Silt Threatens NJ / NY Harbor Shipping
by Joe Harkins

Location. Location. Location. Even it it's mostly water, the three rules of the real estate mantra for value still apply.

If the water happens to lie in New York's "Lower Harbor" between the Statue of Liberty and the Verrazano Bridge, next to one hundred and six on-shore acres of well developed dock space, "That's all the better," says Jimmy Chen, president of Global Terminal & Container Services, Inc. "This is the most important spot in the harbor. Half of our site is in Jersey City, half in Bayonne, with highway and rail connections to the entire continent at our gate."

His Port Jersey Road office windows frame an enviable postcard-view of Jersey City's growing forest of riverfront office towers, and Manhattan's classic skyline. In the foreground is a marshalling yard where thousands of of multi-colored containers are stacked like toy building blocks.

Mr. Chen lays out a map of the 350-foot-wide channels that have been cut through the silty bottom of the port. "See this channel?" He traces the mile-long underwater path that starts where the Hudson River meets the ocean at the Ambrose Lighthouse and enters beneath the wide shouldered bridge that spans the Narrows. "Ships that use our 1,200 foot turning basin between the Military Ocean Terminal and the Port Authority's Auto Marine Terminal can save up to three hours compared to all the other loading facilities further up these channels."

The map reveals that the channel divides after it enters the Lower Harbor. Its branches wander away to the north, towards the cruise ship terminals a few miles up the Hudson River, to the northeast to the East River, and to the west through the Kill Van Kull, a narrow ribbon of water that leads up the Hackensack River to the docks of Port Newark's massive Elizabeth Marine Terminal. "Many billions of dollars-worth of cargo moved through here last year in container ships."

He's referring to ocean-going vessels, still quaintly called "steamships", that currently run about 1,000 feet long and carry hundreds of sealed metal boxes above and below decks. Most of the world's solid cargo travels from factory to market, sealed securely in metal containers that can be dropped onto the wheels of an eighteen-wheel truck or the bed of a railcar. Although some containers are 40 feet long, most are 20 feet, so the standard measure of a ship's capacity is called a "Twenty-foot Equivalent Unit" (TEU). Ships in service today carry between 3,000 and 5,000 TEUs, but that is changing, and Mr. Chen is worried.

"Ships rated at 6,000 TEUs are already entering service and 7,000 TEU ships are on the drawing boards in Japan and Germany. We can handle the length and width of those vessels, but the channels in and out of the harbor aren't deep enough The smallest of those new ships needs at least a 45 foot deep channel, and the bigger ones call for 50 foot draft." He draws a vertical hand across the flat palm of his other hand to mimic a ship's keel scraping bottom.

His associate, Ms. Kathy Mak, VP of Development for Global Terminal, brings the problem ashore. "This facility pays 1.5 million dollars in real estate taxes every year, divided about equally between Jersey City and Bayonne, but that's just a small part of what this property means to the local economy. We have more than 600 employees, and some of them are the highest paid in the metropolitan area. Our payroll runs above 30 million dollars a year and we spend millions more on locally purchased services. All of that is threatened by fifty years of infrastructure neglect that are finally starting to cause serious problems."

According to Greg Storey, VP of New York Shipping Assocation, which represents 75 shipping and cargo companies in the area, depending on how you rank various competitors, Global is the third or fourth largest terminal operation in the region. He also says New Jersey's side of the river handled about 90% of the more than 63 billion dollars worth of imports and exports that passed through here last year.

Global was founded in 1969 by a consortium of Hong Kong steamship and shipping companies headed by Oriental Overseas (International) Limited (OOIL) of Hong Kong. OOIL's integrated containerized transportation operations are among the largest in the world under the name of another wholly-owned subsidiary known only by the initials OOCL. Global officials decline to offer revenue figures but the combined Annual Report for OOIL, traded on the HK Exchange, claims to have $US 70.5 million in pretax profits on $US 1.7 billion "turnover of continuing business" in 1995.

