May 2011 | Sponsored | Economic Development

U.S. Intermodal Gets a Lift: America’s Great Rail Sites & Services

Tags: Site Selection, Intermodal, Rail

Intermodal connections help shippers move product quickly and efficiently. Get on track with some locations, utilities, and service providers that are helping intermodal grow.

Forget the old axiom that the quickest way from Point A to Point B is a straight line. It’s not necessarily true, as anyone who has dealt with moving product across great distances knows.

The crow may fly a direct route from here to there, but the crow isn’t climbing mountains or sailing seas. And it certainly isn’t carrying a few tons of precious cargo on its back.

Fortunately, logistics professionals have figured out just how to traverse the miles in the safest, most efficient manner possible— even when it involves multiple transportation modes crossing vast stretches of land and water.

The nation’s Class I railways and numerous regional rail lines connect with major highways and ports through a network of outstanding rail intermodal sites. Here are some of the best locations, service providers, utilities, and facilities making it all come together for product on the move.

An Intermodal Game-Changer: Wayne County Economic Development Authority

Everything is on track for what promises to be a “game-changing” intermodal terminal in the Wayne County city of Prichard, W.Va., according to Don Perdue, executive director of the Wayne County Economic Development Authority.

“This project is the nexus of opportunity for the entire mid-Atlantic region,” Perdue says.

The planned Prichard facility is a key component of what Norfolk Southern has dubbed the Heartland Corridor— a portfolio of intermodal-based projects designed to significantly improve mobility and increase freight capacity between the mid-Atlantic regions of Virginia and North Carolina, and the Midwest and West Virginia.

The Heartland Corridor is a public-private partnership among Norfolk Southern; the states of West Virginia, Virginia, and Ohio; and the federal government to create the shortest, fastest route for double-stacked container trains moving between the Port of Virginia and the Midwest. The new routing improves transit time between Norfolk and Chicago from four days to three, and is nearly 250 miles shorter than previous circuitous trips.

The Prichard project, championed by West Virginia Governor Earl Ray Tomblin and other state leaders, has the vigorous support of U.S. Rep. Nick Rahall of West Virginia, top Democrat on the House Transportation and Infrastructure Committee.

“I am happy to report we are making progress with the Prichard intermodal facility,” Rahall wrote in a recent letter to constituents. “In fact, it is fair to say the facility’s development is picking up steam.”

The Prichard facility will have access to Huntington’s Tri-State Airport, as well as to a larger rail tunnel, enabling it to become a commercial transportation and product transition hub for the region.

Rep. Rahall reports that his $4-million federal highway earmark will be put to work to facilitate access to the Prichard site via Tolsia Highway, the portion of US Highway 52 in southern West Virginia that runs between Kenova in Wayne County and Kermit in Mingo County. Excavation from the highway project will be used for the construction associated with the terminal.

“When Norfolk Southern came to Congress asking for a down payment on what I and others saw for the heartland of America— including Prichard— Congress responded with tens of millions of dollars in support,” Rep. Rahall wrote. “The private contributions of this corporate community citizen are essential.”

Research for the Prichard project has been conducted by the Rahall Appalachian Transportation Institute, a National University Transportation Center funded by the U.S. Department of Transportation’s Research and Innovative Technology Administration, based at Huntington’s Marshall University.

“Make no mistake, there is a strong partnership moving the project along,” wrote Rep. Rahall.

“We believe this will be the primary economic driver for Wayne County for many years to come,” says Perdue, who is a West Virginia legislator in addition to his role with the Wayne County Economic Development Authority. “We often refer to Wayne County as the ‘Western Gate to the Mountain State.’ Soon that ‘gate’ will be open to the entire globe in a very profound way.”

Riding a New Wave of Container Traffic: Nexus

In the five years since third-party logistics (3PL) provider Nexus opened its unique Chicago Land Bridge, nearly 1,000 import containers have shipped from overseas direct to the Chicago marketplace.

The Land Bridge, a nearly $1-million project, is a half-mile-long private roadway that links a metro-Chicago CSX intermodal facility with two Nexus warehouse facilities in Bedford Park, Ill. The Nexus facilities with access to the Land Bridge provide a total of 57 truck docks, 26 rail doors, and 400,000 square feet of space.

“As the Land Bridge continues to capture the attention of international shippers, we are preparing for a new wave of container traffic, particularly in light of rising fuel costs and the growth that the intermodal industry will experience related to the Panama Canal,” says William Hansen, a principal of Nexus.

