Buckley McAllister, President of McAllister Towing & Transportation, weighs in on the coronavirus pandemic and its impacts on the maritime sector.
McAllister Towing & Transportation is a long and storied organization based in New York, the original U.S. COVID-19 hot spot that has been transformed from the city that never sleeps into a surreal ghost town. Describe the view from your perspective.
All McAllister administrative personnel who can work from home are doing so. Luckily, most office personnel do most of their work online, so the need for actual visits to the office are infrequent. The crazy thing about lower Manhattan these days is being able to park on the street.
Of course, boats cannot run themselves. The Port of New York and New Jersey is blessed with great teamwork and real professionals. Everyone had had plenty of opportunities to work together in difficult times. U.S. Coast Guard Sector New York, Customs and Border Patrol and the Maritime Administration (MARAD) have done great jobs holding stakeholder meetings and escalating issues that arise in order to keep the ports operational.
The big issue going forward is simply the economic recession that the entire world is facing.
From your vantage point, put in perspective how this global virus has impacted the maritime market as a whole.
Not to minimize the tragedy of the pandemic, but less than 5% of the population in New York is confirmed to have contracted the coronavirus, and deaths have been a small percentage of the population. We have only been able to confirm four coronavirus cases among our employees, each of which has turned out to be an isolated case so far. The most impactful aspect of the crisis for the maritime sector has been the economic impacts on trade. Hardest hit have been cruise ships, passenger ferries and commuter services. Cruise ship operators have completely shut down. The Passenger Vessel Association estimates that ferry operations have lost 90% of their business and may lose $3 billion dollars in 2020.
How, specifically, has it impacted your company?
It is not good. Every business in the maritime transportation system is experiencing a drop in revenue. The reduction in the volume of our work is requiring us to defer development projects and focus on maintaining core business lines. There have been numerous public announcements about ocean carriers cutting back on capacity. Unfortunately, our intermediate and long-term planning needs to focus on how to address a drop in overall trade.
One silver lining of the coronavirus pandemic has been the opportunity to be part of the team supporting our home communities. Our tugs assisted the USNS Comfort into Manhattan. The ship received great fanfare. The Comfort has departed to return to her home berth, and while its role in the response was a little more muted than anticipated, hundreds of people were treated on the ship and it no doubt saved lives.
The Capt. Brian A. McAllister leads the way for the USNS Comfort into NY Harbor as she passes the Statue of Liberty on March 30, 2020. (Photo: Max Guliani)
As a transport sector, maritime has never really gotten its due compared to air, road and rail. But this event highlights the importance of maritime as an enabler of commerce. With that as a backdrop, what is the one takeaway on maritime you hope that legislators or the general public understand?
Airlines and small businesses have had their own government assistance programs. Many of the programs put in place have been aimed at assisting small businesses to keep personnel employed. These programs are not of much help to organizations whose costs are largely building, maintaining and fueling the critical maritime infrastructure that moves 90% of everything.
While many organizations discuss planning for a black swan event, I would argue that very few could have projected the depth and breadth that the COVID-19 pandemic reach. That said, looking at your organization, how were you best prepared for this event?
I have the benefit of working with some of the finest professionals in the maritime industry. Our crews have consistently risen to the occasion of any crisis, from hurricanes to 9/11. Our personnel have delivered unsurpassed service to our customers throughout the pandemic. We maintain close communications with the U.S. Coast Guard and other agencies. Our partners in government were quick to recommend protocols for protecting mariners from exposure to the virus, and we were quick to adopt protocols through our quality and safety management System. For the most part, government agencies have also been committed to maintaining a fully operational posture for the marine transportation system to support our communities. Issues that arose were rapidly escalated, with the help of groups like the Maritime Association of the Port of New York and New Jersey, American Waterways Operators, the Passenger Vessel Association and the Offshore Marine Service Association.
When the smoke clears and there is a return to normalcy, what areas will you strengthen to prepare for the next event of this magnitude?
I think that the most important thing that we can do is to take care of our people. With reductions in work, we have had to furlough personnel, both on vessels and ashore. We have done our best to keep people on health care benefits and make sure that they keep their licenses and certifications. Our employees are critical to keeping maritime commerce moving safely and securely.
Four McAllister Towing tractor tugs guide the hospital ship USNS Comfort into her berth at Pier 90 in Manhattan on March 30, 2020. (Photo: David Rider)