On the Road | Elizabeth, New Jersey: On the Waterfront
Inbound Logistics Senior Writer Joseph O'Reilly visits New Jersey's Port Elizabeth, one of the East Coast's busiest ports.
Commuting from New Jersey into New York City off and on for 20 years, few things have escaped my writer's eye.
Except the most obvious—one of the largest port complexes in the United States and the birthplace of containerization.
Even after spending thousands of hours sitting in rush-hour traffic, staring blankly out of a commuter bus window at planes, trains, and automobiles crisscrossing New Jersey wetlands, proper introductions went wanting.
When an opportunity presented itself in April 2009 to join the Council of Supply Chain Management Professionals' New Jersey Roundtable for a presentation and tour of Port Elizabeth's APM and Maher terminals, our paths finally crossed.
In the core of the Big Apple, there's no lack of stimuli. Glass window displays compete for attention with walls of steel. Wall Street's granite facade melts into Broadway's lights. Big ideas receive even bigger media exposure. But the rhythm and flow of the city is dependent on a much larger, albeit less ostentatious, force.
Mere miles from the glitz and the glam, across the Hudson River in New Jersey swampland, sits a gritty big-box port that brings quality and quantity to life in a New York City minute.
The Port Authority of New York and New Jersey (PANYNJ) is a bi-state agency that operates and maintains infrastructure and services—including mass transit, six tunnels and bridges, five airports, and the third-largest marine cargo port in the United States—within the greater metropolitan area.
Port Elizabeth, located in New Jersey, features the port's two largest tenants. APM Terminal's operation is its largest on the East Coast, boasting 350 acres, on-dock rail access, and three deepwater berths. Separated berth-side by a lone linked fence, APM's counterpart is even more imposing. Maher Terminal's facility is the largest in North America in terms of acreage and volume. It's a port within a port. In terms of container throughput, Maher is larger than Norfolk, Montreal, Boston, Halifax, Baltimore, and Savannah, handling more than two million TEUs in 2008, or nearly 50 percent of all container volume moving through the port.
Both facilities play a big role in the port's current and future reckoning. Despite the economic downturn, the PANYNJ only experienced a one-percent dip in container business in 2008, recording 5.2 million TEUs. In comparison, West Coast ports such as Long Beach and Los Angeles saw volume drop by 40 and 32 percent, respectively.
Through September 2009, container traffic has been less robust, with a near 16-percent slide year over year. Still, the port is bullish about the future and the efforts its tenants are making to expand with anticipated demand.
Elizabeth, N.J., is in the middle of a fast-sweeping port boom.
Approaching Terminal Velocity
The approach to Elizabeth from Manhattan offers a "baptism by ire" into New Jersey locomotion. Navigating around the state's notoriously circuitous maze of highways and toll plazas is a test of patience, will, and U-turnability. The brave wing in with a trusty GPS and a heavy foot. Those more or less astute take their chances with an adrenaline-fueled New York City taxi ride that might scare even Frogger.
Exit 14 off the NJ Turnpike veers in two directions—one road leads to Newark Liberty International Airport, the other to Port Elizabeth. Like a labyrinthine DC conveyor belt to a lone loading dock, all roads lead to a Port Authority. Finding your way to the marine terminals after leaving the Turnpike is comparatively easy. Left and right, tractors towing 20- and 40-foot containers, others unburdened, scream along as they wend their way to and from Port Elizabeth's docks.
Moving south along Corbin Street, the main thoroughfare into Port Elizabeth, you find yourself surrounded by intermodalism. The marine complex is to the left, the railroad is to the immediate right, then the NJ Turnpike, and beyond that Newark Airport. All around, planes, trains, and trucks make their presence felt, visibly and audibly. Less conspicuous, beyond glimpses of towering candy cane-striped cranes, the maritime drama unfolds.
A Matter of Plumbing
Currently, the PANYNJ holds a 14-percent market share of containers moving in and out of the United States and expects this piece of the pie will grow. At their peak, Long Beach and Los Angeles controlled nearly 65 percent of all container trade in the country, but that number is sliding—precipitously so—as sourcing patterns shift.
PANYNJ is already the third-largest port in the United States, serving the country's most populous region. But infrastructure development and expansion in a major metropolis is not without obstacles. "Infrastructure is a systems issue, it's a matter of plumbing," says Peter Zantal, general manager strategic analysis and industry relations, The Port Authority of NY and NJ.
