East leads in improvement outlays

Ports serving the North Atlantic region have outspent all other sections of the country in upgradiding their facilities. This investment of some $1.5 billion since 1946 has been made to try to stem the decline the region has found itself in as the population moved south and business moved to other ports. For the most part, the spending has been on containerization facilities, built in the late 1960s, giving the East Coast ports -- and New York in particular -- a leg up on Gulf coast and other Southern ports that were slower to modernize.

The spending itself, however, has not halted the longer-term trend, which is not very encouraging. From 1970 to 1977, the North Atlantic ports lost 20 percent of their total export liner cargo and 10 percent of their import liner cargoes.

The biggest loser in this period was New York, which saw its share of the export market reduced from 14.4 to 13.2 percent. The same was true of imports, with New York Dropping from 30.2 percent of the market to 27 percent in 1977.

Newport News, Va., Boston, Philadelphia, and Baltimore all increased their volume of imports and exports.

John R. Immer, president of Work Saving International, a Washington, D.C.-based management consultant, says some of the reasons for the East Coast's decline include shifting demographics, the impact of the railroads, and the problems of dealing with organized labor on the East Coast.

Even though there was a major shift of population from the North Central states to the Sunbelt, the traffic pattern did not make the same shift, Mr. Immer points out. Rather, it moved to the West Coast ports, whose traffic increased over 50 percent in the 1970-77 period.

"Perhaps the most important force in causing these changes has been the impact of the railroads," the management consultant says. Shippers found that railroads were the most competitive way to ship freight bound for ports. Unfortunately, the railroads in the Northeast were deteriorating, while those in the West were aggresively modernizing. Thus, grain and other business from the Midwest went west instead of to the Eastern ports. Only recently has there been any improvement in the East Coast rail situation.

Labor problems also inhibited shippers from using East Coast ports. After a series of strikes tied up the Eastern ports, Mr. Immer says, shippers found that alternative ports were as competitive as those in the East, and they didn't have the added problem of strikes. Thus, Gulf Coast and other Southern prots profited at the East's expense.

STill, as Daniel P. Herbert, manager of intermodal marketing in the Atlantic area for Trans Ocean Leasing Corporation, points out, even though New York is an expensive place to do business, many companies have to use the port, since it remains the closest to their markets.

In fact, officials at the Port of New York-New Jersey are quick to point out that 1979 was its third best year since 1941, when all war commerce was routed through the city. If it wasn't for a tugboat strike, says Anthony J. Tozzoli, director of marine terminals, the port would have had its best year ever. And New York remains the nation's leading port for both imports and exports.

In an effort to upgrade the port, the port authority has been an active force in building new modern facilities in Brooklyn and Staten Island or in encouraging private shippers to do so.

Recently, in an effort to make the Brooklyn and Staten Island terminals more competitive with Baltimore, the port got the Consolidated Railway Corporation (Conrail) to match the rates charged by the Chessie System in shipping from Midwest markets to the East Coast. As a result of the new rate structure, Mr. Tozzoli says, shippers who use Brooklyn and Staten Island can now employ rail piggyback service, instead of using truckers to drive their shipments across Manhattan.

Unfortunately for the port, passenger service has continued to declined the port's efforts to half the trend. A new passenger terminal has failed to do it, mainly because of the advent of low-cost air fares. Special attempts by the port to attract new liners and services have been unsuccessful to date.

Boston, through the Massachusetts Port Authority, the port's operating authority, has become the leading container facility in New England. From 1973 to 1978, Massport spent some $6 million and expects to spend over $17 million from 1979 to 1983, the Department of Commerce reports.

Philadelphia also invested heavily in container facilities between 1973 and ' 78, spending $28 million, and the port expects to continue this improvement, spending some $15 million through 1983.

The Port of Baltimore has been one of the heaviest investors, spending $30 million in the last five years, with another $45 million allocated for the 1979- 83 period. The port is also planning a $100 million dredging project to deepen the channel leading up the Chesapeak into the port.

Although Norfolk saw its traffic decline, it has also invested in new container facilities, spending $19 million on improvements. Hampton Roads has spent its money on facilities to handle the coal boom -- whenever that happens.