Commentary

THE GREAT PORT

by Roberta E. Weisbrod (i)

Seaports around the world are growing at a phenomenal rate, rushing to catch up with the spectacular growth of international trade over last decade. The growth of the port has the potential to improve the quality of life for New York City. How do we make that happen?

Growth of ports

The growth of ports parallels the enormous growth of international trade. Thirty years ago international trade accounted for only 11% of the nation's GDP, but by 1995 international trade accounted for 25% (ii). On a global level international trade has increased over 10% compounded annually for over a decade. This surging momentum feeds on itself, and accounts for the fact that most major US ports anticipate a doubling of trade activity in the next decade.

Seaports need to grow because 95% of international trade to and from the United States is carried on ships (iii). Seaports need to modernize to handle ever-larger containerships which carry goods cheaply, as well as the surges of ships unloading. Seaports must be able to meet the modern expectations of reliable timely service.

In recognition of this new reality, there has been an enormous amount of port development recently. There is more to come. According to the US Maritime Administration $9.1 billion will be spent in US port development between 1999-2003. This is a more than five fold increase in the amount of spending in constant dollars over the preceding 52 years ($19.8 billion constant dollars spent between 1946-1998) (iv). Post-2003 will show a yet higher increase in spending with major port expansions. According to US Trade Development Agency, as of 1998 over 100 port development concessions had been signed in the developing world, worth over $6.3 billion.

That Vision Thing: Improving the quality of life

The Port of New York/New Jersey is the nation's third largest port - and growing. It estimates that trade will roughly double in the next decade and a quadruple by 2040.

This is the defining moment.

We could lose the opportunity to have a modern port. Or, we could (gasp!) seize it. A doubling of international cargo could paralyze already congested roads, bridges and tunnels; and compete with commuter and inter-city rail. Air quality would be further degraded. Expansion of the port could mean the loss of more waterfront land and the filling of more underwater habitat.

Or we could achieve Greatness -- a resplendent environment and a sound economy. Here's what that Greatness must include:

Freight flowing through the metropolis unobtrusively and reliably. This would make the port of NY/NJ more efficient, way more competitive, and ends the region's horrid congestion. The Ports of Long Beach and Los Angeles are completing construction of the Alameda Corridor, a twenty mile rail corridor from the port, which consolidates and brings below grade a spaghetti of rail lines that caused air pollution and congestion. Seattle and Tacoma are building a similar grade separated rail freight system, the FAST (Freight Action Strategy for Everett, Seattle, and Tacoma ) Corridor (v). We can and should learn from these examples.

For the NY/NJ port we need the rail freight tunnel (or some functional equivalent) to bring goods from the seaport to both sides of the harbor by rail. We need far more barges, rail floats, and freight ferries radiating out of the harbor out to the Island, up the Hudson and up and down the east coast. See Freight Transport in NYC and the Region (/iotw/freight).

Jobs and wealth are created for the long term. The top manufacturing center in the nation is connected with the top two seaports in the nation, the Ports of Long Beach and Los Angeles (vi). The greater metropolitan Los Angeles-Long Beach 15 county area has 660,000 manufacturing jobs, growing in double digits over the past decade. NYC only has 246,000 such jobs, having lost 5% over the last two years. Worse yet, greater Los Angeles now has more apparel manufacturing- and design-related jobs than NYC, boasting that they surpassed the City in the mid-1990s (vii). (They are also very strong in new media and biotech). Many of the jobs are clustered around the Alameda Corridor.

Port investment isn't an automatic economic development magic multiplier input/output model. The State of California consciously used the sector approach (/iotw/sector). Greater Los Angeles set the stage for manufacturing jobs through planning and by taking advantage of the improving transportation system. It anticipated port-related construction and freight logistics jobs by instituting training programs that increase labor productivity, and certify local workers (viii).

The growing port brings people to the waterfront. The Port of Oakland built a waterfront promenade at the port along the glorious San Francisco Bay -- as well as a dozen other public access sites -- parks, museums, fishing piers, picnic spots and beaches (ix). The Port of Yokohama on Tokyo Bay has a magnificent piazza. Kobe, Japan's largest port, created an inventive and attractive pavilion. In short, an integration of port activities and access to the public benefits both the port and the public.

In New York City's plans for the revitalization of the port in the Sunset Park area of Brooklyn, there is a commitment to creating a public open space: a commercial/ cultural pier would oversee the emergent coastal habitat and the working port (x).

The natural environment is restored.
Wildlife habitat would be created, not lost. The Port of Los Angeles restored 600 acres of tidal wetland lagoon, created 190 acres of shallow water habitat, and annually prepares 15 acres of California Least Tern nesting area (xi). Several other ports have implemented large scale habitat projects -- Houston, Baltimore, San Francisco, and Rotterdam in the Netherlands (xii). In this region, the Bay Keeper of the American Littoral Society, the Natural Resources Defense Council and others, have lists of wildlife areas suitable for acquisition or restoration.

Energy would come from renewable, clean and plentiful sources. Windmills in Rotterdam generate electricity. Rotterdam is also instituting industrial ecology among port industries so the waste materials and energy of one plant become the raw materials of another. Southern California ports use compressed natural gas and electric to power vehicles and yard equipment.

