Port tenant accuses PANYNJ of preferential treatment

A Federal Maritime Commission complaint lodged by Port Elizabeth Terminal & Warehouse alleges the port is asking the company to vacate hundreds of thousands of square feet of warehousing space in order to help a competitor expand.    Port Elizabeth Terminal & Warehouse Corp. has filed a complaint with the U.S. Federal Maritime Commission (FMC) against the Port Authority of New York and New Jersey (PANYNJ), alleging that the port is biased against it and has given preferential treatment to other marine terminal operators.
   The feud, which rose to a new level with the July 26 written complaint to the FMC, revolves around hundreds of thousands of square feet of warehouse space that the warehousing company says the port wants it to vacate in order to help a competitor expand.
   Port Elizabeth Terminal & Warehouse Corp., which has leased space at NY/NJ for 42 years, said in its complaint that on multiple occasions in the past three years, including in November 2015, March 2015 and December 2014, it adhered to the port authority’s request that it vacate a total of about 550,000 square feet of warehouse space for various reasons, including for sprinkler repairs, the creation of more room for vessel receiving, and to allow for the expansion of the competing Port Newark Container Terminal.
   And as a result of these actions, the warehouse company has said, it incurred millions of dollars in relocation expenses with the understanding that it would be able to reach an agreement with the port authority regarding “alternative suitable marine terminal facilities at reasonable rates.”
   However, Port Elizabeth Terminal & Warehouse Corp. is now saying that the authority’s current request – that the company give up another 312,000 square feet of warehouse space to allow for the aforementioned PNCT terminal expansion – has imposed an “undue disadvantage” and has given preference to other marine terminal operators at the Port of New York and New Jersey.
   The complainant alleges that the port authority’s requests to vacate warehouse space and alleged favoring of another marine terminal operator violate clauses in the Shipping Act that forbid ocean carriers and marine terminal operators (including port authorities) from showing any undue or unreasonable preference or advantage, or from giving any unreasonable prejudice or disadvantage to tenants.
   The warehouse company alleges that PANYNJ “has unreasonably refused to deal and negotiate with” it and that it also “has failed to ‘establish, observe, and enforce just and reasonable regulations and practices relating to or connected with receiving, handling, storing, or delivering property.’’’
   As a result, Port Elizabeth Terminal & Warehouse Corp. is requesting that the FMC issue an order commanding the port authority “to cease and desist from the aforementioned violations of the Shipping Act,’’ plus requests reparations and other relief.
   A quick resolution is not expected, however.
   The FMC, which assigned the proceeding to the Office of Administrative Law Judges, has said that an initial decision by the proceeding’s presiding officer is expected no later than July 26, 2018, and that a final decision by the commission isn’t expected until Feb. 11, 2019 at the latest.