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Date: January 24, 1996

location: Elizabeth

Title: Keeping Pace by Rail, Land and Sea

Author: Richard O. Aichele

Subject: New Jersey”s intermodal network is vital to the state”s economy. While Port Newark/Elizabeth, the network”s linchpin, has been threatened by the silting in of the harbor, projects like a new $18-million facility in Port Elizabeth show promise.

Intermodal is not exactly a word that flows trippingly off the tongue of the average business person. It means transportation that involves more than one form of carrier on the same trip. Intermodal transportation is important to the Newark area, where rail, road and ocean transportation come together to give New Jersey a great advantage in world trade.

The Port Authority of New York and New Jersey has just invested $18 million in a new ship-to-rail facility in Port Elizabeth, which is due to open this month. The venture seems like a safe bet. The volume of cargo moving through the port continues to be strong. The new 33-acre facility on the docks began a few years ago as an experiment to cut costs for shippers. The on-dock, same-day transfers of cargo containers between ships and rail reduced handling and paperwork costs significantly. “The first facility became so successful that it outgrew itself,” says Donald H. Lotz, manager of intermodal development for the Port Authority. With 15,000 ft. of track and eight pieces of heavy equipment to transfer containers between ships and railroad cars, the new facility will be able to handle more than 110,000 containers a year.

Intermodal shipping using freight containers or trailers designed to be easily transferable with gantry cranes or mobile lifters between ships, railroads and trucks has grown steadily worldwide. The 10-ft. high by 10-ft. wide freight containers, which range from 20 ft. to 53 ft. long, provide a secure shipping container for an entire shipment of goods, replacing the older method of shipping individual crates.

The intermodal concept was originally developed in the 1930s but only came into widespread use during the past 35 years. Old-style, smaller freighters carrying bulk cargoes were replaced with new large cargo ships, which were stacked high with intermodal containers. The numerous finger piers along the Hudson River and East River, which were suitable for the old freighters, rapidly became obsolete after 1960, giving way to large terminal facilities with acres of land for transferring the intermodal containers to railroad cars and trucks. Port operations shifted from Manhattan to Port Newark/Elizabeth. The key factor leading to the development of New Jersey”s port facilities into a so-called load-center port was “the good land-side connections, including rail and trucks, which provided one-stop shopping for the steamship companies,” according to Lotz.

The increasing use of intermodal containers continues to change the face of railroads. Containers delivered by trucks have replaced railroad box cars delivered by local freight trains and, as a result, railroads have shifted their operations. Conrail is moving away from providing individual rail service to local shippers in favor of moving large blocks of rail traffic from hub to hub with the intermodal terminals frequently forming the key part of the hubs. CSX Intermodal is also streamlining its rail intermodal operations by replacing trailers with new containers that can be stacked two high on railroad cars.

Railroads have developed five major New Jersey rail-truck intermodal terminals within a 12-mile radius of Port Newark/Elizabeth. “The intermodal terminals now exist where the railroads had available land,” says Lotz. The challenge for intermodal terminal operators is to find enough available space for expansion. According to Larry De Young, a New Jersey transportation consultant, “The economics of property is so high that it is tough to locate a new regional facility.” Conrail and J. B. Hunt Transport are planning to develop a new rail-truck intermodal facility in Elizabeth on six acres of land underutilized by the Japanese shipping firm K Line. The CSX Sea-Land intermodal terminal at Little Ferry opened in 1985 and was able to expand last year to 75 acres by purchasing adjacent land from the New York, Susquehanna & Western Railroad, which serves the terminal.

New Jersey”s rail infrastructure could get another boost when the Howland Hook Terminal on the Staten Island side of the Arthur Kill reopens this year. Once fully operational, a significant part of its intermodal container traffic will pass through New Jersey via an inactive railroad freight line or by truck over the Goethals Bridge. The rail line between Staten Island and a Conrail connection at Cranford is now owned by the state of New Jersey and will be turned over to Union County. One Union County official says the rail intermodal container traffic generated could provide the financial incentive for a private operator to resume rail freight service. Lotz at the Port Authority sounds more optimistic saying, “It is quite probable it will be done in 1996.”

Based on recent growth patterns, planners see a bright

future for intermodal traffic. The railroads” share of traffic grew from 2% in 1988 to 10% in 1995. Says Lotz: “The railroads experienced unprecedented intermodal growth in 1994.” The large volume of intermodal traffic overburdened parts of the rail transportation system. “Conrail told the least profitable business to go away last year because they didn”t have the terminal space at the Kearny facility to handle it,” says De Young.

Although the railroads” share of intermodal business at the port was down during 1995, Conrail spokesman Arnie Bornstein says Conrail handles more than 80,000 containers and trailers a year through the port. K Line”s Land Bridge service accounts for almost half of the volume. K Line”s intermodal containers arriving from the far east at west coast ports are then shipped directly by rail to Elizabeth. North of the Port Newark/Elizabeth area, another Conrail intermodal terminal in Secaucus serves as the land bridge terminal for other steamship lines. CSX”s spokesperson Dan Murphy says its Little Ferry intermodal operation including Chicago-New Jersey train service “is a very strong market for us.”

The latest technology of double-stacked containers is being used by freight companies to squeeze more capacity from each acre of terminal space. The industry trend of shifting from trailers and single containers to the more efficient double-stack containers causes operational changes at railroads and trucking companies and the loss of some local jobs. CSX Intermodal”s shift from trailers and the consolidation of operations in Florida will also result in the closing of its Mt. Laurel office and the loss of 100 jobs during 1996, according to Murphy. Jobs at the Little Ferry intermodal terminal should not be affected.

The efficiencies resulting from shipping cargo in intermodal containers had its greatest regional employment impact on longshoremen. Their employment level in the region”s port fell from almost 29,000 in 1960 to 3,200 at the end of 1995. With container ships being built increasingly larger, the drop is likely to continue. Says Greg Storey, corporate secretary of the New York Shipping Association: “Employment is still trending slightly downward.”

Port Newark/Elizabeth is the linchpin holding New Jersey”s intermodal network together and setting it apart from possible new competing intermodal sites in Pennsylvania. With long overdue dredging of the port still stalled by government officials, the key maritime port of New Jersey”s intermodal transportation is threatened. Lotz sums up the current situation by saying, “For years we took for granted that ships would come here. That is not necessarily the case anymore.”

New Jersey”s intermodal network plays a major role in the state”s economy. To remain viable as a source of business and jobs for the future, business and government officials at all levels will have to ensure that the synergy of various modes of transportation, which led to the intermodal network”s development in New Jersey, continue to meet–or exceed–the needs of shippers.