The Port of New York and New Jersey has six container terminals covering 1,340 acres, two airport freight operations and a rail and inland distribution network reaching the largest consumer base in the United States. It is one of the busiest in the world and is constantly adapting to new circumstances. While many take the scale of activity for granted, the numbers are staggering; each day, $557 million of goods move through the port, and 8,800 containers – by and large carrying imported goods from top trading partners such as China, India, Germany and Italy – are unloaded.1  In many ways, the port is the physical manifestation of the U.S. trade deficit – totaling $36.44 billion in 2016 – and its shift to a $13 trillion consumer economy that has only accelerated since World War II, barring the Great Recession in the late 2000s.2  We have long had many clients who use the port to import and export various physical commodities, and in many ways, the port and Brown Brothers Harriman have a shared history with common roots in the early stages of this country’s international trade.

Before delving into the past and prologue of the Port of New York and New Jersey, we begin with the story of a bridge connecting Staten Island, New York, and Bayonne, New Jersey. The Bayonne Bridge, currently the fourth-longest steel arch bridge worldwide, was the largest of its kind for 45 years after construction finished in 1931. Built for the tallest ships at the time, the bridge’s clearance of 151 feet above water was fully functional for the Port of New York and New Jersey’s maritime activity over the course of 80 years. Today, the most pressing initiative facing the port is “Raise the Roadway,” a project dedicated to bringing the clearance to 215 feet in order to accommodate neo-Panamax vessels. These vessels are at the forefront of modern shipping after the Panama Canal expansion completed this past June, allowing ships 366 meters long and 49 meters wide that carry 13,000 twenty-foot equivalent units (TEUs) to pass through, compared with ships of 294 meters long and 32 meters wide that carried 5,000 TEUs previously.3 This project is the last upgrade needed to allow these larger ships to call on the Port of New York and New Jersey and add to the cargo volume of the East Coast’s largest port and North America’s third-busiest container port, after the Port of Los Angeles and the Port of Long Beach. More than $200 billion of total cargo moved through the port in 2015, and container volumes have been on the rise since 2009, according to the Port Authority of New York and New Jersey.


The Port of New York and New Jersey has weathered changes in maritime trade patterns, shipping technology and consumer demands throughout its history, but its adaptability and forward-looking approach have remained consistent. To understand the port’s continued success and growth, it’s helpful to look back at its history and how it overcame various challenges over the years.

The Port’s History

At the turn of the 19th century, the Port of New York had the same trading volume as the other main ports, such as New Orleans, Baltimore, Philadelphia and Boston. Boston was the United States’ busiest port due to its established marine history, while New York was still adjusting to trading goods originating from the colonies after being the only major city controlled by the British throughout the Revolutionary War. In 1820, Boston and New York each exported around $12 million of goods, but by 1840, the Port of New York handled more passengers and cargo than all other ports in the country combined.4  The reason for New York’s arrival was the “cotton triangle,” a newly formed trade between the Southern states, New York and Europe that made New York’s port the consolidation and distribution center for the entire country. Cotton and tobacco from Southern farmers were shipped by the Ports of Baltimore or New Orleans to New York, and ships returned to the Southeast carrying manufactured goods from Northern states. U.S.-grown commodities traveled across the ocean from New York to Europe, and imported goods returned to the port for ultimate delivery throughout the country.

There were two interrelated reasons why New York became the hub for the cotton triangle: developments in marine technology and the city’s geographic advantages over other ports. The first steamship, built in 1808, allowed goods to travel quicker and cheaper on Western rivers to the interior U.S. markets than by wagons carrying goods over land. With the Erie Canal’s 1825 completion, the Port of New York benefited from the new steamship transportation method by giving Western farmers and traders access to New York markets, which served as a consolidation point for other East Coast and European markets. For example, wheat grown in Indiana could travel by steamship across the Great Lakes, through the Erie Canal and down the Hudson River to New York, where it could be exported to England.

Following the advent of steamship transportation, the next important development of the 19th century was larger ships built with greater cargo capacity and stability for transatlantic voyages. This led to the smaller ships, previously used for these trips to Europe, pivoting toward the transport of goods along the Eastern seaboard. The industry was seeking economies of scale to be gained from having a single consolidating location where smaller vessels could load cargo onto bigger ships making the intercontinental trip, and the Port of New York’s geological advantages made it the obvious choice.

