This past year was somewhat of a disappointment for transportation providers. The trucking industry saw demand shrink, airlines continued to struggle on several key routes, and West Coast seaports reported a lackluster peak shipping season.

However, one of the emerging bright spots has been the rail industry, which despite lower intermodal volumes in 2007, is on track to invest billions of dollars in a number of capital improvements this year. The nation’s Class I railroads are busy double-tracking main corridors, increasing lift capacity at railheads, and expanding on-dock facilities.

One of the more prominent projects is the Heartland Corridor, a project undertaken by Norfolk Southern Railway (www.nscorp.com) to raise 28 tunnel clearances along its Norfolk to Columbus, Ohio route to accommodate double-stacked trains and reduce transit time up to 1.5 days. The project is scheduled for completion in 2010. At the same time, the project has prompted the Virginia Department of Rail and Public Transportation (DRPT) to look into the feasibility of a new intermodal terminal to the Roanoke, Virginia region. In short, the findings predict that the proposed Roanoke Region Intermodal Facility would create up to 2,900 jobs, bring in $71 million in tax revenues annually, reduce carbon dioxide emissions by 700,000 tons during the terminal’s first 15 years of operation, and eliminate 1.9 million trucks from Virginia highways.

Meanwhile, Norfolk Southern has teamed up with Union Pacific (www.up.com) on a new westbound intermodal train service that will shorten by a day the trip for standard intermodal freight from the Southeast to Los Angeles, California.  The eastbound service was launched in May 2007. The new coast-to-coast service is part of the railroads’ commitment to improve capacity, service quality and speed by shifting domestic traffic to a new, shorter route over the Shreveport, Louisiana gateway.

 Another joint venture between CSX (www.csx.com) and BNSF (www.bnsf.com) railroads reduced the transit time from Southern California to Atlanta by one day.

Railroads key to inland ports

The viability of any inland port hinges on the transportation infrastructure that supports it, and for most that includes intermodal rail, which is why the state of the nation’s railroads is so important.

Texas continues to be at the center of much inland port activity. In August, Union Pacific broke ground on a new $90 million intermodal hub in San Antonio, which is scheduled for completion later this year.

The 300-acre intermodal hub, situated on Interstate 35 between rail lines traveling to and from the West Coast and Mexico, will ship and receive containers and trailers with household goods and other items for retailers and distribution centers, as well as auto parts for the new Toyota plant in San Antonio.

According to Union Pacific, the San Antonio Intermodal Terminal will begin processing over 100,000 trailers with future growth potential of 250,000 trailers and containers per year.

In Fort Worth, Hillwood Properties’ AllianceTexas (www.alliancetexas.com) development boasts one of the nation’s largest intermodal hubs, BNSF Railway’s Alliance Intermodal Facility. The facility handles 600,000 lifts annually and is projected to grow to 1 million lifts by 2011. It also features direct Asian import/export from the West Coast and 13 double-stacked intermodal trains daily.

Last month, BNSF announced that it would expand its intermodal hub in AllianceTexas while it considers whether to build a similar facility at the future Dallas Logistics Hub (www.dallaslogisticshub.com), being developed by The Allen Group.

During 2007, the Fort Worth-based railroad added nearly 9 miles of track and 4 new tracking lanes to meet current and future demand for business and to speed up train traffic through AllianceTexas. Furthermore, a Hillwood Properties spokesman said the expansion would help attract more distribution centers, such as those currently operated by J.C. Penney and Michaels Stores.

Union Pacific shares top billing with BNSF at both of these Texas intermodal hubs. In addition to its presence at AllianceTexas, UP’s Southern Dallas Intermodal Terminal is located adjacent to the Dallas Logistics Hub. The development is the largest new logistics park in North America with 6,000 acres master-planned for up to 60 million square feet of vertical space for distribution, manufacturing, office and retail use.

Recently, BNSF extended an option to buy more than 300 acres at the Dallas Logistics Hub. Negotiations with The Allen Group are in the works and an announcement is expected in three to four months.

In Kansas City, BNSF and The Allen Group are working together to develop Logistics Park-Kansas City, slated to open in 2009. The future intermodal hub is located near Gardner, which is 25 miles southwest of Kansas City. The hub is adjacent to Interstate 35 and BNSF’s transcontinental main line. Over the 20 year build-out, the hub is projected to help create 7.1 million square feet of vertical development and 13,000 jobs in the state of Kansas.

Kansas City is within a 300-mile drive of major consumer and production centers in the nation’s mid-section, giving it an edge over hubs in Chicago and Dallas, says an executive with BNSF. The trucking portion of the supply chain has become even more of a factor as the cost of fuel has continued to rise.

