American Ports Use Innovation To Stay Ahead

THE ExpressRail dock in Newark hums with activity. Cranes offload mobile-home-sized containers. Futuristic-looking straddle carriers ferry them to a railroad staging area. The huge boxes are then placed directly on rail cars, ready for shipment across the country.

"We are an important element of people's daily lives, though they often don't realize it," says Lillian Liburdi, port director for the Port Authority of New York and New Jersey. Between 80 and 85 percent of all cargo moving in international trade to or from the United States is transported by oceangoing vessels.

US ports, which often operate independently of local governments, have always aggressively sought funding for infrastructure improvements. By improving on-dock facilities for handling exports and imports, and by making berths more accessible to ships, ports compete with each other to handle cargo.

Higher shipping volumes bring new jobs to regional economies, making infrastructure spending on ports relatively popular.

Marine commerce represents about $18 billion in economic activity for the New York metropolitan area, including $2.1 billion in business income, $4.7 billion in wages, and $0.3 billion in tax revenues. About 180,000 jobs also hinge on the port's success.

"As impressive as they are, these figures are in jeopardy of being significantly diminished unless some major improvements are made to the region's infrastructure," Ms. Liburdi says. "We have to make investments in our facilities to show the industry that we are serious."

By keeping delivery times and shipping costs down, strategic infrastructure improvements can also help New York/Newark compete with other ports for import and export business.

The Port of New York and New Jersey's new ExpressRail facility, which brings the rail connection directly onto the dock next to the ships, is one of a number of projects intended to boost efficiency. The port is also dredging its channels and berths to facilitate its handling of larger ships.

Since ExpressRail was inaugurated last December, the expense of transferring goods between ships and other modes of transport has dropped 60 to 70 percent, says Frans van Riemsdyk, assistant vice president of Maher Terminals, which runs the temporary ExpressRail facility. (A permanent ExpressRail facility is scheduled to be completed by the end of 1993.)

The Port of New York and New Jersey recently passed the port of Long Beach, Calif., in an ongoing duel for the No. 2 position among US ports. The Port of Los Angeles easily holds the No. 1 spot for cargo volume.

Rail connections are making ports on the West Coast more competitive with those on the East Coast. Western ports, which have benefited from the growing trade across the Pacific Ocean (it surpassed cross-Atlantic trade in 1982), have teamed up with rail carriers to move products inexpensively to markets as far east as New York's 18-million-person metropolitan area.

"We are forced to compete not only with our historical [competitors] - Boston, Philadelphia, Baltimore, Norfolk - but also with ports on the West Coast, the South Atlantic, and Canada," Liburdi says. "We don't want cargo that's coming to this region not to come to this port."

When Port Authority planners in New York saw northern Asian countries start to pour investment into South Asia, they came up with a plan to boost their competitive position vis-a-vis the West Coast: Cargo could be sent via the Suez Canal from Singapore, unloaded efficiently in New York, and then shipped by rail or truck to points in the eastern US.

Shipping through the Suez would not only be faster than to the West Coast and onward over land, but also cheaper. Traveling extra ocean miles between Asia and the East Coast is less expensive than moving goods by rail from ports on the West Coast to eastern markets.

ExpressRail was the linchpin for this new strategy, as the quick transfer of cargo between ships and rail and road transport was essential.

Maher Terminals worked out an unorthodox deal with the International Longshoreman's Association to make sure that the new facility would not be hindered by old union work-rules. With ILA support, new same-day "doublestack" rail service (two containers stacked on a rail car) has become available to Chicago on Consolidated Rail, and to Canada on the Canadian Pacific Railway. These new service improvements have boosted the competitive stance of the port.

Accomplishing the broad vision of attracting new business to the port requires "breaking it down into different strategies and then taking small, incremental bites, and then delivering on them," Liburdi says.

"We have to be able to show small strides every year."