Sandy Poses Risk For New York/New Jersey Forecast
BMI View: BMI believes Hurricane Sandy, the storm that recently battered the US northeast - and particularly its coastal regions - could lead to a revision of our throughput forecasts for East Coast facilities. The Port of New York/New Jersey was the worst affected, and was closed for a number of days. Other facilities are poised to benefit from the run-off of vessels.
Hurricane Sandy struck land on the US East Coast on the evening of October 29. The storm was a cross between a category-one hurricane with a nor'easter which resulted in an unprecedented storm-surge over US cities, including New York. The storm travelled at speeds of up to 30 miles per hour (mph), with sustained winds of 90mph and gusts of up to 115mph; these winds were accompanied by rising tides and heavy rains.
On November 5, the day of writing, the terminals of the Port of New York/New Jersey were scheduled to reopen after having been closed since October 28. According to the Maher Terminals, the operator of the largest container terminal at New York/New Jersey: 'The entire Port has sustained devastating damage and flooding.' The port was still without electrical power on November 2; roads had been covered with debris and the rail track had been damaged.
|Downside Risk To Forecast|
|Port of New York/New Jersey TEU Throughput|
BMI notes that the disruption offers downside risk to our throughput forecasts for the Port of New York/New Jersey. With the port's terminals having been closed for a week container-carrying vessels will have been forced to divert away from the facility. The effect might even last longer, with vessels having already rerouted to other ports rather than waiting to see if New York/New Jersey would be open. As this is traditionally the busiest time of year for US ports, as inventories are ramped up in preparation for the holiday period, this could affect the port's year-end throughput levels. We currently forecast that 2012 will see throughput of 5.68mn twenty-foot equivalent units (TEUs), which would represent growth of 3.2%. Once the monthly figures for October and November have been released it will be clearer whether or not the storm has thrown our forecasts out, necessitating a downwards revision.
While the Port of New York/New Jersey will have seen its throughput negatively impacted by Sandy, other East Coast facilities have benefited from the storm, in terms of throughput volumes at least. With New York/New Jersey out of operations for seven days vessels have been rerouting to ports such as Halifax in Nova Scotia, Canada, and the Port of Virginia. According to Ashley Dinning, CEO and managing director of the Halterm Limited Container Terminal in Halifax, volumes at the port tripled as a result of the storm. The extra business has been such that employees have been working extra shifts, with some people brought out of retirement to do work.
At the Port of Virginia, vessels that don't usually call at the port were forced to offload there over the past week - namely the APL Indonesia, which offloaded over 1,000 TEUs, and the ro-ro vessel the Prestige, which discharged 1,300 vehicles at the Newport News Marine Terminal. Rail services from the port have been running round the clock in order to ensure that volumes bound for the northeast can reach their destination as quickly as possible.