For Kansas City Southern (www.kcsouthern.com), north-south trade (NAFTA), especially from the railroad’s Lazaro Cardenas, Mexico rail hub to Kansas City is where the action’s at, and there’s no sign of slowing down. Not only is NAFTA trade breaking records, but the trend towards near-shoring means there will be plenty of business to bank on for the near- to medium-term.

CenterPoint Properties (www.centerpoint-prop.com) and Kansas City Southern formed a partnership last year to develop a 1,300-acre intermodal logistics hub in south Kansas City, Missouri.

The CenterPoint-KCS Intermodal Center will have up to 3.5 million square feet of warehouse and distribution facilities.

“Whether the freight comes in from Los Angeles-Long Beach, the Pacific Northwest, the Gulf ports, or from Mexico, there are very strong rail connections to Kansas City,” explained Chris Gutierrez, President, Kansas City SmartPort (www.kcsmartport.com), in a recent World Trade interview.

CenterPoint Properties also has its eyes on expanding in Will County (part of the Chicago metropolitan area). Currently, the 2,200-acre CenterPoint Intermodal Center in Elwood, Illinois, which is home to the BNSF Logistics Park-Chicago, is operating at about half of its potential. Nonetheless, the developer, which controls 3,858 acres of land south of Joliet, wants to use it for a new intermodal hub-CenterPoint Intermodal North.

The other proposed site is located in Crete, a small town (6.4 square miles) with a population of roughly 7300 people, which is located 40 miles of downtown Chicago.

Michael Mullen, CEO of CenterPoint Properties, told the Joliet Herald News that Will County is “at the crossroads of trade.” He added that his company would be investing $3.5 billion in the county if the two new intermodal hubs are approved: $1 billion in Elwood, $1.5 billion in Crete, and $2 billion south of Joliet.

The Port of Memphis is beginning to feel the benefits of the recently launched Canadian National Railway (www.cn.ca) service from British Columbia’s Port of Prince Rupert. In October, COSCO began Asia to Canada service via Prince Rupert. CN now runs daily train service from the port to Memphis on 117-hour schedules. 

In the meantime, BNSF is in the midst of a $200 million expansion to its intermodal yard at Shelby Drive and Lamar. When completed in 2009, it would more than double the number of containers that can be transported from rail to truck in Memphis.

Fort Wayne, Indiana is hoping it might be next in line for an intermodal hub. In August, the Fort Wayne-Allen County Economic Development Alliance announced that it was negotiating with Transpoint LLC to develop a 300-acre intermodal hub and logistics park in Fort Wayne. Although Transpoint had hoped to acquire the land by now, it appears the land will be purchased in the near future, and if so, the hub could be operational by mid-2008.

Indeed, a number of other cities in the nation’s interior are emerging as noteworthy inland ports, and not all are reliant on railroads.

The Port of Huntsville (www.hsvairport.org) is one example. Although Huntsville, the largest city in northern Alabama, already had a well developed aerospace and technology-driven economy, the growing inland port is doing its part to add to the city (and state’s) economic growth.

The inland port is comprised of Huntsville International Airport, the International Intermodal Center, and the Jetplex Industrial Park. The airport maintains two parallel runways, one 10,000 feet and one 12,600 feet-the second-longest runway in the Southeast behind Miami. There’s also 1 million square feet of cargo ramp space.

Swiss freight forwarder Panalpina operates 10 weekly 747 freighters from Luxembourg to Huntsville, while a number of leading third-party logistics companies can be found there too, including BAX, Expeditors, Page & Jones, EGL, UPS, C.H. Robinson, K+N, and Landstar.

In October, officials from Huntsville traveled to China to visit seven air carriers in an attempt to woo them to Huntsville.

Meanwhile, construction is set to begin soon on a new 78,000 square foot air cargo building at the International Intermodal Center, with completion set for January 2009.

Likewise, the Alabama State Port Authority (www.asdd.com) reported record cargo volumes in 2007, driven primarily by a 50 percent increase in containerized shipments and record coal shipments.

The Port of Mobile is embarking on three major infrastructure projects to handle increasing trade flows, including a new container terminal that’s expected to open in the fourth quarter of 2008. The 135-acre development is a joint effort between APM Terminals and CMA CGM. Initially, the container terminal will have a capacity of 350,000 TEUs, but will eventually expand to 800,000 TEUs during the second phase of construction. Maersk Line and CMA CGM will be served by the new container terminal, however port officials are hopeful more business will come online before long.wt