I could see that happening to the Seaport in 25-30 Years. It will end up like Cambridge Mass back in the late 70's after all the shoe factories closed up again when the Biotech sector runs its course.
Remember Technologies will become cheaper and more efficient overtime which will put a lot of corporations out of business.
Every cycle runs it's course.
Great post
That's where having a robust and diversified supply chain really helps. At the top levels of the state MassDOT's really been on-the-ball about getting us in control of our own destiny with shipping costs.
At the top of the heap you've got
intermodal containers...come in by rail or ship, container gets lifted onto truck. It's majority rail here because our seaports are small and NY/NJ, Halifax, Baltimore, and Norfolk so dominate the East Coast...but diversity is important with supply chains so Massport's got those plans to dredge the Harbor for PANMAX ships and do redevelopment (hopefully well cost-controlled) at the local ports.
With intermodal and today's trucking rates, the ideal range for a terminal is what you can ship round-trip in one work shift. It's called "drayage" distance, and league-average for the road network in the Northeast is 200 miles round-trip (i.e. 100 mile radius to the customer, then trip back to home base). Within that drayage range trucks are hands-down the most cost-effective shipping method, and that's why you don't see too many rail customer sidings left in a small state like MA except for the ones who do shipping of goods ill-fitting for trucks (e.g. aggregates like crushed stone and sand, scrap metal and construction debris, racks of lumber for lumber yards, chemical tankers, etc.) or are just flat-out massive anchor customers. Beyond drayage range the trucking rates start getting inferior and other modes like rail start becoming superior, except for a minority of bulk goods that are unusually time-sensitive and need the flexibility of at-will "GO NOW!" truck schedules. At 500 miles, where cost for mandatory rest periods for the drivers becomes a big factor, it starts getting stupid to waste money on trucks except for a shrinking niche of time-sensitive stuff. Rail becomes extremely cheap, and air freight starts eating into the time-sensitive niche. Cross-country trucking is in fast decline. It'll always be a significant minority, but it's undergoing a very big market correction shaped by shifting cost-benefit.
It used to be that all drayage into New England came out of NY/NJ or Albany, where the big rail yards are. Those trucks would pound the shit out of the Pike in the Berkshires and I-95 up through Rhode Island all hours of the day with out-of-state trucks and truck drivers. It left New England in a prone position to economic shocks affecting shipping prices given the singular dependency we had on New York state. The smartest thing MassDOT has done in the last 20 years was swing that humongous $100M CSX deal for Beacon Park, the relocation to Worcester, the double-stack clearance project on the B&A mainline so they could stack 2 shipping cubes on top of each other, and the buy-up of CSX assets inside of Worcester. That plunked a huge-volume intermodal terminal right in downtown Worcester by all the radial highways and put all of New England as far north as Greater Portland into drayage range from a home base in Central MA.
That got lots of all-day trucks off the highways and assigned to off-peak shifts that didn't fuck up traffic as bad, saving the state money. It got trucking companies to start relocating ops into Massachusetts, paying MA taxes and RMV fees. They hired Massachusetts workers at MA income tax. It perpetuated more trucking companies
unrelated to intermodal to move into the region to glom off the gravity well created by this more robust supply chain. It got us more substantially into transporting new automobiles by train, with huuuge state-of-the-art autorack terminals going up in East Brookfield and Ayer and Rhode Island spending millions so they could unload foreign cars from ships at Quonset Point and ship them by rail up to the big distribution points in Central MA. Now we've got more trucking companies with fleets of autoracks situated around those terminals, delivering cars to your local dealership, and giving the dealers more flex to price-war each other because their shipping costs are attractively low.
Most importantly of all, it got CSX's arch-rival Norfolk Southern hot to buy its way into New England. They entered into a 50/50 ownership share with Pan Am for the Patriot Corridor Albany-to-Ayer to set up a competing intermodal facility in Ayer. Now instead of having one huge multi-billion railroad conglomerate (CSX) that was poorly motivated for the longest time to invest here, you've got two billion-dollar conglomerates in an arms race providing direct price competition. And another trucking gravity well deepening up the other end of I-190 solidifying that supply chain.
This is all in the early stages of paying dividends, but it's starting to click in a big way. It gives Massachusetts not only some very robust price stability and competition on shipping rates by having drayage originate here instead of New York, but we now sort of wag the dog for all of New England because of the multi-state drayage range out of Worcester and Ayer. As well as a leg to stand on for trying to get *modest* bits of intermodal growth by boat. At least enough to rationalize the cost of dredging for PANMAX ships and take a calculated risk that it'll attract something net-positive.
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Now...that's the top of the heap. And it's already got big coattails. Next on the chain is
transloading. Instead of taking an unopened container off one means of transport, plopping it on another, and going by region-wide drayage distance from a big integrated terminal...transloading is when an independent intermediary offloads the goods from the container or vehicle and re-loads it onto a new container/vehicle. In most cases that middleman is a warehouse of some sort that handles all the logistics. With a rail transload they get a load of boxcars dropped off, unload them, classify them, and re-load on trucks. Or, occasionally, it's a rail customer that doesn't have a siding of their own and drives their own trucks to the rail yard or somebody else's siding to unload their goods. Most often, transloading is all-truck: inbound truck --> classification or storage at warehouse --> outbound truck.
