Congestion Pricing: NYC’s Food Distribution Network Feels the Squeeze

By Seth Gottlieb and Margaret Magnarelli

The numbers are in from the first few weeks of New York City’s congestion pricing program, and they paint a troubling picture for the local food system in the nation’s most populated region.

At Baldor Specialty Foods, we transport millions of pounds of produce, dairy, grocery, meat and fish to restaurants, hospitals, schools, grocery stores and corporations in the zone each year, with more than 1,000 customers below 60th Street.

Every truck entering Manhattan, at or below 60th Street, faces substantial daily charges of $14.40 a pop. These costs add up quickly. Based on the numbers from the first few weeks, our company is looking at additional costs of $300,000 to $400,000 annually. This is a significant hit to our operational budget.

We’re not alone. As part of the NYC Food Distribution Alliance — now representing more than 200 New York City-based food businesses, including Fresh Direct, Chefs Warehouse, Fulton Fish Market Cooperative, Hunts Point Meat Market, Hunts Point Produce Market, Manhattan Fruit Exchange, LP Seafood & Specialty, DeBragga, Victory Food Service, Regalis and more — we’re hearing similar stories across our industry.

These aren’t just statistics. They represent real costs that affect real local businesses and their constituents all along the supply chain. Many businesses within our coalition cannot absorb this cost and are forced to pass the fee to their customers or increase pricing. Ultimately, that means small businesses, like restaurants and bodegas, see their costs rise, and they, too, find themselves with no other option but to pass on the added cost to end consumers. Those end consumers represent anyone living in, working in or visiting the zone who eats. Period.

Every plate of food served in Manhattan restaurants, every piece of produce in grocery stores, and every meal in school cafeterias depends upon trucks. There’s no alternative method to a truck for getting fresh food into the city — good luck trying to move produce, meat, and fish on the subway — and 99.9% of food eaten in NYC comes from outside the congestion zone.

Also among the members of our coalition are several nonprofits affected by this policy, including Food Bank for New York City. For organizations working to combat hunger, added costs are more than an inconvenience. They hamper the fight against food insecurity, as every $1 in extra cost can mean five meals lost.

Based on the NYC congestion pricing numbers from the first few weeks, our company is looking at additional costs of $300,000 to $400,000 annually.

To be clear, we fully understand and support the goals of reducing traffic congestion and improving air quality in Manhattan. But the current policy fails to recognize that food distribution isn’t optional — it’s critical infrastructure. It also fails to recognize that limiting New Yorkers’ access to healthy food could undermine other public health goals, like curbing diet-related diseases. Food needs to be treated as an essential service.

Our message to Gov. Kathy Hochul and the New York Legislature is simple: We know you care about New York’s small businesses and working families. That is why we are asking you to create a commonsense exemption for essential food distributors based within the five boroughs so the congestion pricing program doesn’t hurt those you are working so hard to protect.

This isn’t about avoiding our civic responsibility — we’ve long been supporters of environmental initiatives and have been paying significantly every year to support public transportation through the Metropolitan Commuter Transportation Mobility Tax. It’s about recognizing that local food distribution is as essential to city life as utilities or public transportation.

It’s about recognizing that charging essential food distributors these fees ultimately hurts the very New Yorkers you’re working to protect. Let’s work together to find a solution that maintains our vital food distribution network while supporting the city’s environmental goals.

To our fellow industry members: We need your voice in this fight. If you live in New York, please reach out to your elected officials and urge them to protect New York City’s food supply from congestion pricing.

Whether you’re a distributor, wholesaler or retailer, your support matters. The future affordability of food in New York City and in the other major metropolitan cities that will follow depends on getting this policy right.

Seth Gottlieb is SVP of logistics at Baldor Specialty Foods. Margaret Magnarelli is vice president of marketing and communications at Baldor Specialty Foods.