Keeping goods and people moving through the Garden State and the trends influencing the state’s corporate site selection process were the focus of NAIOP New Jersey’s 2019 Transportation & Logistics Update.
The latest installment of the commercial real estate development association’s “Building a Better NJ” series, held at the Carpenters Apprentice Training Center in Edison on Dec. 4, 2019, addressed “hot button” issues including trucking industry challenges, last-mile mobility trends, and NJ Transit’s asset development plans, as well as the timing and expectations of the Gateway Project.
“When transit works well, it benefits commercial real estate,” said keynote speaker Kevin Corbett, president and CEO of NJ Transit. He listed the challenges he faced walking into the organization, including a shortage of locomotive engineers, ancient rail cars and buses, and 12 percent implementation of the federally mandated Positive Train Control system.
“We had to get back to the basics: infrastructure, people and technology,” said Corbett, “and that focus has started to pay off.” He cited numerous improvements and efforts to upgrade service, including the purchase of 183 new cruiser buses and 85 articulated buses to expand capacity in Northern New Jersey; and the launch of an electric bus pilot in Camden in 2021.
On the infrastructure side, NJ Transit is taking stock of its assets and committing over one billion dollars to capital projects as part of its new five-year capital plan, due out this spring.
Other major projects in the plan include reconstruction of Elizabeth Station and replacing the Raritan River Bridge, a nearly $600 million project scheduled to start construction in 2020. The organization has also established an office of Real Estate Development to support local communities through Transit-Oriented Development (TOD).
Steve Pastor, team leader for NAI James E. Hanson’s Global National Logistics and Ports/Rail Practice Group, led a panel discussion on logistics challenges. “Corporate America is changing the entire methodology of their site selection process. Companies can no longer absorb 30+ percent transportation increases. They are looking to be as close to domestic intermodal facilities as possible to save on transportation costs.”
In New Jersey, the supply chain continues to evolve and adapt to meet 21st-century demand. Anne Strauss-Wieder, director of Freight Planning at the North Jersey Transportation Planning Authority, said, “We buy a lot of stuff and we like free shipping. You can fit more containers at lower cost on these bigger ships.”
E-commerce is the primary disruptor, creating challenges ranging from ongoing congestion at the port to a serious shortage of truck drivers.
Strauss-Wieder noted the workforce shortage extends beyond drivers to the entire industrial sector. She added that young people need to be educated about the industry as a viable career option.
Discussing the status of what he called “the most urgent project in America,” Stephen Sigmund, chief of public outreach for the Gateway Program, explained that “there is consensus among stakeholders that these projects need to be built, but how to get them built and how to pay for them is an ongoing battle.”
Sigmund reviewed the current plan to dig a new two-track tunnel under the Hudson River and replace the antiquated Portal North Bridge. “The most congested section of the Northeast Corridor is between Penn Station New York and Penn Station Newark. We have no choice but to expand capacity and improve the resiliency of the infrastructure.”
New Jersey, New York and Amtrak have committed the necessary local funding, which has allowed early work to begin on both the Hudson Tunnel project and the bridge. But Sigmund said the $14 billion project has been stalled due to the lack of a federal partner to provide matching funds. “We are asking the federal government for $5.4 billion. We’re looking at pieces of work we can do to shore up reliability of the existing tubes and keep progress going forward. But we need stakeholders and organizations like NAIOP that support regional growth to keep up the fight for funding.”
A mismatch between labor market origins, transit and job destinations, coupled with missing infrastructure, has made first and last mile workforce connectivity a critical issue for New Jersey employers and employees.
“Millennials who are choosing to live in urban environments will not take a job in a suburban office park if they can’t make that last mile connection,” said Cheryl Kastrenakes, executive director of the Greater Mercer Transportation Management Association (TMA). She noted that the same is true for workers at remote distribution centers faced with walking half a mile on a busy road with no sidewalk.
This has given rise to transportation solutions designed to help companies attract and retain talent by bridging the gap between mass transit and the workplace. Jon Carnegie, executive director of the Alan M. Voorhees Transportation Center at Rutgers, outlined the expanding landscape of innovative mobility services that include on-demand ride-sharing and car-pooling and micro-mobility solutions like bike and scooter sharing. Carnegie noted that Rutgers has partnered with NJ Transit and is awaiting approval of a grant to test a low-speed automated shuttle.