Harbor mud, dredged from the bottom of the harbor to create deep channels, would be used creatively. In the Port of Tacoma, the Sitcum Waterway Superfund site was restored by capping with dredged material and creating a tidal marshland. The parking lot of Jersey Gardens Mall at Thruway Exit 13A was built with dredged material from the harbor to cover a brownfields site.

Beautiful designs enhance the shoreline. The utilitarian buildings and the layouts of the port represent the finest in esthetic design. Oakland boasts an American Institute of Architects award winning building -- combination truck gate/office headquarters for port managers. European ports hold design competitions for layouts. As one of the world class centers of design talent, NYC has an opportunity to lead the world in the esthetics of port redevelopment (xiii).

Reality Check: the Issues

Money. Modern ships coming into port require channels fifty feet deep. This requires dredging up the mud, silt, and sand continually deposited by the tides. Some of this silt, sand, and mud is contaminated, and disposal is a problem. Digging deeper channels for the future port compounds this problem. Geology adds a challenge in certain places: rock will have to be blasted from the Kill Van Kull, the waterway link between northern Staten Island and New Jersey that leads to the major parts of the current port in Newark/Elizabeth and to northwestern Staten Island's Howland Hook.

This costs money. Annual maintenance Myth-of-Sisyphus dredging cost tens of millions a year. Deepening the major channels to 45 feet, the basic standard, has been authorized by the Corps of Engineers at a cost of over $700 million. To get the port channels to the global modern standard of 50 feet, the recently completed Army Corps of Engineers Harbor Navigation Study indicates will cost nearly $1.8 billion. The rub for this region is that according to the Corps benefit/cost analysis, the areas which make the most sense to dredge are not the areas which currently do most of the business (xiv).

Summary of dredging costs, benefit cost ratio and current port activity
Economic Summary for dredging to 50 feet

Waterway

% Port business

Cost (millions)

Benefit/Cost ratio

Interpretation

Port Newark/
Elizabeth*

83%

$1243

1.05

Marginal value

Howland Hook**

8%

$432

1.19

Positive**

Port Jersey/
MOTBY***

8%

$460

2.5

Very positive

South Brooklyn

-

$393

1.19

Positive

*This calculation assumes the overlapping channels to Bayonne would be done first -- otherwise the cost would be $1.5 billion and the benefit/cost ratio a just-say-no 0.8).

** Howland Hook has a positive benefit/cost ratio only if the channel to Port Newark/Elizabeth is done first.

***Port Jersey contains the privately-owned and operated Global Marine Terminal (not Port Authority property). MOTBY is the recently decommissioned Military Ocean Terminal in Bayonne.

Note that these cost estimates depend on controlling the cost of disposal of dredged material, particularly what is considered clean material. Recent protests about the disposition of what is defined by EPA as clean material in the ocean could increase the cost (xvi). The effect of this would make dredging the channels to Port Newark/Elizabeth in Newark Bay cost much more, and would tip the precarious slight positive to a whopping fuggedaboutit.

At the root of the cost of dredging is the question: Who pays? The federal government, through the Corps, will only pay for 50% of the dredging costs deeper than 45 feet and none of the associated costs. And if that isn't enough, the coffers are dry. The Harbor Maintenance Tax on exports that helps fund dredging was declared unconstitutional and exporters are to be reimbursed for their tax expenditures from 1987 - with interest - to the tune of $1.2 billion (xvii).

Politics. Every port has "normal" politics but New York/New Jersey is the only major port in the world that is controlled by two sovereign states, with increasingly bad blood between them. While other Port Authority facilities - the PATH, the Bus Station, the airports, the World Trade Center - are sources of dissension, the states' disagreements on the seaport is much more profound. The 25 year lease for the two major tenants - the containership lines of Maersk and SeaLand was up for renewal. Together, they accounted for 25% of the total revenue. Not only did the lines threaten to leave, but they set up a bidding war involving the other east coast ports. Their criteria were: market size, 50 foot depth or promise of same, rapidity of throughput, and cost. When Baltimore seemed to be in the lead, the Governor of NJ sweetened the pot with $120 million for dredging (xix). That seemed to clinch it. Maersk-SeaLand (they merged) chose NY/NJ with the proviso that their Port Newark/Elizabeth terminal would be at 50 foot by 2009. At a dredging cost of $1.243 billion ($1.5 billion if Bayonne isn't included ) and a benefit/cost ratio of 1.05, the Governor of NY could well ask why should his state subsidize the deal?

Movement of Goods. Moving goods quickly to market is currently horrendously difficult with the congestion of bi-state highways. (See Freight Transport in NYC and the Region.). If the amount of goods coming to and from the port will double in a decade -- and each ship coming in will deliver an enormous pulse of goods -- how will the resulting truck and rail traffic be handled?

The answer, says New Jersey, is more and better connections to rail (from on-dock rail service to higher capacity freight lines and connectivity) and a freight truck-only road (called Portways).

