NJ distribution dynamic around Port of New York/New Jersey

By: | at 09:47 AM | Channel(s): Ports & Terminals  

Distribution is an integral part of the Port of New York/New Jersey. With some 22.58 million metric tons of general cargo entering the United States last year via the six container terminals operated by the Port Authority of New York/New Jersey’s (PANYNJ), and some 11.76 million metric tons leaving the terminals, it’s easy to see why warehouses and distribution centers (DCs) are key to its success.

The region is home to a wide assortment of DCs all the way to fulfillment centers, to those that handle food products and retail goods. According to PANYNJ authorities, more than 21 percent of the entire U.S. retail sales market is within a 250-mile drive of the Port of New York and New Jersey marine terminals.

Central New Jersey is home to a large amount of DCs serving the port area. One is East Coast Warehouse & Distribution, the largest provider of integrated temperature-controlled logistics services in the Port of New York, New Jersey Marine Terminal and Jersey City. The company maintains over 1.7 million square feet of refrigerated warehouse space in New Jersey with controlled temperature ranges from 34°F to 65°F, as well as ambient space.

Thomas F. Clyne, PANYNJ general manager, Port Commerce Department, describes East Coast’s facilities as handling beer, chocolate, Mars candy, and scores of other food items.

Perfectly Located

Tracye McDaniel, president and CEO of non-profit economic development group Choose New Jersey, remarks that Central New Jersey, itself, is “perfectly located.” Not only is Central New Jersey home to 585 million square feet of warehouse space, it is connected to 36,000 miles of interstates and highways, over which more than 500,000 trucks move each day. The state also has 1,000 miles of rail freight lines.

Central New Jersey’s offering of warehouse/DC space continues to increase each year. For example, Amazon is building two large distribution centers in New Jersey, each about 1 million-square-feet. The $130 million DCs will start collecting state sales tax next summer from its customers in the state. The Seattle-based online retailer, which now has more than 36 U.S. fulfillment centers, will open the first warehouse in Robbinsville, NJ in March 2014.

Goya Foods, the nation’s largest Hispanic-owned food company, broke ground last year for the next phase of its headquarters and regional distribution center. The 615,000-square-foot, $127 million headquarters and warehouse are being built in Jersey City, NJ.

Wakefern Food Corp. has opened its new food distribution warehouse in Newark, NJ. The 180,000-square-foot, temperature-controlled distribution facility serves ShopRite and PriceRite stores in the Northeast and contains its own banana ripening capabilities.

That facility, says Jeff Reagan, Wakefern vice president of logistics and warehouse, makes it possible for the company to actually bring bananas straight from the ships calling at Delaware’s Port of Wilmington. The company handles 3.5 million cases of bananas on an annual basis.

“The facility is growing into a ripening center for other fruits and produce,” Reagan adds.

Prologis is building a 900,000-square-foot DC in Jersey City, which will be shared by online grocer Peapod and Imperial Bag and Paper Co. Dubbed Prologis Ports Jersey, the DC is 3.2 miles east of the NJ Turnpike. It is expected to be completed in spring 2014. Subaru has opened its 526,050-square-foot parts distribution center and training facility in Florence, N.J.

Other large corporations with major distribution operations in the state include hhgregg, Barnes & Noble, Toys “R” Us, Home Depot and Coca Cola Enterprises.

Shiseido has been streamlining its U.S. distribution operations and reports that it expects to complete the facility consolidation by the end of the third quarter of 2013. While the New York area is an important market to the Japanese cosmetic company, Shiseido is actually expanding its operations in Columbus, Ohio to handle shipment of products to the Americas and globally for multiple brands. It is establishing a smaller DC at its existing manufacturing facility in East Windsor, NJ to handle exports of U.S.-manufactured Shiseido brand products to Europe and Asia.

According to McDaniel, there are between 1,800 and 1,900 distribution centers in Central New Jersey.

Other Projects

The PANYNJ is promoting various DC locations, including the Raritan Center in the New Jersey townships of Edison and Woodbridge.

The Raritan Center is a master-planned, mixed-use business park and home to hundreds of companies–Fortune 500 companies, Global 500 companies, and market leaders from every business sector. It encompasses over 2,350 acres and is located immediately adjacent to Exit 10 of the NJ Turnpike (I-95), at the crossroads of Interstate 287/440, the Garden State Parkway, and U.S. Routes 1 and 9. Port Newark is within 20 miles of Raritan Center via the New Jersey Turnpike, as is Newark Liberty International Airport.

On-site business amenities include freight rail service provided by CSX, Conrail, Norfolk Southern, and Raritan Central Railway. According to the Raritan Central Railway’s website, its specialties include just-in-time switching, transloading, warehousing, and storage-in-transit. One advantage of using the service, it states, is for every container or carload of freight that is brought to its self-contained operation via rail shuttle from the ports of Newark, Elizabeth and Staten Island, a diesel truck trip will be eliminated.

It is expected that the development of the Raritan Express Shuttle will remove as many as 300 to 350 overweight containers from public roads on a daily basis.

“This represents a positive statewide environmental benefit by reducing diesel emissions and greenhouse gases and easing traffic congestion in the urban areas surrounding the ports,” the website says.

The railway’s diversified customer base includes food-grade warehouses, plastics manufacturers, chemical companies, and building products distributors.

Raritan Central Railway operations are based at the Raritan Center Industrial Park and the Heller Industrial Park in Edison, NJ, an 8.7 million square foot industrial park located at NJ Turnpike Exit 10. Both the Raritan Center Industrial Park and the Heller Industrial Park offer 40 food and paper grade buildings.

The Raritan Express Corridor is key to completing a larger goal of completing a single-site, multi-modal complex—the Raritan Logistics Center. Included in this goal is the construction of Raritan Central Railway’s own port with on-dock rail. Dubbed Port Raritan, the port will provide direct access to and from vessels and will allow containers to be reloaded dockside onto smaller vessels for short sea shipping to other ports such as Albany, Norfolk, or Baltimore. Also included in the multi-modal complex plans will be a domestic intermodal terminal, further expanding the reach of the NY/NJ port district to the interior United States.

Lehigh Valley, PA

Lehigh Valley, PA, has grown into a DC haven serving the NJ/NY port area given its central location in the Northeast Megalopolis and the fact it is situated within a one day drive to more than one third of the total population of the United States and more than one half of the total population of Canada. Interstate 78 provides a direct route into New York City, Newark, and the surrounding ports approximately 80 miles away. Another plus: the area also has more land available than the congested regions around the major metropolitan areas and the ports.

NFI, a leading supply chain company headquartered in Cherry Hill, NJ, broke ground on a 980,000 square foot distribution site that will serve as the future distribution center for Ocean Spray Cranberries, a worldwide food and beverage cooperative.

“The highway infrastructure provides easy access to several large metropolitan cities, including New York, Philadelphia, Washington D.C., and Baltimore,” says NFI CEO Sid Brown.

Other companies with distribution centers in the region include BMW, Amazon, Advanced Auto Parts, and Walgreens.

Distribution is not the only draw to the area. Don Cunningham, CEO of the Lehigh Valley Economic Development Corp. (LVED) reports that more and more companies are also moving their production facilities into the region.

Karen Thuermer's avatar

American Journal of Transportation