Cargo industry suffers huge losses in wake of storm

Bart Jansen, USA TODAY | USATODAY

Superstorm Sandy caused an estimated $1 billion in damages to the cargo industry in the Northeast, which is still struggling, an international consultant said Friday.

The Port of New York and New Jersey's maritime container terminals remain closed and ships have begun diverting to other cities. But trucking companies and railroads are restoring service to the region, and federal officials are prepared for cargo diverting to other ports.

Charles Clowdis, managing director for transportation and consulting services at IHS Global Insight, says the estimated costs include labor and maintenance for trucks and trains that still aren't moving through the flooded area and businesses that remain shuttered for lack of power.

"It looks like we're losing close to $80 million a day on that," Clowdis says. "Through yesterday, we have probably lost close to $1 billion on cargo delays."

Blocking cargo threatens the entire economy because manufacturers and retailers increasingly rely on shipments for their business operations, rather than warehousing material.

Airlines have been slowly resuming service after canceling more than 20,000 flights because of the storm that swamped New Jersey and New York earlier in the week.

But the giant Port of New York and New Jersey, which averages 234,000 tons of ocean-borne cargo a day, remains closed since evacuating maritime facilities by noon Monday. Engineers are inspecting port facilities for damage and repair work, with a goal of ensuring the safety of workers.

The waterways have mostly reopened, except for a few areas around Arthur Kill south of the Goethals Bridge, and Bay Ridge and Red Hook channels, according to Justin Ward, spokesman for the Army Corps. A shoal was found on one side of Sandy Hook channel, he says.

Commercial vessels aren't yet allowed to wait for the terminals to reopen. "If you don't have an approved berth, you can't come in and sit for a week and wait for something to open," Ward says.

Ocean shippers are rerouting ships to other East Coast ports, such as Philadelphia. For example, Evergreen Marine, a shipping company based in Hong Kong, told customers Friday that it would steer vessels to Baltimore or Norfolk until the New York port resumes normal operation.

Kevin McAleenan, acting assistant commissioner of customs and border protection, says the agency is prepared to handle more cargo at other ports because of the high volume of shipping expected with the approach of the holidays.

"We're prepared for the additional traffic," McAleenan says. "The global supply chain will not stop – it will find a way to divert cargo that would have been destined to Newark to other seaports on the East Coast."

Trucking companies and railroads are restoring service with some backlogs of deliveries.

CSX Corp. has fully restored rail service in the Northeast, although trains continue to operate slowly because of commercial power outages and other issues, the company said in a statement. Customers should continue to expect delays of at least 72 hours for traffic operating near or through the region, the company says.