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Issue 6 2019 - FBJNA


Midwest Inland Ports, Intermodal Strategies


By Harrison Donnelly


With their promise of reduced port congestion and greater use of energy-efficient rail, inland ports have become an integral element in the distribution infrastructure of the Midwest region. Linked by direct rail lines


with maritime ports, these land-based distribution and storage facilities are enabling rail lines and shippers to achieve greater efficiencies, by connecting the internal waterways of the St. Lawrence Seaway and Great Lakes to the great highway and rail hubs of the nation’s heartland. Evidence of the success of


inland ports and associated logistics parks can be found from Kansas City, where a logistics park served by BNSF Railway has seen a surge in e-commerce fulfillment, to facilities near Charlotte, NC, that have seen tremendous increases in distribution since the opening of a Norfolk Southern (NS) intermodal terminal about a decade ago. There are three other rail- intermodal facilities in the area as well.


Big Advocates


Indeed, rail lines have been among the biggest advocates for this rail-intermodal strategy, which they see as a way of extending services deeper into their customers’ supply chains and minimizing the total cost of distribution. “Ultimately, inland ports


help move congestion out of coastal ports and provide an efficient alternative to off-loading from ships,” said Colby Tanner, assistant vice president of economic development for BNSF. “These facilities offer extensive space for containers and trailers with easier access for the customer. Our customers that use our inland facilities are targeting their goods toward population centers in the middle of the country. Logistically, there


is not a more efficient way to move shipments for this purpose than by rail.” The concept of strategically


locating these logistics facilities closer to the markets they serve, rather than the maritime ports where products arrive, also has attracted strong interest from regional


economic


organizations seeking to bring freight businesses to their area, such as Kansas City’s KC Smartport, the St. Louis Regional Freightway, and the Charlotte Regional Business Alliance. “Inland terminals and ports can provide cheaper


///MIDWEST INLAND PORTS


“The rapid growth of e-commerce has fueled development of warehouses and distribution centers, specifically with US inland-port markets such as Kansas City.”


For example, St. Louis


Regional Freightway and Georgia’s Port of Savannah, unveiled a partnership in May to create stronger rail connections between the two locations, effectively creating an inland port that will enable shippers using the fast-growing container port to distribute products more easily to interior markets. “I cannot overstate


the potential of this new partnership and the opportunities it can create to develop stronger links between our region’s world-class freight capabilities and national and global supply chains,” said Mary Lamie, executive director of the St. Louis organization. As part of a $3 billion program to increase containerized cargo


“I cannot overstate the potential of this new partnership and the


opportunities it can create to develop stronger links between our region’s world-class freight capabilities and national and global supply chains.” -- Mary Lamie, St. Louis Regional Freightway


alternatives to trucking containers from the ports to firms,” noted Antony Burton, the Charlotte group’s vice president for business analytics and data. “Through inland terminals, containers get much closer to firms, making it easier to receive containers and return them in timely manner. Inland terminals and intermodal facilities also save money as it is much cheaper to have several containers delivered at once via train rather than individual truck loads.”


capacity, Savannah officials are looking to development of a $220 million on-terminal rail facility, which will increase annual capacity to 1 million containers a year. With that expanded available capacity, planners are hoping for faster and more frequent service between the two locations by CSX and Norfolk Southern, both of which have intermodal yards in the St. Louis area. Major companies and


distributors operating in Columbus, Ohio have realized the benefits of its inland port. As part of the North American International Freight Center, Columbus’s Rickenbacker area has access to two of the nation’s largest rail providers, NS and CSX. These rail systems offer international and domestic customers the opportunity to reduce costs and increase competitiveness


through


coast-to-coast intermodal shipping options. “Inland ports are an ideal


Midwest cities like Kansas City are looking to inland ports and other intermodal techniques to develop their distribution industries. (KC Smartport photo)


-- Chris Gutierrez, KC Smartport.


way to bypass the congestion at the deep-water ports on the coast,”


said Bryan Schreiber,


manager, air cargo/business development, Columbus Regional Airport Authority. “By bringing your ocean containers inland, usually by rail, you can speed the delivery of cargo to Midwest


customers, and


containers are oſten able to travel in bond directly to the destination.” For all its benefits, sending


cargo by train to another location, where it can be stored or put on trucks, is an additional step that can slow delivery. And even advocates acknowledge that it may not be right for all types of products. “The tradeoff between


trucking and inland ports is time vs. efficiency. Trucking can be much quicker from ports in South Carolina or North Carolina, but it is much more


efficient to transport


via train. If a firm needs their goods quickly, then a trucking firm may serve them best,” said Burton.


Intermodal Strategies


Even so, there are ways to speed products to market while still achieving the benefits of such intermodal strategies. In North Carolina, for example, the Queen City Express has provided a rail link between the port of Wilmington and the Charlotte Inland Terminal since


2017, with one-day service beginning this summer. At the Midwest Inland Port in


Decatur, IL, “Extended delivery times can be a disadvantage,” said Executive Director Nicole Bateman. “But when shippers execute from a ramp with a healthy supply of trucks and chassis, those extended delivery times may neutralize when comparing port to port,” she added, noting that her facility’s ADM Intermodal Ramp offers 25-minute turn times. “When it comes to delivery


time, we actually have seen the opposite of delays,” Columbus Regional Airport Authority’s Schreiber reported. “We are able to deliver to customers more quickly via our rail intermodal, as opposed to dray drivers waiting at the seaport for container availability and access


and years then large trucking


across the countryside.” He describes how in recent one


European


company moved a piece of their US distribution off the coast and into Rickenbacker Airport’s Intermodal campus -- right next to the NS rail head. “This company was able to shave days off the time it


took to receive their boxes by switching to the Port of Virginia and having on-dock rail service bring their boxes right to what is essentially their back door,” he said. “From that facility, they are easily able to reach 50% of the US population and a third of Canadians efficiently and without the high cost of real estate at the seaport.” The array of logistics


resources catalyzed by KC Smartport illustrates the potential for regional development of integrated intermodal systems, inland ports and logistics parks. The area currently has four intermodal parks, with another intermodal distribution project being developed, according to Chris Gutierrez, president of KC Smartport. “The


rapid growth of


e-commerce has fueled development of warehouses and distribution centers, specifically with US


inland-


port markets such as Kansas City. Inland-port markets serve as critical links in the supply chain for these companies,” said Gutierrez. “Utilizing inland ports like Kansas City gives you access to land and buildings at a lower price than many crowded coastal port cities with low operating costs. Many manufacturers and distributors bring in product via rail inbound to the inland port, saving the company transportation cost and potentially traffic delays.” A key facility in the area


is Logistics Park Kansas City (LPKC), the third logistics parks project developed by BNSF specifically to accommodate the growing demand of freight rail transportation in growing metro regions. Like complexes near Dallas and Chicago, LPKC is designed to enable BNSF to seamlessly connect imports and exports through a network of high-speed corridors. Located in Edgerton, KS, the


1,700-acre distribution and warehouse development offers the combination of domestic intermodal service--container, trailer, expedited and standard service


levels--international


intermodal service, and direct- rail/carload service. It features 64,000 feet of track, 4,300 container stacking spots and eight wide-span all-electric cranes. “We have


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