lease agreement

Amended Lease Agreements Pave Way for Port Improvements

The Port Authority of New York and New Jersey Board of Commissioners has voted to amend existing leases with Global Container Terminals Inc. (GCT) for container terminals at the agency’s Staten Island and Bayonne marine facilities in light of the acquisition of the two terminals by the French shipping company CMA CGM, paving the way for facility improvements and increased capacity to move containerized cargo through the Port of New York and New Jersey’s facilities on Staten Island and Bayonne.

The amended leases allow one of the world’s largest shipping companies to assume operations at GCT’s container terminal at the Port Jersey-Port Authority Marine Terminal in Bayonne, known as GCT Bayonne, and at GCT’s container terminal at the Howland Hook Marine Terminal on Staten Island, known as GCT New York. CMA CGM announced its intent to acquire GCT’s assets in New York and New Jersey in December 2022. The updated leases include increases in rent based on container throughput, CMA CGM assuming full responsibility for wharf and berth repair and replacement, and substantial facility investments to increase container capacity.

“This lease agreement marks the beginning of a new chapter at two of our key container terminals,” said Port Authority Chairman Kevin O’Toole. “We look forward to working with CMA CGM as these facilities reach their full potential, bringing even more jobs and economic growth to power the region.”

“We welcome CMA CGM as a key partner in the operation of two of our marine terminals, and look forward to working closely with CMA CGM in the future vigorous development of our seaports,” said Port Authority Executive Director Rick Cotton. “This deal with CMA CGM reflects the trust and confidence of our business partners in our port’s ability to move cargo efficiently and reliably.”

As part of the amended agreements, CMA CGM will pay increased rent based on container throughput, subject to a minimum annual guarantee, and will share revenue from excess container storage. Additionally, CMA CGM will assume full responsibility for maintaining and rebuilding wharf and berth structures, as well as increasing capacity to meet demand, at both facilities.

CMA CGM will align with key Port Authority initiatives relating to sustainability and diversity. Specifically, CMA CGM has committed to the Port Authority’s goal of achieving net-zero greenhouse gas emissions by 2050, including upgrading to zero-emissions material handling equipment and promoting renewable energy. CMA CGM has also committed to contracting goals for minority-owned, women-owned, and service-disabled veteran-owned businesses, and to maximizing the use of locally owned businesses.

CMA CGM will collaborate with the Port Authority around priorities such as safety and security, innovation, customer experience, key performance standards, and enhanced reporting on terminal activities.

The Port Authority has had a longstanding relationship with CMA CGM, welcoming the CMA CGM Brazil to a terminal in the Elizabeth-Port Authority Marine Terminal in 2020 as the largest container ship ever to call on the port and the U.S. East Coast. CMA CGM’s 14,000-TEU capacity T. Roosevelt was also the largest container ship to call at the port in September 2017 after the Port Authority completed the raising of the Bayonne Bridge’s roadway to allow higher navigational clearance through the Kill van Kull for the world’s largest container ships seeking to access the port’s New Jersey and Staten Island facilities.

Terms of the lease amendments are effective pending the successful acquisition of assets between GCT and CMA CGM. The amended container terminal lease agreements will further bolster the seaport’s position as a vital gateway for imported goods in the United States, where it is the first port of call for the vast majority of container ships arriving to the East Coast from overseas. Both marine facilities are connected to the Port Authority’s on-dock ExpressRail intermodal network, which are served by two major freight railroads with links to destinations up and down the East Coast, eastern Canada, and the U.S. Midwest.

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