While New York continued to gain steam, it was not without competitors. However, it had some clear geological advantages relative to its competition. For example, the Port of Philadelphia lacked direct access to the ocean, making it a more expensive option compared with New York because of additional inland shipping costs. The Port of Boston connects to the Atlantic Ocean, but its harbor freezes in the winter, and the increased trade volumes throughout the century required a fully functioning port year-round. Yet New York’s biggest geological advantage was simply its central location between New England’s textile manufacturers, anthracite coal miners of Philadelphia and Southern cotton and tobacco growers. New York was an easy compromise for all markets when looking for a major port between two key output areas that could handle the trading volume. By 1870, the Port of New York grew to be the busiest in the Western Hemisphere, and this was just the beginning of its leadership in the maritime community.

Until the early 1900s, the main berths for shipping goods were mostly in Manhattan or Brooklyn, while the freight lines with access to the rest of the country were in New Jersey. Barges made many trips every day to bring cargo between the two states for switching between ship and train transport, and this created many disagreements around the states’ jurisdictions and boundaries. On April 30, 1921, in a compromise with far-reaching historic consequences for the U.S. maritime industry, the Port Authority of New York (renamed the Port Authority of New York and New Jersey in 1972) was created to set aside the two states’ own interests and do what was best for the public. This was the first agency to be formed under an interstate compact, and as the demands on the Port of New York and New Jersey progressed, this unity proved to be the sine qua non of the port’s modern growth.

One of the biggest technological advancements in the history of maritime trade is the transition from break bulk to containerized shipping. Until the mid-20th century, all cargo was break bulk, meaning it had to be individually loaded. Today, meanwhile, the majority of cargo is shipped in intermodal containers. Again, the Port of New York adapted to this seismic shift in transportation by making smart investments in anticipation of future change. The Port of New York and New Jersey played a historical role on April 26, 1956, when the world’s first container ship, the SS Ideal X, set sail from Port Newark toward Houston. The vessel had been installed with slots on the main deck for 58 containers, and the containers were then loaded onto trucks upon arrival in Texas one week later.

The Port Authority’s foresight into how containerized and intermodal shipping would change maritime trade led the agency to build the first specialized container terminal in Elizabeth, New Jersey, in 1962. After dredging the shipping channel between Newark, New Jersey, and Elizabeth at significant outlay, the terminal was constructed south of the new Elizabeth channel. It was called the Sea-Land Container Terminal and drastically reduced trade traffic coming to New York because of the economies of scale and lower handling costs afforded by containerized shipping. This terminal was truly pioneering, with its design influencing almost all container terminals built since. As of 1985, the Port of New York and New Jersey was the world’s busiest container port and still maintains a large role in international trade as the third-busiest container terminal in North America and the 26th-busiest in the world.


According to Forbes, almost 80% of all cargo imported into the Port of New York and New Jersey is used by customers within 100 miles. With many companies employing lean inventory methods through just-in-time delivery, this meant the port’s intermodal transportation infrastructure must support moving large volumes off vessels and onto other forms of transportation under strict time constraints. To address this, the Port Authority began building a rail network called ExpressRail in the early 2000s, starting with the Elizabeth Marine Terminal. Today, freight infrastructure has been built for three terminals, with rail lines for a fourth terminal undergoing construction. The port’s partnership with three Class I railroads (the largest operating systems, in terms of revenues, throughout North America), when supplemented by the largest trucking fleet on the East Coast, allows the Port of New York and New Jersey to bring imported cargo to 100 million consumers within 36 hours, according to the Port Authority of New York and New Jersey. This ability to quickly provide a large scale of goods to a big consumer market is the port’s competitive advantage, but as maritime trade evolves, this is being challenged.

The Port’s Future

The most anticipated project for the Port of New York and New Jersey, which has been years in the making, is preparation for neo-Panamax vessels. The largest vessels currently calling on the port have a capacity of 10,000 TEUs, but neo-Panamax vessels allow up to 13,000 TEUs. To remain competitive, the Port of New York and New Jersey will have to ensure that its waterway infrastructure can meet the demands of these gargantuan ships.

The Port of New York and New Jersey handled 6,371,720 TEUs in 2015, but year-to-date statistics for total TEUs handled as of September 2016 are behind last year’s by 3.5%.6 On the other hand, Baltimore, Norfolk and Miami have increased their total TEUs handled by an average of 3.3% year to date compared with last year’s activity.7  These are the only three ports on the East Coast ready to accept the bigger vessels, and their improved waterway infrastructures have allowed them to take advantage of the additional TEUs on neo-Panamax ships. It is concerning that the Port of New York and New Jersey is losing container traffic and market share, especially on the East Coast, where it has long been the dominant port. When year-end trade statistics are published, it will only put more pressure on the port to become neo-Panamax vessel-ready.


