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Regional Strategy for Location of Distribution Facilities in NORTHERN NEW JERSEY

MOFFATT & NICHOL. E N G I N E E R S. Regional Strategy for Location of Distribution Facilities in NORTHERN NEW JERSEY. Talking Freight Workshop Presentation May 19, 2004. OBJECTIVE.

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Regional Strategy for Location of Distribution Facilities in NORTHERN NEW JERSEY

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  1. MOFFATT & NICHOL E N G I N E E R S Regional Strategy for Location of Distribution Facilities in NORTHERN NEW JERSEY Talking Freight Workshop Presentation May 19, 2004

  2. OBJECTIVE Link Transportation Efficiency with Local Economic Development derived from the movement of foreign and domestic cargo flows through the region’s major intermodal facilities, while reducing truck VMT through the region. Thus enhancing the NJTPA REGION AS A GATEWAY TO THE GLOBAL MARKET

  3. A MAJOR ENGINE OF REGIONAL ECONOMIC DEVELOPMENT The NY/NJ/CT Tri-state Metropolitan Region is the largest Consumer Market on Earth. The movement of freight generates a demand for advanced distribution facilities capable of performing value-added services. This is a growth market linked to the future expansion of foreign trade through the PONYNJ.

  4. NORTHERN N.J.’s HOTTEST FUTURE REAL ESTATE MARKET OR MEGAMALLS Distribution Center = Key Land Use to the New Economy Mastodon : Extinct animal

  5. 50 Foot Channels 40-45 channels Growth Forecast for Port Of Port Of New York and New Jersey TRENDS: a) 2000 to 2001 cargo volumes increased by 8.7% to 3.32 million TEUs b) First 9 months of 2002 increased by 8.5% over previous year c) In last two years cargo volumes have increased greater than forecasted

  6. 10-State Market Area Landbridge PONYNJ Algeciras Gioa Tauro LA/LB Kobe Today: 6% 2020: 13% Jiddah Hong Kong Kaohsiung Today: 80% 2020: 73% Colombo Singapore DIVERSION OF WEST COAST ASIA TRADE TO EAST COAST PORTS Channel deepening/large container vessels/capacity constraints for transcontinental rail landbridge will cause shift in shipping patterns Shift 2.5 million TEUs: from West-Coast Ports to PONYNJ by 2020

  7. Geographic Distribution of 1998/99 Containerized Trade within 17 State Market Area C A N A D A Montreal Ottawa Newark, NJ Houlton, ME Saint Albans, VT REGION POPULATION Toronto Ogdensburg, NY % of Total Number 103,885,761 38.40% Halifax Buffalo, NY Detroit, MI Chicago, IL Cleveland, OH GROSS STATE PRODUCTS % of Total Millions of Current US$ 75 mile Boston, MA 3,349,934 41.3% New York, NY 200 mile ATLANTIC OCEAN 300 mile % of Total Baltimore, MD TEU’s Port of NY & NJ 6,901,512 39% 400 mile TOTAL CONTAINERIZED* TRADE Source : Moffatt and Nichol Engineers, Based on adjusted PIERS data

  8. NJTPA REGION LOCATION MAP WITH HIGHWAY AND RAIL NETWORK Newark Newark Airport Bethlehem PA PONYNJ 75 miles • Legend • US Route • NJ Interstate • Railroads • NJTPA Region

  9. ROUND TRIP TRUCKING COST (1) FROM EPAMT (LOADED 1st LEG, 85% EMPTY 2nd LEG)--1999 New York Connecticut Pennsylvania PONYNJ 75 mile radius New Jersey Notes 1. Truck operational costs ($1.31/mile loaded) were calculated by amortizing Vehicle Depreciation; Insurance; Fuel Costs; Driver Wages; and Overhead and Profit on a per mile basis 2. Minimum cost for trip, even if less than 1 mile Legend Mileage Cost Ranges $10 (2) to $30 $30 to $60 $60 to $90 $90 to $120 $120 to $193