With the Chicago Land Bridge, heavy containers can travel from U.S. East Coast ports directly to the nation’s epicenter without ever touching public roadways. The Land Bridge can also be leveraged in reverse to support movements out of the Midwest for export via East Coast ports.

“The Land Bridge allows shippers to avoid de-consolidation at the port of entry, and to build heavier shipments that take advantage of maximum container capacity,” Hansen explains. “The result can be as much as a 20- to 30-percent cost savings.

“Also, the proximity of the CSX intermodal yard to our distribution center potentially allows customers to realize a reduction in transit time and drayage-related expenses,” adds Hansen. “The solution basically allows our Bedford Park campus to serve as an inland port.”

As with many new endeavors, the flow of containers in the pipeline started gradually following the project’s launch in March 2006. As a result, Hansen says, the steady growth has been met with flawless execution.

Hansen calls the Land Bridge a truly unique value-add. “Many companies offer transportation, warehousing, and other traditional third-party logistics services,” he says. “But the Land Bridge concept goes above and beyond.”

All Nexus warehouse facilities are served by major railroads and are equipped with a large volume of rail and truck dock doors to accommodate inbound product deliveries. Nexus can receive product arriving in railcars, intermodal containers, and domestic trailers, and ship product via almost any transportation mode required.

Storage, crossdocking, and value-added packaging services are also available in conjunction with transload services. In addition to the management of product at its warehouse facilities, the Nexus team can coordinate and provide transportation services utilizing the required modes.

“At Nexus,” says Hansen, “we’re focused on solutions that are contemporary with the challenges faced by the logistics sector. Our Land Bridge directly addresses real concerns related to shifts in global and domestic supply chains, and leverages intermodal transportation as a dynamic resource in responding to those challenges.”

Powering Up Service Assets: Ameren Corporation

“Illinois and Missouri represent a transportation gateway,” claims Michael Kearney, economic development manager for Ameren, a utility company that provides energy to electric and gas customers in central and southern Illinois, central and eastern Missouri, and the St. Louis metropolitan area.

It is no idle boast. The region offers connections to multiple rail lines serving Atlantic, Pacific, and Gulf Coast ports in the United States, Canada, and Mexico. To serve these railways, a total of 17 intermodal terminals operate in and within driving distance of Ameren’s service territory. As much as 80 percent of the materials passing through the region’s DCs travel by dual modes.

In addition to rail intermodal facilities, the area offers access to five interstates, all seven Class I rail lines, and two major airports. From the well-connected region, trucks can reach more than 78 million people within eight hours, making the area attractive to businesses siting new distribution centers and manufacturing facilities.

It takes a tremendous amount of energy to run all those intermodal terminals, distribution centers, and businesses. That’s where Ameren comes in. The company’s operating subsidiaries provide energy services to 2.4 million electric and 900,000 natural gas customers across 64,000 square miles.

Ameren’s team of economic development specialists provides comprehensive services to companies seeking business location options in the area.

“As a utility, Ameren’s infrastructure connects our communities,” Kearney says. “Our development professionals throughout the region work with local partners to explore building and site options confidentially and without obligation.”

Among the region’s selling points is its diverse industrial base, inherent in the breadth of its geography. Ameren recently commissioned two consulting firms to study its service territory assets. One of the primary advantages the study identified is the region’s unsurpassed transportation infrastructure, particularly its well-distributed network of rail intermodal terminals, highways, and commercial and cargo airports.

The study also found that selected business costs in the region are at least 18 percent below typical or national average distribution center costs. Those costs are up to 27 percent below average in some parts of the region, and up to 32 percent below certain competing locations in the Midwest, such as parts of the Chicago metro area.

“We know that energy will not be the only driving force in site decisions,” says Kearney. But he is confident that, when all factors are considered, the Illinois-Missouri region Ameren serves emerges at the top of any company’s “must consider” site selection list.

Putting Intermodal in the Spotlight: NFI

As fuel prices continue to rise, one logistics company is finding success by focusing on intermodal services.

NFI, one of the largest privately held 3PLs in North America, offers an array of supply chain services to help businesses manage, grow, and succeed in today’s marketplace.

“We’ve been in the trucking business for 79 years, and we’ve established a widespread network operation across the United States,” says Ike Brown, president of NFI RoadRail, NFI’s Intermodal Division.

NFI enjoys powerful synergies among its trucking and warehousing operations in Los Angeles, Dallas, Chicago, Orlando, New Jersey, and eastern Pennsylvania, according to Brown.