The port is rooting out inefficiencies to increase and enhance cargo flow. In terms of TEUs handled per acre per year, there is room for greater productivity. PANYNJ is currently at 2,500 TEUs, 500 less than Los Angeles. Hamburg is twice as efficient. One reason for this anomaly is the port's reliance on trucking to move cargo in and out of the area. Only 14 percent of shipments are ferried via rail—and here lies great opportunity for improvement.
It's why the port has invested $600 million in rail/intermodal enhancements, most notably the Millennium Rail project. The joint venture between APM Terminals and Maher Terminals operates the ExpressRail System, which provides dedicated rail facilities for the port's major container terminals and additional rail support track. Centered between both facilities, the system provides daily double-stack train service between the port and points in the Midwest, eastern Canada, and beyond.
An Inside Peek During Peak
The Maher and APM terminals sit side by side along Corbin and McLester streets, with Elizabeth ExpressRail separating the two yards. Entering the APM gate, you pass 29 inbound and outbound truck lanes. Drivers and their tractors queue up to receive pickup instructions and lane assignments from gate clerks. Leaving the terminal, they pass through a 10-point roadability inspection process before transiting a series of iridescent yellow radiation portals.
Moving toward the docks, an out-of-service chassis graveyard passes view, followed by yellow reefer racks, where containers with perishable, temperature-sensitive goods are plugged in to stay cool.
On this day, three ships are in port: the Maersk Douglas, Maersk Kentucky, and Hanjin Wilmington. The terminal is abuzz. Loaded and empty tractors scurry here and there, picking up and toting containers around the yard. "The place is busy today," observes Jamie Shelton, general manager of client services at APM Terminals. "That's good."
The APM yard features 6,000 feet of berthing space in the shape of an "L" on the southeast-facing side of the port abutting Newark Bay. It operates 15 ship-to-shore cranes—including four Super Post Panamax and eight Post Panamax—used for loading and unloading containers from vessels.
Passing underneath these rolling leviathans, and in the shadow of three container-laden ships, you begin to appreciate the size, scope, and scale of their shared endeavor.
The Maersk Douglas, for example, which flies under the German flag, stretches 965 feet in length—or three football fields and two holding penalties—and 105 feet in width. It can carry in excess of 5,000 TEUs fully loaded. The Super Post Panamax cranes span 206 feet, or nearly 26 containers across.
As crane operators strip the Maersk Douglas of its enormous weight, the "hard hat only" signs seem blatantly obvious. The dock is a hive of activity, a constant whir and blur of tractors letting go of chassis, straddle carriers confronting containers, and cranes hoisting boxes. Bob-tailing hustlers, bomb carts, straddle carriers, tractors, and rolling gantries hurtle in and out of moving containers and neatly stacked hatch covers.
These types of containerships have an eight- to 12-hour dwell time on average, sometimes longer depending on the mix of imports and exports, explains Shelton. Historically there is a 70/30 percent break between incoming and outgoing cargo at the terminal.
Moving past dockside, where workers are re-stenciling and painting Maersk Kentucky's name, you see the Millennium Rail project up close and personal. Sandwiched between the APM and Maher terminals, the ExpressRail spans 45,000 feet, includes 18 tracks, and is served by four railroads—and two primary Class I's, CSX and Norfolk Southern.
Greater productivity partly predicates the port's future container volume growth, so rail/intermodal accessibility is a competitive differentiator. "If you make the port more efficient, make it easier to get in and out of, that makes it more competitive," says Zantal. "We did not expect rail traffic to ramp up so much so fast. Rapid growth has largely been attributed to high fuel costs, concentrated cargo, and more hinterland traffic."
Building for a Container Boom
Next door at the Maher terminal, lunch hour is passing and the pace of movement is picking up. The facility's administrative building lies on the west side of the terminal, near the entrance gate, surrounded by layers of fencing. The building stands alone. Its boxy, monolithic profile dwarfs the islands of containers scattered elsewhere around the 445-acre yard.
Maher's office is important for another reason. It's the original headquarters of Malcom McLean's SeaLand business—the company that gave containerization and the port a name. "Many global container terminals were conceived in this building," says Ivo Oliveira, vice president of Maher Terminal. "If walls could talk."
The main truck entrance features a five-lane canopy equipped with laser scanning technology and cameras that snap multiple images of equipment while intuitively weighing stock as it rolls through. During this process, the terminal is able to recognize that a container has arrived and identify the ship and destination port where a specific box is bound. Instructions are placed in a queue and directions are conveyed to truck drivers and straddle carrier operators. All this happens in a matter of seconds, explains Oliveira. Eventually the terminal will move toward virtual, unmanned lanes. On an average day, Maher will process up to 7,000 trucks.
