Inland Ports: An Efficient Alternative
Coastal seaports remain pivotal components of many supply chains. Yet, for U.S. manufacturers and distributors scouting new locations, nearby real estate options are pricey, scarce, and/or stuck in a web of congested roadways. One viable solution is inland ports—intermodal terminals directly connected to seaports by rail or road.
A strategy for many firms considering new manufacturing investment likely includes importing raw materials and parts and/or exporting finished products. As such, locations near the East Coast and West Coast are often top of mind going into the site selection process.
The challenge with these seaport locations is that land is scarce and/or expensive. In addition, heavy volume on the roadways can be inefficient for distribution.
Conversely, an inland or "dry" port operates as an inland distribution point from the sea to an inland destination. These ports typically include warehouse space for storage and consolidation of goods, as well as customs clearance services. This allows for a streamlined importing process where containers are offloaded at the port and sent inland via rail, which can be especially useful for products destined for inland customers.
A prime example is the operation in Greer, South Carolina, where a Norfolk Southern rail line connects to the Port of Charleston. Containers received at the port in Charleston in the morning are transferred directly to the rail line and received in Greer the next morning.
BMW is one of the largest utilizers of nearby Inland Port Greer. The inland port has allowed the company to expand production at its Spartanburg, South Carolina, plant—through next-day service to and from the Port of Charleston.
Inland ports can improve the movement of imports and exports, shifting time-consuming sorting and handling farther inland, away from congested seaports.
That is precisely the goal of the new DeWitt Inland Port, being constructed outside of Syracuse, which will connect upstate New York to the Port of New York and New Jersey via a CSX rail line. Moving this cargo via rail instead of truck will decrease the number of large trucks on interstate highways in the area.
Inland ports also offer cost benefits. Sending exports to the ports via rail should be significantly cheaper than via truck, say state officials with the DeWitt Inland Port project. They estimate the savings to be $500 per container. This cost will vary in each part of the country, depending on location and distance to the seaport.
Inland port options are not only available from East Coast ports, but the west as well. Examples include: Logistics Park Kansas City in Edgerton, Kansas, which connects to the Southern California ports via BNSF Railway and the Inland Port Arizona in Coolidge, Arizona, which connects to the Southern California ports via a Union Pacific rail line.
Although currently experiencing some opposition, Salt Lake City is also considering a new inland port as part of a 1,600-acre development just outside of the city, an effort that would also connect with the Southern California ports.
A Viable option
For companies considering new manufacturing and/or distribution operations in the United States, inland ports can prove beneficial. Inland ports can open new location options, which help meet other operating needs (e.g., access to desired labor pool, lower cost area, and/or more effective distribution channels).
These ports also help connect the inland United States with more global markets, boosting local, state, and regional economies.