The Port of New York and New Jersey, a key gateway for imports into the northeastern United States, is setting its sights on securing a larger share of profits from the booming ocean trade industry. Amid global shifts in port investments and operations, the port is making strategic moves to bolster its financial standing and infrastructure, reflecting broader industry trends and challenges.
A Global Context: Rising Stakes in Port Investments Recent years have seen substantial investments in port infrastructure and terminal operations worldwide. For instance, in 2022, shipping giant CMA CGM acquired a 90% stake in Fenix Marine Services, one of the largest terminals at the Port of Los Angeles, in a deal valued at $2.3 billion. Similarly, China’s Cosco Shipping Ports has aggressively expanded its global footprint, taking stakes in Thailand’s busiest port and opening a $3.5 billion megaport in Peru. These developments underscore the growing competition among ports and terminal operators to capture a larger slice of global trade.
The Port of New York and New Jersey: A Key Player Handling nearly 6.6 million containers in the first nine months of 2024—a 13.8% increase compared to the same period in 2023—the Port of New York and New Jersey remains a critical hub for U.S. trade. Its strategic location and robust infrastructure make it indispensable for importers and exporters across the northeastern U.S.
However, the port has faced challenges, including a three-day strike in October by unionized longshore workers, part of a larger walkout affecting ports from Maine to Texas. As a critical Jan. 15 deadline looms for reaching a new labor agreement, tensions remain high, with the potential for further disruptions.
A More Assertive Approach to Terminal Deals The port’s evolving strategy was evident in the 2023 sale of two terminals to CMA CGM. The $2.8 billion transaction included facilities in New Jersey and Staten Island, with the port securing a $20 million fee as part of the deal. Beyond the immediate financial gains, CMA CGM committed to higher rent payments based on container throughput and agreed to share in container storage fees exceeding baseline amounts. The carrier also pledged $600 million for essential dockside infrastructure upgrades, including wharf and berth repairs.
Lessons from the Pandemic The Covid-19 pandemic served as a wake-up call for the maritime industry, highlighting the profitability potential of ocean shipping. Between 2021 and 2022, ocean carriers collectively earned over $400 billion, approximately ten times their combined operating profit from the previous decade. Although profits have since moderated, the most recent quarter still saw ocean carrier earnings of $17 billion, a sevenfold increase from the same period last year.
Future Outlook The Port of New York and New Jersey’s ambitions reflect broader industry dynamics, as ports worldwide seek to maximize revenues and attract investment. With its increased focus on securing higher rents, revenue-sharing agreements, and infrastructure commitments, the port is positioning itself as a leader in adapting to the evolving landscape of global trade.
As trade volumes continue to grow and geopolitical factors influence global shipping routes, the port’s strategic initiatives will play a pivotal role in maintaining its competitiveness and relevance in the maritime industry.
