Unlike the state's financial services and pharmaceutical industry, which were hard hit by the current recession, the logistics industry remains a bright spot in the region's economy. The industry accounts for nearly 11 percent of the total state gross domestic product, according to a 2008 Rutgers University report. In 2008, the New York-New Jersey port industry supported a total of 269,990 jobs in the region.
Proactively planning for the future is critical, claims Strauss-Wieder. She asked the audience, "Do we want to be a hub or a spoke in the supply chain?" The port needs to market itself as a distribution platform for North America to avoid being bypassed for a region with more favorable business climates, she said. Additional strategies include remaking industrial areas into freight villages, and bundling services.
"In the last 10 years, the port has done well in terms of annual growth," said Moderator DiCola. "Compared to emerging ports on the East Coast, New Jersey has held its market share, if not increased it. So from a trade standpoint everything is great."
However, the changing logistics network may lead to choppy seas for the industry unless imminent concerns are addressed. On the downside, the port is facing competition from other ports and regions, as well as the opening of locks in the Panama Canal in 2014, larger vessels, and costly and complex fees.
On the upside, DiCola admits that although the cost of doing business around the port is high, "it's also a more efficient way of doing business. A lot of the cost is sometimes beyond our control, and that is where relationships with private partners would help in increasing capacity." The port offers the greatest concentrations of distribution centers and warehouses in the U.S., totaling 855 million square feet of industrial space, including more warehouses exceeding one million square feet than anywhere else on the East Coast, according to Strauss-Wieder. The state's population size, density and per capita income are also pluses.
When asked which site selection criteria are most important when attracting operations to the Port., Lebovitz said, "Customer strategy is different every time, but it always comes down to freight cost."
"We have a competitive advantage to some other ports because of our innate infrastructure capacity," added Francois. He emphasized the opportunities that exist today to increase trade volume and prevent a drop off in business in the future. "We are at a key inflection point right now. The next key dynamic is dredging to accommodate the larger ships." In addition, Francois pointed to basic investments required in infrastructure, logistics, security, and tenant improvements. With the opening of the Panama Canal, the 10-year project to replace the Bayonne Bridge is also an essential infrastructure improvement, he added. "We are looking at maintaining other facilities along the Upper New York Bay such as the auto terminal."
"The problem that New Jersey continues to have is that reactionary and regulatory time is slow. Things are moving so much faster in the world economy that you can't sit and wait for it to come to you. You have to be on your toes. When you see opportunity, you have to give it a big bear hug and help it along."
Looking ahead, Craig said, "The danger we run into as a region is that if there isn't a solution that can be communicated to the shipping public, other places will start to absorb that freight, and once the shift begins to happen, the struggle to bring it back becomes greater and greater. We need to become aggressive as a port community and to bring awareness to what will take place."
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Founded in 1970, NAIOP New Jersey is a chapter of NAIOP, the nation's leading trade association for developers, owners investors, asset managers and other professionals in commercial real estate with 18,000 members in North America. NAIOP advances responsible commercial real estate development and advocates for effective public policy. The New Jersey Chapter is comprised of more than 550 members who benefit from a variety of business and networking opportunities, education and professional development programs, research on trends and innovations and strong legislative and public affairs representation. For more information, visit www.njnaiop.org.