Experts discuss the future of regional ports at the New York Fed

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Port and shipping industry experts discussed the past and future of New York and New Jersey’s ports at an event hosted by the Federal Reserve Bank of New York this month.

The “Ports of Tomorrow” event was carried out in partnership with the Port Authority of New York and New Jersey and the Regional Plan Association and featured several panel discussions with public and private port officials.

It came as regional ports report strong recoveries and growth in traffic after pandemic-related lows.

The Port of Newark, New Jersey, is among maritime ports reporting traffic recoveries.

Bloomberg News

The Sept. 8 event was opened with remarks from Tom Wright, president and CEO of the Regional Plan Association, Kevin J. O’Toole, chairman of the Port Authority of New York and New Jersey, and Rick Cotton, executive director of the Port Authority, followed a brief talk on the history of U.S. port development by Dr. Kenneth Jackson, Professor Emeritus of History at Columbia University.

A panel moderated by Linda Goldberg, financial research advisor at the New York Federal Reserve, then discussed the current economic conditions facing the port industry.

Panelists included Simon Fuchs, a research economist at the Federal Reserve Bank of Atlanta, John Murnane, senior partner at the management consulting firm McKinsey & Company, and Anne Strauss-Wieder, director of freight planning for the North Jersey Transportation Planning Authority.

Goldberg said the region’s ports have seen a sharp rebound in traffic since the pandemic, including the Port Authority’s Port of Newark, which took the top spot as the nation’s busiest for several months after November.

The economic impact of the industry has “grown accordingly,” Goldberg said, with port-related job creation continuing to help drive local economies.

Murnane said that while recent economic conditions had most industry participants “hoping a recession does not mean a haircut,” ports have realized greater efficiency and reliability with the help of new organizational and computing technology.

Those advances have saved shipping companies time and fuel, a top priority in the current market, he added.

Strauss-Wieder too noted the advancing technology, while pointing out the need for flexible local incentive programs to drive interest in the region’s facilities.

Fuchs said a changing economic landscape meant all of the industry’s participants were paying heightened attention to understanding financial vulnerabilities when planning their futures.

The industry as a whole would benefit from a “customizable gearbox” of tools to establish a more resilient financial framework going forward, he said.

In response to the pandemic, “a more resilient” financial and operational framework is “something that is becoming more and more popular in response to these issues,” Fuchs said.

The day’s final panel was moderated by Tiffany-Ann Taylor, vice president of transportation at the Regional Plan Association, focusing on the role ports play in wider local, regional, and national development.

Panelists included Andrew Kimball, president and CEO of New York City Economic Development Corporation, and Beth Rooney, director of ports at the Port Authority of New York and New Jersey

While the difficulties of pandemic birthed a flurry of new development and active, it has also led to a wider visibility of the industry as a whole, Taylor said, posing to panelist the question of how that visibility has strengthened or weakened relationships with local stakeholders.

Since the pandemic, Rooney said she has noticed a far greater appreciation among all players in the industry for the logistical complexities of shipping operations, including among major brands and manufacturers who now see “how important the need is to control the supply chain.”

Designing port facilitates with climate resiliency in mind was part of those considerations and represented a growing concern locally, Rooney added.

“We have to think about it really as a risk of regional importance,” she said. “There’s a lot more engineers working on our teams now as we work with risk management and take steps to protect critical infrastructure.”

Major expenditures focusing on green updates and climate resiliency in regional ports, like the billions spent by the Port Authority under its most recent capital plan, would be key to keeping the region’s shipping competitive going forward, Kimball said.

Kimball said the industry has invested millions in developing training programs and other educational opportunities to meet the growing demand for labor. They would likely invest millions more going forward.

“How do we prepare the next generation to step into those jobs?” he asked. “How do we create opportunities with a GED or high school pathway?

Kimball also pointed to the “explosive growth” in e-commerce giving U.S. businesses, especially those in smaller profit bands, greater exposure; adapting port facilities would continue to give such businesses greater access to international markets, he said.

“The importance of getting those goods out of trucks and onto the water is absolutely critical,” Kimball said. “That creates an enormous challenge for us in the city in terms of distribution of goods, and we are very focused on creating a network-like mobility.”

Along with evolving supply chain dynamics, Rooney said the port business is also contending with changes wrought by widespread work-from-home policies.

Unforeseen ripple effects and wider changes in the concept of work-life balance presented challenges as officials planned for a future of increased port activity.

“A lot of the frontline jobs in the terminals, the jobs in the warehouses, are 24/7 jobs and people don’t want to do that,” she said. “There’s a number of very basic fundamental issues that we need to figure out.”

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