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Freight Industry Trends

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Freight Industry Trends TABLE OF CONTENTS Executive Summary ............................................................... 1 Freight Industry Trends .......................................................... 2 Freight in New York City ......................................................... 3 Freight Network ....................................................................................... 4 Jobs in Freight ......................................................................................... 10 Challenges .............................................................................................. 12 Goals of Freight NYC ............................................................... 14 Freight NYC Recommendations ............................................... 15 Maritime Vision: Shift to Hub and Spoke .......................................................... 16 Rail Vision: Expand Rail Freight ........................................................................ 21 Urban Distribution Vision: Develop Freight Hubs Connected to Multimodal Freight Network .............................................................................. 24 Clean Trucks Vision: Green New York City’s Supply Chain .............................. 28 Inland Ports: A Modern Vision for Freight ................................ 29 Benefits Summary ................................................................. 30 Carlo Sixon, Yard Master at GCT New York and Staten Island resident New York City, anchoring a gross metropolitan product of $1.5 trillion, is the largest consumer market in the United EXECUTIVE SUMMARY States.1 The region’s 20 million residents expect and deserve a modern and well-functioning freight system, even though most people rarely think about the details. New York City’s current freight infrastructure was mostly developed in the early 20th century and is outdated and increasingly obsolete. Freight NYC programs New York City depends on aging highway infrastructure, yet we rely on trucks to move nearly 90 percent of freight around the city. Traffic congestion cost the local economy $862 million in 2017, hurting local businesses and impeding commerce.2 At the same time, we have under-invested in rail, maritime, and distribution infrastructure will overhaul our aging while freight volumes are projected to grow 68 percent by 2045. freight system by creating thousands To address these challenges, Freight NYC outlines the following goals for the City: of jobs, modernizing 1. Create nearly 5,000 good-paying jobs 2. Transform how freight enters New York City by investing in maritime and rail solutions infrastructure, and 3. Modernize and develop new distribution facilities reducing shipping costs. 4. Improve air quality by supporting an environmentally sustainable and resilient supply chain Inaction will cost the city’s residents and businesses hundreds of millions of dollars each year, limit opportunities for growth, and exacerbate greenhouse gas emissions. Freight NYC programs will overhaul our aging freight system by creating thousands of jobs, modernizing infrastructure, and reducing shipping costs. Freight NYC programs also recognize the need for partnerships across multiple jurisdictions—these programs complement the NYC Smart Truck Management Plan by the NYC Department of Transportation (NYCDOT). Coalitions are vital to address the predominant mode of goods movement in New York City. 1 EXECUTIVE SUMMARY FREIGHT INDUSTRY TRENDS Changes in consumer behaviors and expectations—as well as emerging technologies—have combined to transform the logistics industry. These changes affect the freight industry as a whole and within New York City. With change comes opportunity, making it an ideal moment to capitalize on these trends. E-commerce New, Faster, Business Models The Internet has changed the way we shop. Many retailers operate on a “just-in-time” model that relies E-commerce has grown, on average, 15 percent on consistent, frequent, and speedy delivery to replenish annually since 2009 and will account for 15 percent stock and keep inventory carrying costs low. Many traditional of all retail commerce by 2020.3 Today’s consumers brick-and-mortar retailers now dedicate floor space for their expect their orders to be customizable, delivered at local distribution operations to meet customer needs. no cost, and to arrive within days—if not hours. Technology Bigger Ships and “Inland Ports” Emerging technologies have provided the freight industry To remain competitive, ports now accommodate larger with many new opportunities in recent years, improving ships; however, those ships visit less frequently and workflow and lowering costs: Augmented reality is carry more cargo. Without alternatives in