Explainer: Port Authority Oversees Region’s Trade and Key Transportation Links

In addition to airports and passenger rail, agency is responsible for billions in revenues, millions of tons of freight, and hundreds of thousands of jobs

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The New York-New Jersey harbor is among the world’s busiest when it comes to commerce, dispatching American-made goods to ports around the world and importing everything from automobiles to imported beer to underwear for customers across the continent. The port evolved from one of America’s oldest, most diverse commercial waterfronts and is home to some of the industry’s greatest advancements.

Overseen by the Port Authority of New York and New Jersey – which also manages regional airports and some bridges and passenger rail service — the port is the largest on the East Coast in terms of cargo volume and the third-largest in the nation, ranking behind facilities in Los Angeles and Long Beach, CA. The Garden State benefits significantly from these port operations, in terms of jobs and revenue.

Harbor history: Once a landscape of gently sloping shores and expansive mudflats, the region’s harbor and estuaries provided a wealth of natural resources, transit options and other benefits to Native Americans and early settlers who followed Henry Hudson’s 1609 exploration of the region.

Decades passed, wetlands were filled, channels dredged, and docks and piers developed to meet the port’s needs. Eventually a canal system and, later, steam-powered railroads connected the region with growing populations across North America, ensuring the harbor’s long-term success as a commercial hub.

By the early 1900s, the New York-New Jersey metropolis had grown exponentially and the port was the busiest in the world. Crowded with ferries, cargo ships and private boats of all sorts, there was little coordination between operations and jurisdictional battles cropped up between the two states. After years of negotiations, a bi-state agreement in 1921 created a joint agency to manage and modernize port operations in northern New Jersey and New York City. At the time, it was called The Port of New York Authority.

In 1948, the authority was tasked with daily operations at Port Newark and, within three years, had greatly upgraded and expanded the facility. A decade later, the agency opened what is considered the world’s first port designed specifically for shipping containers, in Elizabeth.

The new facility embraced a 1956 invention that revolutionized the water-borne shipping industry: the standardized cargo container, the rectangular boxes stacked on ships and towed by trucks that significantly sped up deliveries worldwide. Elizabeth became known as “America’s Container Capital.” Today, more than 90 percent of global trade travels by ship and container cargo remains the port’s bread and butter.

How it works today: The Port Authority now manages the complex network of piers, terminals, truck and rail connections nestled along the urban shoreline in Union, Essex and Hudson counties in New Jersey and Brooklyn and Staten Island in New York. It leases most sites to private companies that run the day-to-day operations, loading and unloading of the massive container ships with giant cranes. The largest operation, Maher Terminal, just off the NJ Turnpike in Elizabeth, boasts an enormous 10,000-foot berth for ships and a crane capable of lifting 65 tons.

The agency also runs a so-called public berth, in Port Newark, which moves some 600,000 vehicles each year. It is used by auto companies importing and exporting new and used cars and by individuals who want to arrange to send a special vehicle overseas. In addition, the PANYNJ oversees three cruise terminals: in Bayonne, Brooklyn and on Manhattan’s West Side.

Cargo in, cargo out: The Port of New York and New Jersey has grown busier over the years – despite a dip during the Great Recession and changes in the nature of shipping, as containers have replaced bulk goods.

In 2004, the port imported close to 18,600 million metric tons of goods and exported nearly 7 million tons. A decade later, port operators brought in almost 24,400 million tons and shipped out just under 11 million tons. The number of individual containers transported jumped from more than 2.6 million to more than 3.3 million over the same decade. In 2014, the total value of all the cargo moving through the port was estimated to exceed $200 billion.

The trend continued over the past year. According to a year-end briefing from the Port Authority and New York Shipping Association, which represents terminal operators and related marine businesses, the volume of business at the port is outperforming last year’s numbers by double digits. Automobile shipping had jumped more than 23 percent, as of September.

Other benefits: The value of the port goes beyond the volume of the cargo it handles. The location of these facilities and their connection to the highway and rail networks needed to move goods makes the region attractive for a range of shipping-related industries, studies show. Perhaps the best example is the recent growth of massive distribution centers along the NJ Turnpike, which generate additional local economic benefits.

According to a 2014 study by the New York Shipping Association, local port industry directly provides more than 165,000 jobs and a total of almost 300,000 jobs in the region. The industry generated some $18.3 billion in personal income and nearly $30 billion in business income. It also paid more than $6 billion in federal, state and local taxes. The region defined by the study includes 31 counties in central and northern New Jersey, southern New York and eastern Pennsylvania, which the authors said highlights the broad geographic impact of the port operations.

New Jersey enjoys the vast majority of these economic and employment benefits, according to the NYSA study. Roughly 85 percent of the port jobs – direct or indirect – are held by Garden State residents and these workers take home nearly 80 percent of the personal income generated. Two-thirds of the business income is accrued by New Jersey companies and the state benefits from most of the tax dollars as well.

Looking forward: The port sparks significant public and private capital investment, spending that results in short-term construction jobs, a need for raw materials and professional services, and new opportunities for growth. The Port Authority has spent billions over the years to dredge channels, modernize truck and train connections, and reduce the environmental impact of the port’s operations, which have degraded the quality of life in a number of traditionally poor, immigrant communities along the waterfront.

In December, Port Authority commissioners approved a $6.5 billion budget for fiscal year 2016, which includes $3.5 billion in capital investments. This budget includes funding for a number of ongoing or planned capital projects and $8 million, from operating funds, to create a port master plan that examines how to better move freight across the Hudson River.

The agency is roughly halfway through a massive $1.3 billion capital project to raise the Bayonne Bridge enough to enable the newest, largest class of “Panamax” ships to pass underneath. Last winter’s bad weather resulted in construction delays and the project won’t be completed for several years. Eventually, it will be the same height as the Verrazano Narrows Bridge.

Work is also continuing on a $600 million capital initiative to provide direct rail access to all major marine terminals. The agency reached an agreement in October to begin construction on a key facility to link the Bayonne terminal with a freight yard in Jersey City. Slated to open in 2018, the connection will speed loading and unloading, and reduce the pollution caused by the current truck traffic to the port.