Placing the Pieces for the Heartland Corridor

Tasks of tunnel topping and floor dropping are now taking place along the Norfolk Southern rail line through Virginia, West Virginia, Kentucky and Ohio to provide double-stack train height capacity along this Heartland Corridor route. All told, 28 tunnels will be reconfigured to handle the containerized intermodal traffic.

When completed in early 2010, freight moving between Virginia and Columbus, OH will move 200 fewer miles in a full day less. Single stack traffic currently moves along the route and will continue to do so throughout the construction process. Each entity involved in the project is taking significant steps to improve infrastructure specifically for the Heartland Corridor as well as undertaking other measures to improve capacity and service to shippers.

As Robin Chapman, spokesman for the railroad notes, “We at Norfolk Southern point to the Heartland Corridor as a flagship example of what can be done with public-private partnerships in improving our nation’s infrastructure. Public entities recognize benefits of this project in economic development for areas these stack trains will go through as well as diversion of trucks from highway to rail.” The Federal Highway Administration (FHWA) is administering the project and providing significant financial assistance.

Norfolk Southern is involved in another major project it calls the Crescent Corridor. Chapman explains that the work involves several rail lines stretching from New Orleans into New York/New Jersey. “Over the next few years we’ll be undertaking infrastructure improvements along that corridor,” he says. “Capacity improvements will include double-tracking, putting in more passing sidings, improving and building some new intermodal terminals.”

The Virginia Port Authority (VPA) is a major component of the Heartland Corridor. Generally, cargo arriving and leaving from VPA’s Port of Hampton Roads/ Norfolk will use the double-stack service. “Once the Heartland Corridor is completed we’ll be the only port with the direct overnight link to the Rickenbacker Intermodal Center yard in Columbus, OH,” claims Joe Harris VPA media relations manager. Hampton Roads boasts the deepest channel along the East Cost with inbound and outbound lanes dredged to 50 feet. Some 50 million tons of bulk cargo moves through Hampton Roads each year. The port is a world leader in export of coal and moves significant volumes of grain and petroleum as well.

Other infrastructure improvements are underway by VPA. Harris notes that, “We are in the last stages of renovation of our largest terminal, Norfolk International Terminal (NIT). We’ll be 100% straddle carriers there. The port is at a 50-foot depth now, and we have federal authorization to go to 55-feet.”

Further north, work is almost complete on the Rickenbacker Intermodal Terminal for the Columbus Regional Airport Authority in Columbus, OH. Norfolk Southern has been employing an intermodal facility in Columbus at Discovery Park. Since its creation the Park has enjoyed an annual average boost in traffic of 14%. There is no more room to grow business there.

While the primary use of the intermodal facility will be for train and truck traffic, because of its proximity to the Columbus Airport there is potential for receiving and shipping by air. David Whitaker, vice president of Business Communications & Development for the Authority points out that it is investing significantly in the Airport’s commercial development area. “We are building a new air cargo terminal,” he explains, “expected to be available for occupancy next summer. That represents heavy investment in commercial air cargo activity inside the fence at the airport.”

Rickenbacker is the national trucking hub for Forward Air, a provider of timedefinite surface transportation and related logistics services to the deferred air freight market. The carrier recently invested in their Columbus facility, adding a significant number of new dock positions.

At the same time the Authority is working outside its fence on industrial development that will aid business as well. “We have partnered with Duke Realty Corp. and Capitol Square to build Rickenbacker Global Logistics Park on 1,200 acres of prime land,” continues Whitaker. It is expected to eventually include as much as 20 million square feet of industrial development. The master-planned, speculative and built-to-suit industrial park will be divided into campuses. It’s to be developed over 15 years and will accommodate up to 30 buildings.

From Columbus, