1. Regional Strategy for Location of Distribution Facilities in NORTHERN NEW JERSEY MOFFATT & NICHOL E N G I N E E R S Talking Freight Workshop Presentation May 19, 2004

2. MOFFATT & NICHOL E N G I N E E R S Link Transportation Efficiency with Local Economic Development derived from the movement of foreign and domestic cargo flows through the region’s major intermodal facilities, while reducing truck VMT through the region. NJTPA REGION AS A GATEWAY TO THE GLOBAL MARKET OBJECTIVE Thus enhancing the

3. MOFFATT & NICHOL E N G I N E E R S The movement of freight generates a demand for advanced distribution facilities capable of performing value-added services. This is a growth market linked to the future expansion of foreign trade through the PONYNJ. A MAJOR ENGINE OF REGIONAL ECONOMIC DEVELOPMENT The NY/NJ/CT Tri-state Metropolitan Region is the largest Consumer Market on Earth.

4. MOFFATT & NICHOL E N G I N E E R S MEGAMALLS Mastodon : Extinct animal Distribution Center = Key Land Use to the New Economy OR NORTHERN N.J.’s HOTTEST FUTURE REAL ESTATE MARKET

5. MOFFATT & NICHOL E N G I N E E R S Growth Forecast for Port Of Port Of New York and New Jersey TRENDS: a) 2000 to 2001 cargo volumes increased by 8.7% to 3.32 million TEUs b) First 9 months of 2002 increased by 8.5% over previous year c) In last two years cargo volumes have increased greater than forecasted 50 Foot Channels 40-45 channels

6. MOFFATT & NICHOL E N G I N E E R S DIVERSION OF WEST COAST ASIA TRADE TO EAST COAST PORTS Shift 2.5 million TEUs: from West-Coast Ports to PONYNJ by 2020 Today: 80% 2020: 73% Today: 6% 2020: 13% Singapore Colombo Kaohsiung Hong Kong Kobe Gioa Tauro Jiddah LA/LB Landbridge Algeciras 10-State Market Area PONYNJ Channel deepening/large container vessels/capacity constraints for transcontinental rail landbridge will cause shift in shipping patterns

7. Geographic Distribution of 1998/99 Containerized Trade within 17 State Market Area Source : Moffatt and Nichol Engineers, Based on adjusted PIERS data C A N A D A Chicago, IL Detroit, MI Buffalo, NY Cleveland, OH Ogdensburg, NY Saint Albans, VT Houlton, ME ATLANTIC OCEAN 75 mile 200 mile 300 mile 400 mile Baltimore, MD Halifax Montreal Ottawa Toronto Newark, NJ Boston, MA New York, NY Port of NY & NJ REGION POPULATION 103,885,761 38.40% Number % of Total GROSS STATE PRODUCTS 3,349,934 41.3% Millions of Current US$ % of Total TOTAL CONTAINERIZED* TRADE 6,901,512 39% TEU’s % of Total

8. MOFFATT & NICHOL E N G I N E E R S NJTPA REGION LOCATION MAP WITH HIGHWAY AND RAIL NETWORK Legend US Route NJ Interstate Railroads NJTPA Region PONYNJ 75 miles Newark Airport Newark Airport Newark Bethlehem PA

9. MOFFATT & NICHOL E N G I N E E R S Legend Mileage Cost Ranges $10 (2) to $30 $30 to $60 $60 to $90 $90 to $120 $120 to $193 ROUND TRIP TRUCKING COST (1) FROM EPAMT (LOADED 1st LEG, 85% EMPTY 2nd LEG)--1999 75 mile radius Connecticut New York Pennsylvania New Jersey PONYNJ Notes 1.Truck operational costs ($1.31/mile loaded) were calculated by amortizing Vehicle Depreciation; Insurance; Fuel Costs; Driver Wages; and Overhead and Profit on a per mile basis 2. Minimum cost for trip, even if less than 1 mile

