By Michael G. McGuinness
As an advocate for the commercial and industrial real estate industry in New Jersey, I am impressed with the progress that has occurred over the last few years in the operation of our Port of New York and New Jersey. Serving on the Council on Port Performance has given me an opportunity to weigh in on and observe numerous programs and initiatives to improve efficiency and service reliability at the port, which benefits our transportation, distribution and logistics industry. This collaborative effort has and continues to tackle various issues related to operational efficiency, including increasing vessel size, labor shortages, shortage of chassis, operating system failures and disruptions — such as Superstorm Sandy, blizzards and construction. With a shared goal of enhanced port operations, the diverse council members deliberate, share information and advocate for reforms that have impact.
The council’s six implementation teams oversee key areas such as equipment, rail, gate operations, workforce development, customer care and community/government outreach. Accomplishments include:
- TIPS, or the Terminal Information Portal System, a tool that compiles information from all six container terminals and makes data such as container availability, booking status, vessel schedule and empty returns information available to qualified users in real time over the internet;
- Truck Management Appointment System and Truck Port Pass, which have reduced wait and turn times of truckers by 45 percent;
- Trucker’s Resource Guidebook, which provides information on navigating the port’s marine terminals along with phone numbers, FAQs and maps;
- Winter weather/emergency plan, which provides predictable actions and communications plan for adverse weather, closures and disruptions; and
- Workforce development, such as promoting apprenticeship programs, developing transportation curricula for high schools and a LinkedIn site for posting job opportunities.
Work continues on other initiatives such as a port-wide chassis pool, express rail support track, use of RFID (radio frequency identification devices) to measure truck turn times and coordination of terminals and alignment of gate hours.
These improvements are just in time as our port is booming with cargo volumes on record pace for 2017. Year-to-date container volumes have set a new record — up 4.9 percent compared with 2016 and up 4.2 percent compared with 2015. The Port of New York and New Jersey market share is 15 percent of the U.S. total, with imports up approximately 7 percent throughout North America due to the strengthening economy. Year-to-date rail volumes, or total lifts, are up nearly 3 percent with auto volumes being up 5 percent. This increased reliance on rail has been critical in addressing port efficiency, competitiveness and reduced emissions. The current 540,000 rail car lifts per year is equivalent to 920,000 fewer truck trips at the port. Although New Jersey’s position as a gateway and distribution platform for close to 40 million consumers is rock solid, significant additional growth is possible by shipping more cargo by rail westward to Pittsburgh, Indianapolis, Cincinnati, Chicago and Detroit. There is also room for growth in exports to Canada and overseas markets due to a resurgence in smaller light manufacturing firms in the food and biotech industries. Increased export of cargo would help reduce the nearly 200,000 empty containers that now reside at the port, which supports 336,000 full-time jobs in the region and represents over 11 percent of New Jersey’s gross domestic product.
This boom in commerce will likely expand further now that the “Raise the Roadway” Bayonne Bridge Navigational Clearance Project was completed on June 8, approximately seven months ahead of a revised schedule. While the early completion didn’t allow ocean carriers time to deploy larger vessels immediately, the Port of New York and New Jersey has already welcomed into Port Newark-Elizabeth eight to 10 vessels with up to a 13,000 TEU capacity that wouldn’t have previously been able to pass under the historic bridge. Back in 2009, NAIOP New Jersey was the first and most vocal in calling for a solution to the Bayonne Bridge air draft issue. With the Panama Canal widening then projected for completion in 2014, the new massive container ships would be unable to navigate under the bridge. A unique solution was reached: building a new higher roadway, while keeping the existing roadway open to traffic, and preserving the bridge’s iconic arch. On Sept. 7, a celebration will be held to officially mark the completion of the project. This bridge illustrates just how critical infrastructure investment is to our economy. As Anne Straus-Wieder, director of freight planning at North Jersey Transportation Planning Authority, has said, “mega ships lead to mega opportunities.” Further future growth will also come from a shift of low-cost labor from China to India, which favors more cargo being imported through the Suez Canal to the East Coast.
New Jersey’s status as a premier port and distribution platform will, however, require continued major investment in our freight rail system. Our new governor and Legislature must ensure that funds, which were committed to freight rail in the recently renewed Transportation Trust Fund, are properly allocated and in a timely fashion. Federal funds also need to be maximized, which is why the New Jersey Department of Transportation is now leading efforts to update New Jersey’s Statewide Freight Plan to identify projects that will most greatly benefit our logistics industry. This task will ensure compliance with and eligibility for funding from the Federal FAST Act, short for Fixing America’s Surface Transportation. These monies can be used for all modes of infrastructure used for freight transportation, such as roads, rail, air, water and pipeline. Today, rail serves 15 percent of the freight into and out of the port. Securing sufficient funds will help New Jersey achieve its freight rail goal of 20 percent by 2020, further reducing emissions.
More funds will also help our state become more competitive by increasing the DOT’s 263,000-pound rail car standard weight limit on certain rail lines to 286,000 pounds. In 2015, NJTPA launched its Freight Rail Industrial Opportunity (FRIO) corridors program to establish a framework for identifying and addressing locations in the region that preclude access for national standard rail freight cars, including weight, height and width restrictions. Consultants, who responded to an RFP, are being retained to develop a restriction location database, identify needs to address restrictions and identify the potential associated economic development and financial strategies for addressing these restrictions. Meanwhile, the Port Authority of New York and New Jersey is drafting a Port Master Plan with a targeted completion date in early 2018. Its goal is to identify steps to confront key challenges including the: (1) high business costs of the region; (2) land- and infrastructure-related issues, such as aging deteriorated roads, expensive and limited access to available land, road congestion and environmental concerns such as air emissions; and (3) competition from other ports on the east and west coasts and Canada. On the West Coast, Los Angeles and Long Beach dealt with their booming growth and shortage of available and affordable industrial land close to their ports with the creation of the Inland Empire, which is well-served by rail. At the moment, New Jersey’s Inland Empire is Pennsylvania’s Lehigh Valley. It doesn’t have to remain that way, as sufficient affordable land is accessible in central and southern New Jersey. Exit 8A off the New Jersey Turnpike is already a nationally recognized industrial distribution center, as are points farther south. There would, however, have to be major investments in rail infrastructure to serve this region. The new governor and Legislature will have some very important work cut out for them.
Michael McGuinness is CEO of NAIOP New Jersey and has guided the commercial real estate development association’s progress since he joined the staff in 1997. In addition to overseeing daily operations, programs and staff, McGuinness directs the chapter’s legislative activities and manages the Developers Political Action Committee (DPAC).