Moving Cargo at NJ Ports Will Take Much More Than Container Ships

Meir Rinde | April 20, 2015 | Transportation
Creating jobs at Port Elizabeth/Port Newark is partly a matter of streamlined hiring processes -- and very much a matter of infrastructure

State Senate President Stephen Sweeney (D-Gloucester) talks with a Port Elizabeth official. The Bayonne Bridge can be seen in the background.
Sitting in a glass-walled conference room at Port Elizabeth’s Maher Terminals building, with a panorama of giant cranes unloading container ships visible to one side and a highway full of cargo-bearing trucks behind him, Senate President Stephen Sweeney (D-Gloucester) heaped praise on the port’s job-creating might, saying it could help boost the state’s anemic economic growth.

Provided, that is, that the state finds funding to improve the road and rail infrastructure the port depends on, Sweeney said. And that the cumbersome process of hiring longshoremen and other skilled workers is improved, industry officials added.

“We have a functional port that is poised to explode with growth and economic opportunity, but we on the state side are ignoring that by not making the necessary improvements to move things,” Sweeney (D-Gloucester) said. “We really want to bring attention to great jobs that provide middle-class incomes, where people can support their families. We have the capacity to grow them.”

The visit to the port Friday was the latest of a few that Sweeney, a potential gubernatorial candidate, has made to sites around the state recently to highlight economic development issues. His tour of a terminal at the sprawling Port Elizabeth/Port Newark complex focused on managing the increased cargo flow the facility will see about two years from now, when a $1.3 billion project to raise the Bayonne Bridge roadbed is expected to be completed.

That initiative will allow the passage of modern, larger ships, which can carry more than twice the number of shipping containers than vessels that currently use Port Elizabeth/Port Newark. The bridge project was driven by the expansion of the Panama Canal, which will soon accommodate bigger ships coming to the East Coast from Asia.

John Nardi, president of the New York Shipping Association, which represents terminal operators and shipping companies, said the port has six terminals, four of them in New Jersey, and employs about 4,500 people. The port industry overall directly supports 143,000 jobs in New Jersey and 23,000 in New York, in management, trucking, warehousing, and other fields.

In New Jersey, the industry annually supports $14.5 billion in personal income, $20 billion in business income, and $1.6 billion in state and local taxes, according to a 2012 NYSA study.

Before sitting down with port officials and reporters, Sweeney, along with Sen. Teresa Ruiz (D-Essex), Sen. Sandra Cunningham (D-Hudson), and Assemblywoman Eliana Pintor Marin (D-Essex), toured the port, driving past rows of giant cranes that hovered over ships.

They watched as containers were lifted off the decks and handed down to yellow straddle carriers, the towering vehicles whose drivers ferry the metal boxes onto piles where they await transfer to trucks. The Bayonne Bridge was distantly visible where Newark Bay meets the Kill Van Kull.

When larger, so-called post-Panamax ships begin passing under the bridge, the increased cargo flow will put pressure on the region’s transportation infrastructure, including its aging rail lines and bridges, Sweeney said. That adds to the urgency of a fix for the state’s Transportation Trust Fund, which will run out of money for new projects sometime next year.

“We’re going to raise the bridge to get the giant ships, but you’re not going to be able to move (the cargo),” Sweeney said. “It’s a wasted investment if you can’t move the product.”

Nardi said the companies he represents could benefit in particular from using trains to move goods rather than trucks. Port Elizabeth/Port Newark is largely a truck port, with many containers only moving short distances to local distribution sites, and rail capacity is limited. But the cost of moving a container by truck is $92 compared to just $10 for rail, making the prospects of expanded train use enticing.

“We’re trying to do everything we can to promote the rail business,” Nardi said.

“It’s faster, cleaner, it’s more effective,” Sweeney said. “And it’s much more attractive to people who want to come here. If you talk to the people that bring in the ships, they would prefer rail every day of the week.”

[related]A bigger issue than transportation, however, is managing labor issues and costs, Nardi said.

In response to retirements and growing demand, the port is in the process of hiring 532 longshoremen and 250 other skilled workers. But Nardi said the process has been dragged out by the Waterfront Commission of New York Harbor, which was created to end the infiltration of organized crime into the ports and is tasked with vetting potential hires.

For example, the Waterfront Commission was sent 57 union job candidates for positions as checkers, who track and manage shipping containers. Some were sent through, some were rejected for suspected criminal affiliations or other issues, and seven have remained on hold for an average of 397 days, according to NYSA statistics.

“I don’t care if they reject them or take them. Give them an answer! Because everybody else is waiting on these seven people,” Nardi said. “This is what we’ve got to eliminate. We can’t be short of checkers, because maybe they don’t like the person’s name, but they don’t really have a specific reason they can reject them, so they just don’t answer. This is the nonsense that has to go away.”

Port unions have sued the commission over alleged interference in hiring, and a bill to eliminate the bistate agency passed the Assembly and Senate unanimously. Commission officials have reportedly blamed delays on the longshoreman’s union and the NYSA, saying they have not met recruitment requirements for racial diversity and failed to sponsor candidates who passed commission screening.

Sweeney and other legislators want to shift responsibility for background checks of potential hires to the state police. Eliminating the commission may require passage of identical legislation in New York and New Jersey.

More hires are needed in part because the port is moving from a system in which a “gang” of workers is assigned to one ship, and works long hours to unload and load the ship, to a relief system that allows them to work fixed hours and multiple teams to rotate in, Nardi said.

The change is expected to cut overtime, reduce absenteeism, improve productivity, and facilitate unloading of the much larger ships that will start arriving in late 2016 or early 2017, he said.

The port is pursuing a number of efforts to increase efficiency as it seeks to make itself a more attractive destination for shipping companies seeking to unload their goods at the lowest cost. While the New York-New Jersey port remains the busiest on the East Coast, because of the high local consumption of goods, southern ports, especially Savannah, Georgia, have been growing at a much faster clip and taking away potential business.

Imports and exports through New York-New Jersey climbed by 4 percent between 2010 and 2014, but the port’s market share actually declined from 33.6 percent to 30.1 percent during that period, Nardi said. He said the lost business amounted to a million lost man hours, or the equivalent of 500 jobs.

Anything that reduces per-container costs even slightly, whether by reducing labor expenses, the region’s high bridge tolls, or a cargo-facility charge that is unique to New York and New Jersey, will help bring more ships to the port and help reverse that worrisome trend, he said.

“We need to control our costs,” Nardi said. “This is a very marginal business. I ran the operations for a shipping company that moved two million containers through North America. If I could save a dollar, that shows up on the bottom line. One dollar on the container, okay? You’re talking about a container that costs a thousand dollars to move.”