Savannah North

Savannah North

The Port of New York and New Jersey has a built-in advantage - the region's large population and demand for consumer goods. It also has built-in disadvantages - land and labor costs are higher than in most other areas.

For port officials, the challenge is to maximize the pluses and minimize the minuses. That's why the port and the New Jersey Economic Develop-ment Authority are promoting the Portfields Initiative, which will promote development of distribution centers near the port's marine terminals.

Port Director Rick Larrabee sees these distribution centers as a potential magnet for cargo, and as a way to handle continuing growth in Asian imports without bringing an already crowded road system to a standstill.

The port authority and the New Jersey development agency have committed $1.8 million to identify sites for new import warehouses and distribution. They'll release a report next month identifying 20 such sites. Then the agencies plan to work with developers to try to turn plans into reality. That assistance could take several forms, including help with marketing and financing.

Near-dock distribution centers have been used successfully in several ports. The most notable example on the East Coast is Savannah. With the encouragement of the Georgia Ports Authority, retailers have opened 14 import distribution centers within a few miles of the Savannah docks during the last decade.

The business they have attracted has turned Savannah into a regional load center for Asian imports. The Georgia Ports Authority expects volume at Savannah to hit 1.8 million TEUs this year, which probably will put it ahead of Charleston. Savannah handled 1.65 million TEUs last year.

Development of near-dock warehousing is more difficult in New York-New Jersey than it has been at Savannah, where the port is bordered by miles of pine trees. New York-New Jersey's marine terminals are hemmed in by factories, highways, utility networks, a busy airport and abandoned industrial sites, some of which are so polluted they practically glow in the dark.

But as traffic continues to grow at double-digit rates, there's increasing demand for near-dock warehousing. The port handled nearly 4.5 million TEUS of loaded and empty containers last year. Many importers now truck containers from marine terminals to distribution centers that have sprung up on former farmland in central New Jersey. Port officials - and importers and truckers - would prefer to be able to use nearby sites that enable drivers to make more trips and reduce the load on the metropolitan region's highways.

That's why Larrabee sees near-dock warehousing as necessary and desirable. "If the port is going to continue to grow, this is the kind of thing we have to do," Larrabee said. "We want to improve the system so that when the cargo comes in, we can handle it in an efficient way."

Joseph Bonney is editor of The Journal of Commerce. He can be contacted at (973) 848-7139, or at jbonney@joc.com.