Transloads tend to occupy the midrange and middle-small range on the scale. Or specialize in something (like a cold storage warehouse for perishables) rather than being generalists like the intermodal terminals that only care about moving the container, not what's inside it. Transloaders tend to ship shorter distance; you'll find a lot more transload warehouses ringing Route 128 while the intermodal biggies are out in 495-land. And they tend to cluster together (that supply chain gravity well exerting its influence!), which is why the area around Anderson RTC commuter rail station is a shitload of warehouses taking advantage of the easy access to 93 and 128.
The coattails trickle down. Bring an influx of trucking supply chain and cost control into the state with the huge intermodal terminals, and it gets much easier for the transloads and warehouses to glom off it and make a living. Very soon after Norfolk Southern bought its way into the state Tighe, a big warehouse chain, opened up a new location on the Lowell Line in Winchester near Montvale Ave. and started taking healthy number of nightly boxcars that get loaded onto trucks. A direct-competing warehouse is trying to build a few miles up in Woburn right now to go after similar market niche.
The transload middlemen then end up encouraging more vertically integrated warehouses and trucking operations to set up shop. Amazon's building a 1 million sq. ft. warehouse in Fall River. Amazon is as brutally cost-efficient as it gets, and despite relatively high tax rates and employee salaries here vs. elsewhere the trending with those deepening gravity wells on cost control looks so good long-term that they went for it. Probably will see more big warehouses following Amazon's lead into the state.
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Now you're at the level of cultivating individual businesses. Picking sites where they can cluster, because clustering creates those industry-specific supply chain gravity wells just like with the shippers create the gravity wells of shipping options. One of the reasons my hometown's last outpost of thriving light industry is the cluster of spring-makers who survived their industrial park's wipeout is because they can pool their shippers for some goods. Small shops can afford to set up knowing they won't be plowed under by shipping price shocks, because the state has the upper hand on that and is steering the inertia towards stability and greater price competition. The shops that only need to ship a couple small trucks of widgets at a time don't get punished by their meager volumes because the supply chain is broad enough to offer consistently good rates over a very wide spread of volumes.
These shops then start to create a gravity well for skilled technical labor. The local community-technical college starts offering more trade courses and certifications, because hiring young people with an associate's degree and a technical certification who are going to stick with their chosen craft and chosen employer for the long haul is money in the bank. (Also one of the few non-mistakes my hometown made when the office parks shat the bed...the adult ed. center and city technical high school suddenly got a lot better-funded and started sending a lot more graduates to those surviving spring factories). Greater Boston definitely needs that kind of trades gravity well. All those MIT geniuses in Kendall and the Innovation District who we're expecting to invent Jetsons Shit and miracle drugs are going to need somebody to oversee the fabrication machine, do quality assurance, schlep as lab grunts. It can't all be non-sentient robots, MBA's, and engineers who get their hands dirty in AutoCAD instead of axle grease making that Innovation economy work. Everybody's predicting a big swing-back in post-secondary enrollments back into the trades after 25 years of swinging too far towards university degrees. Where do you think supply and demand intersect for that talent? Near a city with lots of resources, with lots of complementary supply chain gravity wells supporting both the businesses and the talent, where the trade jobs and trade training are accessible.
Not in one of those keep-away 70's sprawl-tastic suburban industrial parks that are all rapidly going tits-up. Someplace with appropriate density and access to the supply chain. If not in immediate spitting distance of the CBD, then at least very well-accessible to all the resources of the urban environment, and offering places where the trades people behind the supply chain can put down roots. That is most definitely not happening caged up up in some containment cul de sac like a shameful secret, under constant hostility from local-yokel NIMBY's or planning boards forever lusting to evict the businesses for more condos. This is what our planning institutions have to wrap brain around. The trending
very strongly suggests that economic diversity, stability, and sustainability means riding these supply chain gravity wells to the hilt. It means cultivating the trickle-down effects from it so it makes the state attractive for business even for the smallest shops. It means riding the coming trades wave so we keep our talent supremacy robust as the education demographics in this country start changing a lot. And it means connecting the dots that all these things feed into each other.
It's a big fuckin' deal. Land use is sort of at the bottom of the trickle-down pile, but it needs to serve those gravity wells described above that help keep the economy diverse and self-correcting. Are our planning institutions tasked with determining land use up to that? (Short answer: Not really. Top-level the state has comparably above-average foresight. Not really saying a whole lot when you look at our bumbling neighbors, but they're sticking to the script faithfully and reaping some benefits. Boston/BRA, Somerville, Cambridge, etc. in the urban core? They have an awful lot to learn about balance and staying out of their own way before they're trustworthy on this. But 80% of our sprawls-ville 'burbs and bedroom communities are abso-fuckin'-lutely hopeless provincial wastelands of fear and hostility. They're going to pay a price in some future economic downtown for their short-sightedness.)