place, this shortening the learning curve for warehouse employees and means each cargo ship that arrives requires more trucks allows workers to “see” what is in boxes without manually The recently raised Bayonne Bridge spans to move containers, causing congestion. As a result, we opening each one. In manufacturing, 3D printing allows for the Kill Van Kull connecting Bayonne, NJ, have seen a rise of “inland ports”—ports located farther high-quality, low-cost, low-volume production and easy with Staten Island. It can now accommodate inland, away from expensive waterfront property—that are customization. And soon, blockchain technology will allow 4 larger, more modern vessels often accessible by rail. supply chain information to be distributed seamlessly across networks, making it more transparent for stakeholders and more secure. Additionally, concerns about climate change are spurring public and private initiatives promoting the use of alternative fuels for trucks, trains, and ships. FREIGHT INDUSTRY TRENDS 2 FREIGHT IN NEW YORK CITY Rapid growth in freight volume, driven by population increases and higher consumer 6 demand, is straining existing infrastructure. The City must invest wisely in upgrading its Top Commodities Moved in NYC multimodal freight systems to ensure a strong platform for economic growth. In 2016, 198 million tons of freight passed through New York City.5 The city’s freight Consumer products (e.g., TVs, furniture, clothing) network includes highways, marine terminals, rail lines and rail yards, airports, and Other (e.g., industrial inputs, distribution centers. various manufactured products) 22% 26% Freight Volumes (million tons) % % 312 Waste and 17 Construction materials MILLION TONS 9 (e.g., lumber, stone, sand) scrap metal % Estimated increase of 10 198 % MILLION TONS freight volume, both Food 16 commercial and consumer, Fuel based on expected (e.g., gas, petroleum) population and economic growth rates 2016 2045 3 FREIGHT IN NEW YORK CITY George Washington Bridge THE FREIGHT NETWORK BRON New York City’s freight and logistics network includes Long Island Sound over 90 miles of rail freight lines, nine rail yards, 1,300 miles of truck routes, three marine terminals, and one large air cargo hub, JFK International Airport—not Hudson River to mention the city’s over 170 million square feet of MANHATTAN 7 warehouse and distribution space. The import and Lincoln Tunnel export of everyday consumer goods, construction materials, and food products rely on this network to keep the city’s economy growing. NEW JERSEY QUEENS Legend Through Truck Routes BROOKLYN Goethals Bridge Freight Rail Network Upper Bay Marine Terminals Size of circle corresponds to relative size of site STATEN ISLAND Lower Bay Rail Yards Atlantic Ocean JFK International Airport FREIGHT IN NEW YORK CITY 4 GCT New York on Staten Island MARITIME INDUSTRY As a city of islands, New York City is surrounded by bodies of water both large and small. Maritime transport is an important part of the city’s freight industry and presents an opportunity to lessen the city’s over-reliance on trucking. MARITIME INDUSTRY accounts for $3.6 BILLION IN PERSONAL INCOME for New Yorkers 8 About 8% of the city’s freight arrives via New York City’s waterways each year, ELIMINATING THOUSANDS OF TRUCK TRIPS across bridges and tunnels, LESSENING TRAFFIC IN NYC 9 Inland waterways like NEWTOWN CREEK, GOWANUS CANAL, and FLUSHING BAY contribute $300 MILLION annually to New York City’s economic output 10 Over 70K RAILCARS New York City’s Marine Terminals move through New York City GCT RED HOOK SOUTH BROOKLYN each year—equivalent to NEW YORK CONTAINER TERMINAL MARINE TERMINAL 12 280,000 TRUCKS. Staten Island Brooklyn Brooklyn 5 FREIGHT IN NEW YORK CITY Oak Point Yard in the Bronx RAIL INDUSTRY The city’s businesses rely on railways to import construction materials, food products, and other commodities. These items enter via the national rail network or marine terminals, sparing us more trucks on city roads. New York City has over 90 MILES OF RAIL FREIGHT TRACK and 9 RAIL YARDS, connecting the city to the national rail network and serving local businesses 11 Businesses’ top three imports and exports via rail are CONSTRUCTION MATERIALS, FOOD PRODUCTS, and RECYCLABLES Over 70K RAILCARS = move through New York City RAIL HANDLES ONLY of the city’s each year—equivalent to % overall 12 freight 13 280,000 TRUCKS. =10k railcars =10k trucks 2 FREIGHT IN NEW YORK CITY 6 TRUCK INDUSTRY Trucks are a big part of NYC’s freight story. They present challenges but are a vital part of getting goods to New Yorkers and New York City businesses. Trucks move nearly NYC is home to over 1,300 MILES OF TRUCK ROUTES % to support industrial businesses and meet consumer demand 16 of90 NYC’s freight 14 17 There are OVER 10,000 TRUCKING JOBS based
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