NEW JERSEY CLEAN AIR COUNCIL ANNUAL HEARING
April 9, 2008
New York Shipping Association Remarks
Presented by Frank M. McDonough, Esq.
President

I also reported that, as a result of the many improvements in equipment and terminal operations, industry had reduced emissions by a minimum of 30-35% in every measured category or a normative 45% across the board (emissions per ton of cargo.) Some of those improvements resulted from switching to cleaner fuels, using more electric powered equipment, purchasing on-road compliant equipment, installing idle shut downs on equipment, switching fuels in equipment and buildings, new lane systems and, of course, more efficient gate systems.

Since then our members have implemented a number of other programs and expanded on earlier initiatives. I will briefly touch on some of the most important here.

1. Establishment of No-Idling Zones throughout the port.
   NYSA worked with the terminal operators to establish and mark the zones using DEP signage. New York Container Terminal, as a New York facility, established a separate program with its own signs and an incentive program. Terminals also installed plug-ins for select yard equipment, purchased equipment idle shutoffs and implemented equipment idle policies.
   

2. Support of PANY/NJ Port Inland Distribution Network.
   As you will recall, NYSA supported the PANY/NJ Port Inland Distribution Network with the first demonstration project, a barge service to the Port of Albany. NYSA worked with the principals, potential customers, and transportation agencies to gain support for the program which would remove trucks from the highway and encourage the regional move of cargo by water. Barges achieve 576 ton-miles per gallon which is 163 ton-miles more than rail and 421 more than truck.
   To encourage use of the program, NYSA applied the barge rate to containers shipped in this program; which was a savings to the carriers of $105 per box. Unfortunately, for a number of reasons, the program failed; but we continue to work with locations like Bridgeport Connecticut; and I have had several discussions with the State of New Jersey on Camden possibilities.
3. Advocacy of the Marine Highway System.
   NYSA has worked with various Administrations in Washington and with the ILA to promote Short Sea Shipping. (Marine Highways is the new MARAD designation for the program.) If implemented, the program would remove trucks from the highways and move regional cargo by water between our port and points north and south. Currently we move approximately 19,000 containers annually by barge to Boston. Last year Congress adopted the Marine Highways program in the transportation funding bill.
   

4. Lobby for funding of an electrified truck park system.
   For more than three years NYSA has attempted to establish funding for electrification of truck parks. MMMCA, a brother organization, has worked with us on this program and two of its members have committed a total of 20 acres for electrified truck parks near the port. This would remove trucks from neighborhoods; and eliminate idling required to heat cabs and operate refrigerated units. We also urge NJDEP and NJDOT to designate other truck park sites; and to consider electrification of warehouse parking lots.
   

5. Creation of Port Support Zone/Freight Logistics Area Programs.
   These two programs are the brainchild of NYSA. Implementation will result in removing port related operations from residential neighborhoods, reduced idling, increased use of rail, and removal of trucks from local roads. They also take advantage of the Portways and Portfields programs. We continue to push the programs with the assistance of NAIOP, Nation’sPort, PlanSmartNJ and others. If necessary, we may even seek legislation to further the program.
   

6. Creation of Liberty Corridor; and designation of port related projects.
   Liberty Corridor was originally conceived and designed by NYSA and one of its members. It was then expanded and sponsored by Senator Menendez; and funded by Congress. One purpose is to improve last mile roadway links to reduce congestion; and increase rail usage through rail improvements. A major benefit is improved air quality. In 2007 almost $57M was allocated to seven port-related projects, which the state endorsed.
   

7. Railroads Shipping Fuel Efficiency and Potential for Emission Reductions.
   Freight railroad fuel efficiency has risen 80% since 1980. Railroads are investing in “cleaner and greener” technologies to improve fuel efficiency, which include new locomotives, locomotive monitoring systems, training, information technology, and idle reduction technology. Based on the increased efficiency, Class I freight railroads used 3.3 billion fewer gallons of fuel and emitted 37 million less tons of CO2 in 2006 as compared to Class I freight railroads during 1980.
   
   One freight train takes the equivalent of several hundred trucks off the highways. If ten percent of the freight that is currently moved by trucks were diverted to rails, the fuel savings would exceed 1 billion gallons per year. Additionally, the American Association of State Highway and Transportation Officials (AASHTO) has estimated that, if ten percent of long haul freight that is currently moved by trucks were diverted to rail, annual greenhouse gas (GHG) emissions would fall by 12 million tons. Therefore:
   

8. We created a Rail Incentive.
   It is the largest single air quality program implemented by the NYSA organization. The volume of cargo moved by rail in this port has tripled over the last decade. More than 12% percent of container movements are by rail, and last year that figure rose by 7.5% while overall cargo rose 5%. The rail incentive, a reduced charge of only $10 regardless of destination, is designed to increase that percentage and shift more cargo from truck to rail. The NYSA investment per box is as much as $100 depending on destination.
   We currently are projected to move more than 350,000 containers by rail this Contract Year (October 1, 2007 to September 30, 2008.) Each rail car can carry twice the number of containers as a truck. Another way to state it is 456 40’ containers will consume as much as 645 barrels of oil if moved by truck, and only 300 barrels of oil if moved by rail. Therefore emissions and fuel consumption are reduced by more than half.
   
