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The Port Authority of New York and New Jersey (PANYNJ) did not sugarcoat the news. The headline on its press release read: “COVID-19-RELATED VOLUME DECLINE CAUSES SINGLE WORST QUARTER ON RECORD.”
Between March, when the full force of the coronavirus pandemic hit the New York area, and the end of June, the port authority’s revenue miss totaled nearly $800 million — about $200 million per month below budget.
PANYNJ Chairman Kevin O’Toole called it “an unprecedented number.”
“This region has been hard hit by the pandemic and the port authority was not immune,” O’Toole said in a statement. “Without federal assistance, the port authority and the region will be forced to feel the weight of this loss for years to come.”
The port authority said based on the results of the past six months as well as forecasts, it projects a $3 billion loss in revenues for the 24-month period ending March 2022. That $3 billion is the amount the PANYNJ is asking the federal government to provide “to avoid the impact of sharp revenue losses to the agency’s critically important capital construction projects.”
The PANYNJ is responsible for air, land and sea transportation infrastructure and operations. While all facilities remained open throughout the pandemic, the drop in activity was “staggering,” according to the port authority.
“At the nadir of the crisis in mid-April 2020, airport traffic had fallen over 98% from that same period in 2019. PATH commuter rail ridership dropped 94%; on the bridges and at the tunnels auto traffic declined by 64% and truck traffic by 36%,” it said. “This collapse in traveler volume continues to produce enormous revenue declines for the agency.”
PANYNJ Executive Director Rick Cotton, who himself tested positive for COVID-19 in early March, said the federal funding is needed to “offset the damage that the revenue loss will inflict on the agency’s capital plan.”
“The port authority’s second-quarter financial performance is the worst downturn in the port authority’s recent history — perhaps in its entire history and certainly since World War II,” Cotton said. “This decline was completely driven by revenue losses resulting from the precipitous decline in volumes at the agency’s facilities across the region.”
On the seaport side, the number of twenty-foot equivalent units handled was down 16.5% in May year-over-year.
“In the container business in March, we were down just 4.1%. When you compare that to some other large ports around the country, that 4.1% pales in comparison,” said Deputy Port Director Beth Rooney in a podcast posted on the port authority’s website. “In April we were down 7.5% and in May is really when we felt the largest impact in the containers so far and that was about 16.5%.”
Rooney said that like ports around the United States, PANYNJ has suffered from canceled — or blanked — sailings.
“Our blanked sailings peaked in June with 26,” she said, adding the voided calls began tapering off in July with 15 recorded.
While perhaps not braced for the huge financial hit from COVID-19, the port authority does prepare for crises.
“We have been through more than our fair share of crises in the New York/New Jersey region, so in many cases our response to COVID, while a pandemic we’ve never experienced before, leveraged the successes that we had achieved and the lessons learned” from Superstorm Sandy and 9/11, Rooney said.
Processes were put in place based on those lessons, she said.
“The Council on Port Performance was created about five years ago and was the first forum of its kind in the nation, perhaps in the world, where all sectors of the supply chain are working together to address these problems and hopefully address them in advance of them becoming an issue. So we had that structure in place and we literally just called everybody together … within days of this becoming a concern in our region,” Rooney said.
The council “involves everybody from ocean carriers, shippers, government agencies like Customs and Border Protection, warehouse providers, chassis providers, labor — runs the gamut — and they work together year-round in order to address supply chain issues,” she said. “So the preparations that we made were utilizing the forum and the framework that we have had in place.”
Supply chain shifts that began during the trade war with China — and have benefited East Coast ports — have continued during the pandemic, according to Bob LaMura, the port authority’s general manager of business development and maritime industry relations.
“We have seen, prior to COVID-19, some migration away from China to Southeast and western Asian countries” because of tariffs, LaMura said during the podcast. “I think COVID-19 is just another contributing factor that has accelerated some of this migration, which … lends favorably to the Port of New York and New Jersey, and statistically we are seeing a growth in the ocean carriers’ transit through the Suez as opposed to the Panama Canal. Again, that’s simply a shifting of global production to Southeast and western Asian countries. We see that as a positive effect and look forward to gaining more volumes with this routing.”
Another positive is an anticipated return of pre-coronavirus volumes — although it could be a slow comeback.
“There are some very positive indicators to expect that the volumes will begin to start regaining their strength,” LaMura said.
This article first appeared on s29755.pcdn.co
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