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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 Talking Freight Workshop Presentation May 19, 2004
Regional Strategy for Location of
Distribution Facilitiesin
NORTHERN NEW JERSEY
MOFFATT & NICHOLE N G I N E E R S
Talking Freight Workshop Presentation
May 19, 2004
MOFFATT & NICHOLE N G I N E E R S
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.
NJTPA REGION AS A GATEWAY TO THE GLOBAL MARKET
OBJECTIVE
Thus enhancing the
MOFFATT & NICHOLE N G I N E E R S
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.
A MAJOR ENGINE OF REGIONAL ECONOMIC DEVELOPMENT
The NY/NJ/CT Tri-state Metropolitan Region is the largest Consumer Market on Earth.
MOFFATT & NICHOLE N G I N E E R S
MEGAMALLS
Mastodon : Extinct animal Distribution Center = Key Land Use tothe New Economy
OR
NORTHERN N.J.’s HOTTEST FUTUREREAL ESTATE MARKET
MOFFATT & NICHOLE N G I N E E R S
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 TEUsb) First 9 months of 2002 increased by 8.5% over previous yearc) In last two years cargo volumes have increased greater than forecasted
50 Foot Channels
40-45 channels
MOFFATT & NICHOLE N G I N E E R S
DIVERSION OF WEST COAST ASIA TRADETO EAST COAST PORTS
Shift 2.5 million TEUs: from West-Coast Ports to PONYNJ by 2020
Today: 80%2020: 73%
Today: 6%2020: 13%
Singapore
Colombo
Kaohsiung
Hong Kong
Kobe
Gioa Tauro
Jiddah
LA/LB
LandbridgeAlgeciras
10-State Market Area
PONYNJ
Channel deepening/large container vessels/capacity constraints for transcontinental rail landbridge will cause shift in shipping patterns
Geographic Distribution of 1998/99 Containerized Trade within 17 State Market Area
Source : Moffatt and Nichol Engineers, Based on adjusted PIERS data
C A N A D A
Chicago, ILDetroit, MI
Buffalo, NY
Cleveland, OH
Ogdensburg, NYSaint Albans, VT
Houlton, ME
ATLANTIC OCEAN
75 mile
200 mile
300 mile
400 mile
Baltimore, MDBaltimore, MD
HalifaxHalifax
MontrealMontrealOttawaOttawa
TorontoToronto
Newark, NJNewark, NJ
Boston, MABoston, MA
New York, NYNew York, NY
Port of NY & NJPort of NY & NJ
REGION POPULATION
103,885,761
38.40%
Number% ofTotal
GROSS STATE PRODUCTS
3,349,934 41.3%
Millions ofCurrent
US$
% ofTotal
TOTAL CONTAINERIZED* TRADE
6,901,512 39%
TEU’s% ofTotal
MOFFATT & NICHOLE N G I N E E R S
NJTPA REGION LOCATION MAP WITH HIGHWAY AND RAIL NETWORK
Legend
US Route
NJ Interstate
Railroads
NJTPA RegionNE W AR KI NT L
#Y
.-,2 0 9
.-,2 2 2
.-,2 02
.-, 6
.-, 1
.-,2 0 6
.-,20 6
.-,19 5
(/80
(/78
(/295
0 10 20 30 Miles
PONYNJPONYNJ
75 miles
Newark Airport
Newark Airport
NewarkNewark
Bethlehem PABethlehem PA
MOFFATT & NICHOLE N G I N E E R S
Legend
Mileage Cost Ranges
$10 (2) to $30
$30 to $60
$60 to $90
$90 to $120
$120 to $193
ROUND TRIP TRUCKING COST (1) FROM EPAMT(LOADED 1st LEG, 85% EMPTY 2nd LEG)--1999
#Y
0 10 20 30 40 Miles
75 mile radius
Connecticut
New York
Pennsylvania
New Jersey
PONYNJPONYNJ
Notes1. 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
MOFFATT & NICHOLE N G I N E E R S
EAST COAST WAREHOUSE TRENDSTRADITIONAL STORAGE WAREHOUSE SYSTEM
ContainerTerminal
ContainerTrucking
PublicWarehouse
RegionalTrucking
RegionalWarehouse
ContainerizedCargo from Asia
Consumer
Retail Store
• Trade-off between economies of size versus land price
• Definitive trend to relocate beyond 100 mile radius
• Little demand with 75 mile radius
MOFFATT & NICHOLE N G I N E E R S
WEST COAST WAREHOUSE TRENDSCONSUMER DISTRIBUTION SYSTEM
Third Party Shipper(UPS, FedEx, etc.)
Private Home
Private Home
Private Home
LocalComponents
Internet Fulfillment
ContainerTerminal
ContainerTrucking
ContainerizedCargo from Asia
Value-AddedDistribution
Center
MOFFATT & NICHOLE N G I N E E R S
WATSON INDUSTRIAL CENTER P.V.A
DISTRIBUTION CENTER ACTIVITIES
Basic ServicesStorageTransloadingCustomsForeign Trade ZoneFreight ForwardingTrucking
Value-Added ServicesLogisticsBarcodingSorting/LabelingMarketing MaterialsScanningRepacking/Pick & PackKittingPackaging Design & ManufactureManipulationRepairInternet FulfillmentSpecial “Piece” Manipulation
XXXXXX
XXXXXX
XXXXX
X
X
XXXXXXXXXX
XXXXX
XXXXXXXXXXXX
Old Style Dist.
Traditional
Warehouse
Just-in-Time
Distribution
Center
Retail
Distribution
Center
Consumer
Distribution
Center
Evolution to More Complex Process.
MOFFATT & NICHOLE N G I N E E R S
MOFFATT & NICHOLE N G I N E E R S
NJTPA - “STRING OF PEARLS”
DedicatedFreightway and ITS Systems Architecture
Container Yard
NJTPA REGION
Value-AddedDistribution Center
Major Rail or Direct to Market
MOFFATT & NICHOLE N G I N E E R S
• 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
THE NEED: REGIONAL VALUE-ADDED DISTRIBUTION CENTERS NEAR PORT AND MARKETS
STRATEGY: LOWER VMT/AID PORT
MOFFATT & NICHOLE N G I N E E R S
DEMAND FORECAST FOR DISTRIBUTIONCENTERS IN NJTPA REGION 2000-2040
T I
M E
P
E R
I O
D
2000-2010
2010-2020
2020-2030
2030-2040
150
500
900
1400
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
MOFFATT & NICHOLE N G I N E E R S
KEY BROWNFIELD SITESKEY BROWNFIELD SITESPortway Corridor OverviewPortway Corridor Overview
Portway Alignment And Brownfields
Brownfield sitesPhase I PortwayAlignment
Figure 1
MOFFATT & NICHOLE N G I N E E R S
NJTPA VALUE-ADDED DISTRIBUTIONCENTER 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;
MOFFATT & NICHOLE N G I N E E R S
NJTPA VALUE-ADDED DISTRIBUTIONCENTER 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)
MOFFATT & NICHOLE N G I N E E R S
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.