“We’ve gone through a metamorphosis,” he says. “We operate on a non-asset model, but we have assets to back us up.”

NFI RoadRail experienced exponential growth between 2008 and 2009, before changes in regulatory environments in 2010 affected pricing. Now Brown expects growth to pick up again in 2011, with billions of dollars being spent federally and at the state level to improve networks, add more rail depots, and generally make rail transport a more competitive option than over-the-road.

Another intermodal innovation NFI is pioneering is the refrigerated container. “We explored what else we could do in the intermodal arena that would separate us from the rest of the pack,” Brown says. “We were among the first in the market with a 53-foot refrigerated intermodal container.”

The container is designed to be capable of two-high loaded double stacking for railcar service, and three-high loaded for terminal operation with 40-foot ISO type containers, as well as other domestic containers. NFI’s containers have been proven to successfully handle shipments of highly perishable product using the most efficient, environmentally friendly method of transportation today: the railroad.

“NFI runs about 70 of these units now, and increases its volume weekly,” Brown says.

This increased emphasis on intermodal and sustainable initiatives fits well into NFI’s core values. “Our corporate values include customer service, performance, and social responsibility,” says Brown. “The economic benefits of refrigerated rail containers are complemented by how they contribute to sustainability. By reducing the number of trucks on the road, intermodal transportation helps reduce the company’s carbon footprint.”

Refrigerated rail containers allow for efficient and expedited delivery of large volumes of perishables such as frozen or refrigerated products, including ice cream; infant formula; pasta; and baked goods. They also offer sensible alternative transportation to over-the-road.

“NFI’s business is increasing every month because it hit a nerve in the transportation industry: the need to increase capacity of shipments while reducing the number of trucks on the road,” says Brown.

NFI is a conglomerate of transportation-related companies committed to serving the logistics and supply chain sector by offering dedicated truckload services, logistics, and warehousing across the United States and Canada.

The company started in 1932 as National Hauling in Vineland, N.J., with one dump truck, and has grown to become a leader in third-party logistics. One of New Jersey’s largest private employers, NFI generates $900 million in gross annual revenue, employs more than 5,500 individuals, and maintains more than 2,000 tractors and 7,200 trailers.

Energizing the Heart of America: Nebraska Public Power District

Nebraska’s central location makes it an ideal transportation hub. Interstate 80, arguably the nation’s busiest intercontinental highway, stretches 482 miles east-west from one end of the state to the other. Seven north-south highways bisect Nebraska, providing companies with ready access to the NAFTA trade corridor. The state also is served by two Class I rail systems.

“Nebraska’s relationship with major Class I railroads is a key strategic advantage for companies that locate in the state,” says Ken Lemke, economist, Nebraska Public Power District (NPPD). “Union Pacific, headquartered in Omaha, and BNSF Railway are two key railroads that enable strategic supply chain delivery by way of direct mid-continent routes. Because of these main rail centers, no major city in the United States is more than five days away by rail.

“While this geographically centered location is a natural asset that businesses in Nebraska can take advantage of, the state offers other strategic advantages to prospective businesses,” Lemke adds. “At the core of any successful business is reliable energy, and Nebraska is the only state in the nation where all electric utilities are publicly owned to ensure affordable, quality electricity.”

NPPD’s Economic Development Team provides a variety of services to assist Nebraska and its communities in their efforts to attract, retain, and expand businesses. These services are available to NPPD customers and utility partners, as well as to companies considering locating a site in Nebraska.

“The Economic Development Team has helped hundreds of companies find productive and profitable locations in Nebraska,” says Lemke. “Services range from supplying requested information to guiding firms through the entire site-selection process. This may include gathering community proposals, identifying informational and financial resources, or facilitating final negotiations at the local level.”

Logistics is a key factor in site-selection decisions. In that regard, Nebraska’s rail intermodal assets make the state particularly attractive. “A total of 10 freight railroads operate more than 3,200 miles of track throughout the state,” Lemke notes.

Nebraska also is home to several of the nation’s leading truck transportation companies, including Adams Trucking, Crete Carrier Corporation, and Werner Enterprises. In total, some 13,500 trucking companies call Nebraska home.

“Through Nebraska’s roadways, goods delivered by truck reach more than 25 percent of the U.S. population in just one day,” Lemke says. “Within two days, that percentage skyrockets to more than 90 percent. Thus, from a resource perspective, we are well-positioned to take advantage of rail intermodal operations.”