10. MOFFATT & NICHOL E N G I N E E R S EAST COAST WAREHOUSE TRENDS TRADITIONAL STORAGE WAREHOUSE SYSTEM Container Terminal Container Trucking Public Warehouse Regional Trucking Regional Warehouse Containerized Cargo from Asia Consumer Retail Store Trade-off between economies of size versus land price Definitive trend to relocate beyond 100 mile radius Little demand with 75 mile radius

11. MOFFATT & NICHOL E N G I N E E R S WEST COAST WAREHOUSE TRENDS CONSUMER DISTRIBUTION SYSTEM Third Party Shipper (UPS, FedEx, etc.) Private Home Local Components Internet Fulfillment Container Terminal Container Trucking Containerized Cargo from Asia Value-Added Distribution Center

12. MOFFATT & NICHOL E N G I N E E R S WATSON INDUSTRIAL CENTER P.V.A

13. DISTRIBUTION CENTER ACTIVITIES Basic Services Storage Transloading Customs Foreign Trade Zone Freight Forwarding Trucking Value-Added Services Logistics Barcoding Sorting/Labeling Marketing Materials Scanning Repacking/Pick & Pack Kitting Packaging Design & Manufacture Manipulation Repair Internet Fulfillment Special “Piece” Manipulation XXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Old Style Dist. Traditional Warehouse Just-in-Time Distribution Center Retail Distribution Center Consumer Distribution Center Evolution to More Complex Process. MOFFATT & NICHOL E N G I N E E R S

14. MOFFATT & NICHOL E N G I N E E R S NJTPA - “STRING OF PEARLS” Dedicated Freightway and ITS Systems Architecture Container Yard NJTPA REGION Value-Added Distribution Center Major Rail or Direct to Market

15. MOFFATT & NICHOL E N G I N E E R S Size : 50 to 150 acres… Phased Development Planned Unit Development (PUD) Employees : 500 to 3,200 Foreign Trade to Domestic Ratio : 60/40 or 100,000-250,000 TEUs/yr. Activities : –Transloading –Distribution Center –Drop-Shipping –B2B and B2C THE NEED: REGIONAL VALUE-ADDED DISTRIBUTION CENTERS NEAR PORT AND MARKETS STRATEGY: LOWER VMT/AID PORT

16. MOFFATT & NICHOL E N G I N E E R S DEMAND FORECAST FOR DISTRIBUTION CENTERS IN NJTPA REGION 2000-2040 T I M E P E R I O D 2000-2010 2010-2020 2020-2030 2030-2040 150 500 900 1400 010020030040050060070080090010001100120013001400 ACRES Absorption rate of 35 acres/yr for next 40 years

17. MOFFATT & NICHOL E N G I N E E R S KEY BROWNFIELD SITES Portway Corridor Overview Portway Alignment And Brownfields Brownfield sites Phase I Portway Alignment Figure 1

18. MOFFATT & NICHOL E N G I N E E R S NJTPA VALUE-ADDED DISTRIBUTION CENTER LOCATION CRITERIA Capable of being linked to the port’s maritime container terminals by weight-unrestricted, preferably on dedicated freight-ways; Direct access to network of interstate highways; Situated within Foreign Trade Zone (disjointed FTZ); Location makes possible rapid unloading of containers and immediate return to container yard;

19. MOFFATT & NICHOL E N G I N E E R S NJTPA VALUE-ADDED DISTRIBUTION CENTER LOCATION CRITERIA, continued Convenient for use by B2B & B2C package freight distribution to NJ, NY, PA, CT conurbation; Accessible to inbound domestic production inputs( e.g. Rail and Truck); Accessible to a two-tiered labor pool; and ability to develop Planned Unit Developments (PUDs)

20. MOFFATT & NICHOL E N G I N E E R S RECOMMENDATIONS The State of New Jersey working with the Port Authority and local govts. should prepare immediately to “land bank” (450 acres) of recommended sites for development of distribution centers, adjoining container yards, and linked dedicated freight-ways. This integrated economic development program should be seen as a single, revenue producing project like the “Alameda Corridor”, and should seek and receive federal funding assistance for upgraded infrastructure and improved connections to regional transportation grid.