  10. Containerized Cargo from Asia Consumer Retail Store EAST COAST WAREHOUSE TRENDS TRADITIONAL STORAGE WAREHOUSE SYSTEM Container Terminal Container Trucking Public Warehouse Regional Trucking Regional Warehouse • Trade-off between economies of size versus land price • Definitive trend to relocate beyond 100 mile radius • Little demand with 75 mile radius

  11. Local Components Containerized Cargo from Asia Private Home Container Terminal Container Trucking Value-Added Distribution Center Private Home Third Party Shipper (UPS, FedEx, etc.) Private Home Internet Fulfillment WEST COAST WAREHOUSE TRENDS CONSUMER DISTRIBUTION SYSTEM

  12. WATSON INDUSTRIAL CENTER P.V.A

  13. MOFFATT & NICHOL E N G I N E E R S DISTRIBUTION CENTER ACTIVITIES Old Style Dist. Evolution to More Complex Process. Traditional Warehouse Just-in-Time Distribution Center Retail Distribution Center Consumer Distribution Center • Basic Services • Storage • Transloading • Customs • Foreign Trade Zone • Freight Forwarding • Trucking • Value-Added Services • Logistics • Barcoding • Sorting/Labeling • Marketing Materials • Scanning • Repacking/Pick & Pack • Kitting • Packaging Design & Manufacture • Manipulation • Repair • Internet Fulfillment • Special “Piece” Manipulation X XXXXX XXXXXX XXXXX X X XXXXXXXXXX X X X X X XXXXXXXXXXXX

  14. Dedicated Freightway and ITS Systems Architecture PONYNJ NJTPA REGION Container Yard Major Rail or Direct to Market Value-Added Distribution Center NJTPA - “STRING OF PEARLS”

  15. STRATEGY: LOWER VMT/AID PORT THE NEED: REGIONAL VALUE-ADDED DISTRIBUTION CENTERS NEAR PORT AND MARKETS • Size : 50 to 150 acres… Phased Development • Planned Unit Development (PUD) • Employees : 500 to 3,200 • Foreign Trade to Domestic Ratio : 60/40 or100,000-250,000 TEUs/yr. • Activities : • Transloading • Distribution Center • Drop-Shipping • B2B and B2C

  16. DEMAND FORECAST FOR DISTRIBUTIONCENTERS IN NJTPA REGION 2000-2040 2000-2010 150 2010-2020 500 T I M E P E R I O D 900 2020-2030 1400 2030-2040 0 100 200 300 400 500 600 700 800 900 1000 1100 1200 1300 1400 ACRES Absorption rate of 35 acres/yr for next 40 years

  17. KEY BROWNFIELD SITES Portway Corridor Overview Phase I Portway Alignment Brownfield sites Portway Alignment And Brownfields Figure 1

  18. NJTPA VALUE-ADDED DISTRIBUTION CENTER LOCATION CRITERIA • Capable of being linked to the port’s maritime container terminals by weight-unrestricted, preferably on dedicated freight-ways; • Direct access to network of interstate highways; • Situated within Foreign Trade Zone (disjointed FTZ); • Location makes possible rapid unloading of containers and immediate return to container yard;

  19. NJTPA VALUE-ADDED DISTRIBUTION CENTER LOCATION CRITERIA, continued • Convenient for use by B2B & B2C package freight distribution to NJ, NY, PA, CT conurbation; • Accessible to inbound domestic production inputs( e.g. Rail and Truck); • Accessible to a two-tiered labor pool; and ability to develop Planned Unit Developments (PUDs)

  20. RECOMMENDATIONS • The State of New Jersey working with the Port Authority and local govts. should prepare immediately to “land bank” (450 acres) of recommended sites for development of distribution centers, adjoining container yards, and linked dedicated freight-ways. • This integrated economic development program should be seen as a single, revenue producing project like the “Alameda Corridor”, and should seek and receive federal funding assistance for upgraded infrastructure and improved connections to regional transportation grid.

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