports,
1998 (in feet)
24
Intermodal Facilities and Navigation Channels of
the Port of New York, 2003
Albers Equal-Area Conic Projection
East River
40
45
Hudson River
1- Port Newark 2- Port Elizabeth 3- Global Marine
43
Newark Bay Channel
40
New Jersey Intermodal Corridor
Red Hook
40
1
South Brooklyn
3
Upper Bay Channel
2
45
Brooklyn
45
37
Kill Van Kull Channel
Howland Hook
New Jersey
45
37
Arthur Kill Channel
The Narrows
Staten Island
Navigation Channel
Ambrose Channel
45
45
30
Control Depth (feet)
Main Ship Channel
N
Intermodal Terminal
37
Arthur Kill Channel
37
Container Port (proposed)
Raritan Bay Channel
Major Highway
Proposed rail tunnel
25
Challenges to Port Development
  • Improved access to inland transportation
  • High congestion and transportation costs.
  • 85 of the containers handled are transited by
    trucks (15,000 trucks per day).
  • ExpressRail terminal (Port Elizabeth)
  • Offers direct doublestaking ship-to-rail and
    rail-to-ship transshipment capabilities.
  • Being expanded (2003).
  • Rails share of intermodal movements will climb
    to 25-30 of transshipped containers by 2010.

26
Expressrail Lifts, 1991-2002
27
Challenges to Port Development
  • Port Inland Distribution Network (PIDN)
  • Initiated in 2003.
  • Goals
  • Relieve road congestion in the metropolitan area.
  • Reduce distribution costs.
  • Expand port throughput.
  • Increase the efficiency of inland freight
    distribution.
  • Favor inland development.
  • Regional sub-harborization of the port of New
    York.
  • Usage of barges and regional ports.
  • Inland rail terminals.
  • Process of freight diversion.

28
Port Inland Distribution Network and Regional
Sub-Harborization of Container Terminals by the
Port of New York, 2003
Maine
Vermont
New Hampshire
Syracuse
Albany
Massachusetts
Boston
New York
Connecticut
Pennsylvania
Davisville
New Haven
Bridgeport
Reading
New York
Potential Regional Barge Port
Philadelphia
Inland Rail Terminal
Wilmington
Inland Rail Route
LO/LO Barge Service
Camden
New Jersey
Virginia
Volume to Capacity
LOS
Salem
New York Metropolitan Area
0 0.30 (A) 0.31 0.50 (B) 0.51 0.71 (C) 0.72
0.89 (D) 0.90 1.15 (E) 1.15 (F)
Baltimore
Potential Freight Catchment Area
Delaware
Washington
29
Conclusion
  • Unique example of port governance
  • Vested interests in a wide range of activities
  • Real estate, road transportation and air and port
    terminals.
  • Enduring commitment to port development
  • Recent projects underline a new wave of port
    development.
  • Improving the efficiency of regional freight
    distribution.
  • Added terminal capacity, channel deepening and
    improved access to inland transportation.
  • Efficiency of governance
  • Regional focus
  • Coherence in coordinating regional development
    policies.
  • Well placed to anticipate future transportation
    needs and provide a coordinated response.
  • Broad mandate
  • Focus on a variety of projects and generate
    additional revenues.
  • Capture development opportunities.
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