New York responds rightly, What does this do for me? Much if not most of the port's regional market population and consumer base is east of the Hudson. If both the port and the good rail transportation links are on the New Jersey side - in the absence of a direct freight rail connection, or an alternative system of high-powered waterborne freight connection - New York is consigned to stomaching enormous increases of what it doesn't want and can't handle - more trucks.

So, how fast can the goods move through the yard from ship to inland destination? More waterfront space for growth isn't necessarily needed, but labor and technology are. The top two terminals in the world, Hong Kong and Singapore, use space tenfold more efficiently than the Port of New York/New Jersey. In terms of productivity - moving containers (defined as twenty foot long equivalent units) per acre per year - Hong Kong moves 20,000; Singapore moves 15,000; Long Beach, the top United States containerport moves 4000 (xx). By the same measure, productivity at the Port of NY/NJ is approximately 1500 per acre per year. Many port experts stress the need to improve efficiency/productivity and regional freight transportation before adding more land (xxi).

Making the Great Port happen

The strategy is simple:

Educate the public about the port. The port needs constituents - people who understand and value it. In this region there is virtually no education of citizens about the port (xxii). Rotterdam has a dozen boat tours a day viewing and explaining the port. Both tourists and residents pay to take these tours, and the boats run full. Most other US ports have aggressive port education programs, Seattle being the most stellar.

Convene the civics. There are a number of organizations working to develop a Green Port concept, including the TriState Transportation Campaign, United Puerto Rican of Sunset Park, the Coalition for the Bight, and the Metropolitan Waterfront Alliance (a bi-state civic alliance). They and others now have an opportunity to feed these wishes and proposals into a environmental mitigation plan for the Port, the Comprehensive Port Improvement Plan, an intergovernmental effort lead by the Environmental Protection Agency. Jim Tripp, acting as Chair of the Dredged Material Management Integration Work Group has been ably coordinating these efforts. And the Nation's Port, a bi-state coalition of business, labor and community leaders supporting the development of the Port is putting muscle into creating a port that is "deep and green."

Energize public officials. On the New York side, Congressman Jerrold Nadler, Mayor Giuliani, and Governor Pataki appreciate the need for port development and the value of transportation infrastructure to the growth of the port, the environment, and to the citizens of the region as a whole. But that's the just the first step to achieve greatness. We need to engage a wider circle of public officials at all levels of government to support the port, and to embrace waterfront access, environmental restoration, and magnificent design.

NOTES

i Roberta E. Weisbrod is an environmental consultant specializing in ports, freight transportation and waterfront development.

ii Transportation in the United States: A Review, US Department of Transportation (DOT) (1997)

iiiAn Assessment of the U.S. Marine Transportation System: A Report to Congress. US DOT (Sept. 1999)

iv United States Port Development Expenditure Report, US DOT Maritime Administration. (November 1999).

v www.portseattle.org

vi www.lacity.org/busteam

vii New York State Department of Labor, Employment Statistics (SIC 2-digit). 1997, 1999.

viii The Alameda Corridor Transportation Authority website -- Job Development and

Training, www.acta.org; and "Training for Intermodal Freight Transportation Workers" by Roberta E. Weisbrod, TR News (Transportation Research Board, (Jan.-Feb. 1999)

ix www.portofoakland.com/shoreline

x The Strategic Plan for the Redevelopment of the Port of New York. Executive Briefing. New York City Economic Development Corporation (February 1999).

xi www.portla.com -- Environment

xii Ports: Technology and Sustainable Development (Journal of Urban Technology (Spring 1996).

xiii "Designed in New York/Made in New York" The Municipal Arts Society of New York (Winter 1997).

xivFeasibility Report for New York and New Jersey Harbor Navigation Study: Final Environmental Impact Statement. US Army Corps of Engineers New York District (December 1999).

xv Feasibility Report for New York and New Jersey Harbor Navigation Study: Final Environmental Impact Statement. US Army Corps of Engineers New York District (December 1999).

xvi "Environmental efforts slow New York-New Jersey port dredging projects," by Al Frank, The Newark Star-Ledger (December 30, 1999).

xvii "U.S. Must Refund Harbor-Use Taxes Appeals Court Says," by Robert S. Greenberger, Wall Street Journal (March 1, 2000)

xviii "Feud Over How Port Authority Spends Money Creates an Impasse" New York Times (Feb. 24, 2000).

xix "New Jersey rushes to sweeten port bid, Longshoremen rally to send Gov. Pataki a message" by Terry Brennan, Journal of Commerce (April 13, 1999); "Pataki rejects Whitman's $120 Million Deal to Keep Shipping Lines," by Charles V. Bagli, The New York Times (April 13, 1999).

xx Intermodal Freight Transportation, fourth Edition, by Gerhardt Muller. Washington D.C. Eno Transportation Foundation and Intermodal Association of America, (1999).

xxi "Identifying Intermodal research requirement," by Theodore Prince, Journal of Commerce (February 24, 2000).

xxii The Port Authority has prepared an annotated map "Port Vistas" pointing out where port activities may be viewed and PortSport (c) 1999, a board game for high school students and their teachers explaining international trade and its maritime port dependence.

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