   By the way, rail is up more than 7.5% in the first quarter of this year.
   

9. Negotiated new start times for extended gate hours.
   As you know, we negotiated new start times in both regular and post-contract bargaining over the last several years to create extended gate hours at some of the terminals. However, reduced cargo volumes and marginal usage has resulted in termination or reduction of some of those programs. As one of my predecessors at this podium stated, we need the warehouses and distribution centers to extend their hours; then we will have a better chance of success. Still the largest terminal in the port continues to operate its gates 18 hours/day and another terminal just extended its gate hours.
   

10. Lobby NJDOT on rail shuttle program and funding.
    We worked with Maher Terminals, one of our largest terminals, on this concept. The objective is to engage relatively minimal state resources to re-establish short line and rail shuttles with NJDOT funding, utilizing existing track, to move cargo to concentrations of warehouse and distribution operations primarily within 75 miles. Obviously the shuttle would eliminate a lot of regional truck trips and “street turns.” The Raritan Center shuttle (which we had nothing to do with) is one example.
    

11. Institute Productivity Training.
    I personally drafted a new Productivity Training Program for implementation at our Training Center. The quicker we get the vessel out; the less emissions from that vessel. Productivity has risen by 30% and we have doubled our throughput over the last decade.
    

12. Use of alternative fuels.
    NYSA encouraged the development of a Discussion Agreement under Federal Maritime Commission (FMC) Rules. (This agreement as well as an environmental committee comprised of the carriers arose out of an attempt to develop a compliance agreement with NJDEP more than two years ago, to design a long range plan to reduce diesel emissions.) In any case, all of the New Jersey container terminals joined. It took more than a year to apply for and get approval from the FMC but it was finally implemented back in December; and one of the first actions was to create an environmental committee.
    
    That committee is now looking at the use of alternative fuels, fuel co-ops, new equipment and other emission reduction options in addition to the ongoing programs. Those programs, as I noted earlier, include a switchover to ultra-low sulfur diesel in equipment and buildings; new on-road compliant equipment; electric cranes in lieu of diesel; automatic shut-offs on yard equipment; a plug-in locomotive; testing of LNG hostlers; testing of hybrid/hydraulic equipment; equipment plug-ins; on-highway certified engines; fixed reefer receptacles; etc.
    

13. Investigate Other Emission Reduction options.
    Our carrier group has also created an environmental committee; and in addition to continuing their efforts on ballast water programs and right whale issues, they are reviewing options for reducing emissions. One of those is vessel speed reduction. The Port Authority sponsored such a program more than a year ago and several of our carriers signed up, but it didn’t fly apparently because of the already reduced speeds in our very narrow and dangerous channels. However, we believe there may be an opportunity to re-consider the program. We have surveyed our vessel masters and continue to discuss the possibility with the pilots and the Port Authority.
    

14. Determine Pollution Costs of Reduced Port Operations.
    We conducted an analysis to determine the additional infrastructure and pollution costs of reduced operations at the Port if for any reason cargo was diverted to other East Coast ports. Using the Federal Highway Administration model, our consultant determined that the total transportation and environmental costs to the region, due to a shift of cargo to other ports, could be as high as $1.2B per annum.
    

15. Carbon Footprint Assessment for the NY/NJ Port Terminals
    In an effort to better understand greenhouse gas emissions associated with port terminal operations, NYSA undertook an initial carbon footprint assessment. The carbon footprint assessment utilized existing emission studies and focused not only on emissions from commercial marine vessels operating within the port, but also from six commercial marine terminals and five auto-marine terminals, and associated locomotives. The goal of the assessment was to lay the groundwork to calculate air emissions from an actual inventory of port-related equipment, which can be used to target future emission reductions in the most practical manner. These efforts are part of an ongoing process which will include refining the emission estimates as changes at the port terminals occur.
    
    I would also note for the record that on March 14th the EPA established new emission standards for Locomotives and Marine Compression-Ignition Engines. The new emission standards will apparently continue to reduce emissions associated with port operations. The three-part EPA program includes tightening emission standards for existing locomotive and large marine diesel engines when they are remanufactured, sets near term emission standards for newly built locomotive and marine diesel engines, and sets longer term emission standards for newly built locomotive and marine diesel engines that reflect the use of high efficiency air pollution controls.
    
    However, while I point this out, I am no expert in this area and rely solely on the EPA notices. According to those notices, when the regulations have been fully implemented, it is anticipated that Particulate Matter (PM) emissions will be reduced by as much as 90% and that Nitrous Oxides (NOX) emissions will be reduced by as much as 80%.
    
    Finally, speaking of the EPA, we stand solidly behind the EPA, the World Shipping Council, the AAPA and our West Coast colleagues in encouraging the International Maritime Organization to adopt engine and fuel requirements for ocean-going vessels which will meet appropriate standards. Just last week the Environmental Committee of the IMO approved proposed amendments to MARPOL Annex VI regulations to reduce harmful vessel emissions. The steamship lines pushed hard for this international resolution of a recognized challenge.
    
    As the Governor has said on more than one occasion, this Port is the major economic engine in New Jersey. We create more than $20B in economic activity, support more than 230,000 local jobs and deliver prosperity to New Jersey’s citizens. We also live here. And we are as concerned as anyone else about the environment that we live in.
    
    That completes my comments. Thank you.