by R. M. Larrabee

Director, Port Commerce Department

Jan-28-2010

As we enter 2010, we can only hope that the turbulence of last year is behind us. Economic indicators are starting to show evidence that the decline in cargo is leveling off, but demand by the U.S. consumer, the mainstay of our business, is still fragile.

We do believe that volumes will grow, but at a slower pace than experienced in the past, and we will see increased competition from other ports in all our businesses. It is imperative that we strive to provide greater value to the supply chain, increase our port's competitiveness and make it more efficient, productive, and environmentally sustainable.

In 2010, we will advance several critical initiatives. We are taking steps to resolve the Bayonne Bridge vessel clearance issues. Potential solutions are being explored to provide a new clearance of 215 feet, and I am confident by the end of the year we will have a clear path forward. Channel and berth deepening projects will continue and remain on target for completion in 2014. In addition, rehabilitation of several berths is under way to provide three different locations to accommodate heavy lift cargo in the port.

Roadway improvements are also an integral component of our plan. We're progressing with the North Avenue curve, and we will advance projects in 2010 to add more lanes on McLester Street and widen Corbin Street. Our goal is to ease the flow of trucks at our terminals, while enhancing ramps and access roads to facilitate smoother connections with highways and inland points.
Engineering work has started on our fourth intermodal Expressrail facility to complement Port Jersey. This facility is located on a 30 acre parcel adjacent to Global Marine Terminal and is to be operational by the end of 2013. The National Docks project is targeted for completion in mid-2010. This important rail project will add capacity on the Conrail route between the port and CSX's mainline serving the U.S. rail network.

Over the last several months we have experienced intermittent, at times severe, congestion problems in Port Newark. We are actively working with our port partners on this issue and firmly believe that changes taking place will ease congestion and improve service levels.
One of last year's important accomplishments was the development of a Clean Air Strategy for the port, which will enable us to accommodate port growth while improve air quality. The strategy contains actions to reduce emissions and greenhouse gasses from all port-related sources. We will soon begin accepting applications for a key element of the strategy, the Truck Replacement Program. The goal of this program, which is funded by a $7 million EPA grant and a $21 million Port Authority commitment, is to phase out older trucks serving the port by providing the trucking community with financial incentives to replace these older trucks with cleaner and more fuel-efficient vehicles — helping to preserve local trucking jobs and stimulate the economy. In addition to actions in the strategy, we expect to reduce over 1,100 tons of nitrous oxide by 2011 through continuation of our Staten Island Ferry engine retrofit program and the repowering of engines on tugs and workboats that operate in the harbor.

Despite uncertain economic times, we're confident that staying the course with our capital investments will not only enhance our port's competitive position but will provide the facilities and services necessary to conduct your business today and into the future.
But this will also take a cooperative effort on the part of all parties in the port's supply chain including our container terminal operators and longshore labor. We must all work together to reduce costs and to increase efficiencies and productivity.
As we enter into a new decade, we encourage you to join us in moving forward. Let us work together toward a successful and prosperous New Year and making our port a better place to do business. 

Sincerely.