Along the 10,000-foot berth, which can accommodate nine container ships contiguously, the MSC Dartford and MSC Scotland are in various stages of unloading. Super Post Panamax and Post Panamax cranes sit on 100-foot gauged rail so that operators 130 feet up can maneuver the equipment. Maher Terminal operates 180 straddle carriers and 16 cranes, which are capable of handling the largest containerships. "The booms extend forever," observes Oliveira.
Compared to the APM yard, where truck lanes converge into pyramidical cathedrals of stacked containers, Maher's yard is much less cluttered, more dispersed. Case in point, Maher Terminal has reefer container capacity for 1,000 boxes, which is quite large, but it uses a straddle grounded system as opposed to denser reefer racks. Apart from having greater acreage, Maher has made the transition from high-density stacking because it serves a heavy truck market. The best way to service trucks is by using straddle carriers. It's a matter of direct transfer rather than concentrated and aggregated transfers, explains Oliveira.
But if the future is any indication, and as the port explores better means of improving velocity, the joint venture Elizabeth ExpressRail will grow more popular as a conveyance for moving containers on and off port. "We're trying to accommodate a coming cascade of larger ships into this side of North America. On-dock rail is the jewel of the facility. I cannot stress its importance enough," Oliveira adds.
Building a Bridge to the Future
As the economy rebounds, the West Coast port conundrum and concerns about capacity, congestion, and infrastructure will likely regain currency. U.S. container trade dominance is beginning to shift its equilibrium away from the west as Asia-origin volumes wane, global sourcing paradigms shift, all-water services through the Panama and Suez canals strengthen, and U.S. Gulf Coast and East Coast ports ratchet up capital investments.
The PANYNJ and its tenant partners have made great strides investing in the future. But as you look across Newark Bay from the APM and Maher terminals, past container-laden Goliaths, and in the shadow of Gotham's steel spires, the port's greatest obstacle sits inconspicuously on the horizon—the Bayonne Bridge.
To the port, the bridge is anachronistic, a symbol of the past, of pre-containerization trade. But it is still hugely relevant for modern-day transit. The span stretches across the Kill Van Kull and ferries more than 20,000 vehicles a day between Bayonne, N.J., and Staten Island, N.Y. Constructed in 1931, the Bayonne Bridge's 151-foot air-draft (the distance from the water's surface to the underside of the bridge roadway) is a major limbo stick for growing containerships.
"Maher Terminal is ready for the future," says Oliveira. "The problem will be getting boxes past the Bayonne Bridge."
That challenge will be exacerbated when the worldwide fleet of Super Panamax and New Panamax containerships comes online with the completion of the Canal's expansion.
In 2008, the Port Authority commissioned the United States Army Corps of Engineers to complete an audit of the commercial consequences and benefits of fixing the Bayonne Bridge's air-draft restriction. It reported that modifying or replacing the bridge could cost $3.1 billion and take 10 years or more to complete. Now, PANYNJ is spearheading a $10-million study to determine a preferred course of action.
Ongoing analysis is evaluating a variety of solutions that would accommodate new vessels and container volumes. But the Port Authority and the Maher and APM terminals are at an impasse over the overpass as engineering and environmental due diligence take their course. For Oliveira, it's a matter of simple logic.
"As soon as the Bayonne Bridge comes down, or goes up, we'll be poised to handle these new ships."
Traffic is as unpredictable as ever on my daily commute. The flashing landscape that passes by my window does little to shake the ennui. But glimpses of container cranes suspended over Newark Bay and a forsaken bridge welcome new knowledge.
Port Elizabeth is thoroughly New Jersey. It has an exit off the Turnpike, the accents are thicker, and you can't help but think The Boss would feel right at home on the docks.
It's also thoroughly Inbound Logistics. What happens every day at the APM and Maher terminals is the pulse to my monthly beat. Port Elizabeth is where demand and supply connect, where modes come together, and where the past and future of maritime trade are converging.
The port will always be cast in the light of Malcom McLean's SeaLand adventure and the birthplace of containerization. And yet, ironically, it is a looming shadow from that shared past—the Bayonne Bridge—that is boxing in future plans.
Port Elizabeth isn't alone. This tension exists elsewhere around the country where new transportation demands are raising old infrastructure problems. But the port and its tenants are moving the needle in another way.
Port officials are convinced the Millennium Rail project will do wonders for improving hinterland connectivity and container throughput. They believe it's one solution to managing growth. You also get the impression that terminal operators and government will confront the challenge of re-engineering the Bayonne Bridge with equal determination. That's thoroughly New Jersey, too.