Jimmy Chen and Kathy Mak are a well seasoned management team.

After graduating from Taiwan Maritime College in the late 1950's, Jimmy acquired a license that permitted him to captain the highest tonnage vessels of the time. In the late 1960s he became "Port Captain," an operating management position, for OOCL's New York operations. After climbing the maritime ladder with stops at Long Beach, San Francisco and Hong Kong, he returned to this area in January 1995 as president of Global Terminal.

Ms. Mak has an equally specialized background. Originally from Taiwan, she started in a supervisory position with Modern Terminal, Hong Kong's very first container terminal operation. One of her responsibilities was controlling the movement of cranes around the yard. A few years after joining OOCL in 1977, she briefly dropped out of the transportation world to study at UCLA, but then rejoined the company in 1983. While working a full time managerial position, she continued her graduate studies, eventually receiving her MBA, with a major in Corporate Finance, from the University of Washington. Her most recent move, after stints at Long Beach, Honk Kong and Newport Beach, brought her to the Jersey City Global Terminal last year.

Mr. Chen returns to the map of channels. "Some local channels haven't been dredged since shortly after World War II. Thanks to fortunate patterns of water and silt flow, our own dockside berths are 40' feet deep, but the channels that lead here have silted in to about 34 feet deep. Even now, some deeper-keeled 5,000 TEU vessels have to offload a part of their cargo in Canada so they can get into the harbor. That's a shame when you take a look out the window at our terminal."

Two floors down, 16 gateways, each resembling a highway toll-booth, funnel a stream of tractor-trailer trucks in and out of the area, less than quarter of a mile from an on/off ramp to the Jersey Turnpike. Instead of toll-collectors, the booths are armed with computer terminals and high speed printers backed by an AS400 computer. The system is designed for a thirty-minute turn-around time, from the moment a tractor arrives in the yard, until it pulls away to its destination with a container on its back or until it leaves one in the jaws of one of the many picker-trucks that roam the yard.

As each tractor arrives, usually on an advance reservation, bar code readers co-ordinate the paperwork. Driver IDs are confirmed and each is given a bi-lingual (English and Spanish) printout directing the vehicle to its loading spot in the 78 acre yard. It takes 3.4 seconds to confirm the assignment, calculate demurrage and handling charges, and note any special US Customs instructions that might apply.

Four massive, electrically-powered, gantry-cranes, each the height of a ten-story office building, tower above the marshalling area. The cranes move along rails paralleling the ship berths and can reach 120 feet out across vessels to pluck 45-ton loads off the decks at speeds up to 400 feet per minute. Often, more than 22 boxes are off-loaded per working gang hour.

Even before a container is laid down at dockside, it has been logged into the data-base and its routing determined by a computer that identifies each box. The efficient system handled more than 180,000 containers last year, and still has capacity for more.

Eight major international steamship companies make regular stops to load and unload goods at the 14 year-old Global Terminal facility. Although the local yard is not the largest in the country, its importance to the regional economy has been recognized. Governor Christine Whitman recently announced that emergency dredging will begin this summer in the Port Newark and Port Jersey channels.

Meanwhile, the long-term solution, completely clearing all the channels to world-class standards, remains on hold due to concerns regarding disposition of the silt. It is heavily contaminated as a result of many decades of dumping highly toxic materials into rivers that feed the harbor. Dredging the now quiet silt would reintroduce those contaminants into the waters and would affect the area to which they would be moved.

The extent of the silting problem was dramatized only last week. Sailors from the aircraft carrier USS John F. Kennedy were being ferried in a small landing craft to a Memorial Day re-enlistment ceremony at the Statue of Liberty. It ran aground on a silt bar just north of the Global Terminal docks. Government officials and national media waited an embarrassing hour until the boat could be pulled free.  -30-

Business News - New Jersey Magazine, June 1996

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