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Issue 8 2020 - FBJNA


///MIDDLE AMERICA AND LOGISTICS


A BNSF container train rolls across the prairie toward the pot of freight gold in Middle America’s logistics rainbow. (Photo courtesy of BNSF.)


Middle America: A logistics gold mine manages to shine through COVID-19


By John Jeter


It’s early April, a global pandemic is sweeping the globe. A helicopter waits on the tarmac at Rickenbacker International Airport. By the middle of the month, the U.S. death


toll from COVID-19


would become the highest in the world. By April 29, more Americans would die from the novel coronavirus than were killed in the Vietnam War. On Monday, April 6, a


Kalitta Airlines freighter from Shanghai lands at the Midwestern air


cargo hub


with a planeload of lifesaving equipment, destined for Michigan; Ford Motor Co. has retooled a plant to build ventilators. From the 747 to the ’copter, a forklift transfers the precious freight. “They essentially life-


flighted it up to Detroit from our ramp in Columbus, Ohio,” says Bryan Schreiber, Manager, Business Development, Business Cargo at Columbus Regional Airport Authority. “That was the speed and the criticality of what we were doing in the early days of COVID, trying to help the country prepare to combat it.” Today, the nation’s crossroads has kept up with


the pandemic-driven surge in cargo, especially e-commerce, C-suiters say. Nevertheless, the epidemic undeniably injected


fluctuations, executives also acknowledge their geographical sweet spot, at the same on


their


warehousing and distribution- center infrastructures to meet


time remarking respective robust


accommodate the world’s largest aircraft. Intermodal centers here play host to as many as five Class 1 railroads and boast coast-to-coast, north-to-south interstate trucking arteries. Barges navigate America’s great rivers. “If you look at supply chains


and industrial development across the country, I think the Midwest has been the flower child that continues to grow, and it’s easy opportunity,” says Chris Gutierrez, president of KC SmartPort. “Then you put COVID on top, and it grew substantially.” Forbes reported in August a


Kansas City’s intermodal assets include Class 1 railways, immediate access to major north-south, east-west interstates, airports with expansive air-cargo facilities and barges, like this one. (Photo courtesy KC Port)


volatility into the supply chain—including intermodal. As Chris Luebbers, AVP, Planning


challenges. From Kansas City to


and Yield, for


Norfolk Southern, puts it: “Our business experienced the most dramatic decline and the most dramatic increase in a matter of a few months.”


Sweet Spots While experiencing similar


Columbus and from Illinois to Indiana, airports can


129% year-over-year explosion in U.S. and Canadian orders as of April 21, with a jump of nearly 150% in all online retail orders, Every executive


interviewed here says intermodal


“I have been beating the drum over


the last year and a half [for] somebody to build a spec temperature-


controlled or temperature-ready, cold-storage-ready building.” -- Chris Gutierrez, KC SmartPort..


assets such as


trains and planes are picking up speed in Middle America’s


Rodrigo Flores, the railway’s Vice President, Automotive & Intermodal. Likewise, the contagion


had a “significant impact” on OmniTRAX railway’s Illinois carload business, says Doug Ernstes, Vice President, Commercial–North Region. The company, which operates nearly a dozen regional and short-line railroads in 12 states and three Canadian provinces,


“Our network is in the best


condition it has ever been.” -- Tom Williams BNSF.


logistics belt. The Kansas City Southern


Railway Co., for instance, experienced a second-quarter slowdown in U.S. and Mexico intermodal volumes, then saw record-high volumes in the third quarter, says


mostly witnessed reductions in oil and gas production and decreasing demand for sand used in fracturing wells. “We


are seeing demand


return, as predicted, since the summer months, albeit at below pre-COVID levels,” he says, adding that two of its Chicago Rail Line customers are adding capacity or modernizing facilities, which will


through next year. Fall then Rise


Meantime, BNSF also saw numbers fall—and then rise. The rail giant that serves


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increase car loadings


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