In addition, Lemke cites Nebraska’s strong workforce as an important ingredient in its success. “Nebraskans take great pride in the quality of their work,” he says. “This contributes to high productivity and success rates, and low absenteeism and turnover rates.”

Nebraska traditionally maintains low unemployment. The March 2011 rate was 4.2 percent, less than half the nationwide rate.

Central Arteries: Joplin Regional Partnership

The Joplin region comprises 10 communities and five counties in southwest Missouri and southeast Kansas. The region’s economic development efforts are promoted through the Joplin Regional Partnership, which provides site-selection assistance, incentive and business tax information, key business and local government contacts, and demographic and economic data.

“This unique partnership gives site selectors access to information about multiple locations throughout our area that meet their specifications, reducing the number of inquiries they have to make,” says Rob O’Brian, president, Joplin Area Chamber of Commerce. “It also expedites the selection process for companies looking to move, expand, or begin operations.”

The city of Joplin is the hub of the region’s market area, which contains nearly 250,000 people. The overall market reach within 60 miles of Joplin is more than 700,000 people.

“The Joplin region is located near the U.S. population center and situated nearly equidistant between Los Angeles and New York, as well as the Mexican and Canadian borders,” says O’Brian.

“Our region’s central location is well-served by highway transportation routes,” he adds.

An excellent highway system that includes Interstate 44 running east-west, interstate-grade US Highway 71, and US Highway 69 running north-south creates connections to every region in the country, as well as to Mexico and Canada.

Three Class I railroads and two regional shortline railroads also are important components of the transportation system. These rail lines provide direct access to major ports on the Gulf of Mexico and the Pacific Ocean.

In addition, the Joplin Regional Airport and three other airports within a 60- to 90-minute drive provide commercial and cargo air service to markets throughout the world.

The proximity of southwest Missouri and southeast Kansas’ central U.S. location makes the region an ideal site for office space and warehousing/distribution facilities. The region is home to companies such as General Mills, Leggett & Platt, Owens Corning, Atec Steel Fabrication, Butterball, Schreiber Foods, and Thorco Industries.

Moving Customers to Global Markets: Ford Storage & Moving Company

After working for his brother Grover in the storage and transfer business, Ray Atlee Ford decided to strike out on his own. He became an entrepreneur, incorporating Ford Transfer Company in 1915. The business, which originated in Council Bluffs, Iowa, initially provided storage and hauling of flour, rice, grain, and other bulk products to local grocers.

In 1919, another brother, Roy Virgil Ford, returned from World War I and joined what today has evolved into Ford Storage & Moving. With Ray operating the warehousing side and Roy running the moving and storage company, Ford Bros. Van & Storage was formed.

Ford Bros. soon became a charter agent for Allied Van Lines, connecting to a network of movers working as a national carrier. Meanwhile, growth in the warehousing and distribution markets fueled Ford Bros.’ own growth.

With this strong lineage, Ford Storage & Moving cites nearly one century of leadership in the logistics and transportation sector. An asset-based warehouse provider, Ford Storage is strategically located in the Midwest, providing logistics services from six distribution centers in Nebraska and Kansas.

With more than 750,000 square feet between Omaha and Kansas City, the diverse company now offers warehousing, transportation, logistics, consolidation, home delivery, and relocation services. The company, which traces its presence in Omaha to 1932, expanded to Kansas City in an effort to provide customers access to a global marketplace.

“The Kansas City facility is a logistics hub supporting international trade,” says Chad E. Ford, vice president for business development.

Ford Storage has authority with the Uniform Intermodal Interchange and Facilities Access Agreement for all Class I railways in the Kansas City marketplace. “The Kansas City terminal is less than one mile from BNSF’s intermodal facility, and centrally located among the Kansas City railways,” Ford says. “We service import and export shipments with a focus on customers’ specific supply chain requirements.”

With 3PL warehouse locations in Omaha and La Vista, Neb., as well as Kansas City, Ford Storage is a resource for shippers requiring any combination of transport modes servicing B2B and B2C companies. Ford Storage customers include manufacturers, distributors, and wholesale and retail-based industries.

Chad Ford attributes the company’s success to its adaptability, as well as its strategic locations. “Our systems are built around our customers’ business processes,” he says. “They make the business rules and we create a method to service and manage their inventory. The satisfaction and requirements of our customers’ own customers become our focus, goal, and standard operating procedure.

“Companies that want to consolidate vendors for a cost-effective and efficient supply chain should view Ford Storage’s asset-based solutions,” he suggests.