The first part of the Port of New York and New Jersey’s preparation was the dredging from 45 feet to 50 feet, which was a $2.1 billion project completed in late August 2016. The dredging of the New York Harbor was actually authorized and started in 2004 at an original total cost estimate of more than $2.9 billion. This phase of the project involved 20 dredging contracts on 52 million cubic yards of material at the bottom of the channel, and this dredged material was used in marsh, fishing reef and landfill restoration projects.8  The dredging’s completion has cleared the waterways for neo-Panamax vessels from the Atlantic Ocean through the New York Bay and to the port’s biggest container terminals in New Jersey.

The second part of the port’s preparation is the main roadblock, and its delay is becoming more impactful each day. The Bayonne Bridge’s clearance must be increased by an additional 60 feet in order to let neo-Panamax ships pass through. The $1.3 billion project was estimated to be finished this year, but engineering miscalculations and construction work slowed by rough weather during winter 2014 have pushed back the estimated completion date to late 2017.9  As it is now, neo-Panamax vessels can only dock at the Global Terminal, since it is located before the Bayonne Bridge. The port’s four main container terminals lie past the bridge, and this makes the project’s completion critical to the port’s continued growth and battle for market share.

Changes in the commodities coming through the Port of New York and New Jersey and the emergence of high-growth trading partners also play a large role in the port’s future. Vietnam is becoming an important country in international trade for the port, with imports and exports showing 28.2% and 46.9% year-over-year growth in 2015, respectively.10  The most common goods exchanged were furniture and apparel arriving from Vietnam and soybeans and wastepaper shipped to the East Asian country. Besides Vietnam, the port is expected to increase trade with other Asian markets, and this trend applies to all ports on the East Coast ready to receive neo-Panamax vessels.


The East Coast as a whole is predicted to attract imports of Asian cargo that formerly would have been destined for the West Coast, because the new Panama Canal width makes East Coast ports more favorable for distribution to United States’ Eastern and Midwestern markets.11  In order to reach these interior U.S. markets, Asian cargo still has to be transported by truck or rail from coastal ports, but the upgraded Panama Canal now provides either lower or similar delivery times and transportation costs to Midwest markets from the East Coast compared with the West Coast. In terms of trade flow back to Asian markets, exports from the U.S., in the form of liquefied natural gas and grains, are anticipated to increase, as demand for these goods is rising in many growing Asian countries. As the East Coast port with the largest consumer base and a history of exporting goods like natural gas and grains from the interior United States, it’s logical to assume that the Port of New York and New Jersey will benefit significantly from this increased trading volume with Asian countries; however, this will only be possible when the Bayonne Bridge is raised and the port deemed ready for neo-Panamax vessels.


The Port of New York and New Jersey has helped build the surrounding area into the maritime, financial and cultural center of the world that it is today due to the global recognition New York gained from the amount of people and goods that passed through the city starting in the 1800s. With initiatives and investments in expanding the port’s capacity, reach and services, the Port Authority appears poised for new trade flows and shipping patterns.
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1 Source: The Port Authority of New York and New Jersey, “2015 Trade Statistics,” January 2016.
2 Source: Trading Economics, “United States Balance of Trade,” November 2016.
3 For more information on the recently expanded Panama Canal, see the September 2016 Commodity Markets Update article, “Panama Canal Update: Too Narrow for ‘Neos’?
4 Source: Glaeser, Edward I. "Urban Colossus: Why Is New York America's Largest City?," FRB New York - Economic Policy Review, 2005, v11(2,Dec), 7-24.
5 Ibid.
6 Source: The Port Authority of New York and New Jersey, “Loaded Containers in TEUs and Total ExpressRail Lifts by Month,” October 2016.
7 Source: Maryland Department of Transportation Port Administration, “Maryland Port Administration General Cargo,” October 2016; Virginia Port Authority, “Port Stats,” October 2016; Port Miami, “Cargo,” October 2016.
8 Source: The Port Authority of New York and New Jersey, “New York and New Jersey Harbor Deepening Navigation Program,” September 2016.
9 Source: The Port Authority of New York and New Jersey, “Bayonne Bridge: ‘Raise the Roadway,’ June 2016.”
10 Source: The Port Authority of New York and New Jersey, “2015 Trade Statistics,” January 2016.
11 For more information on changes to East Asia-U.S. trade routes, see the December 2015 Commodity Markets Update article, “Redrawing Global Shipping Routes: The Panama Canal Gets an Upgrade.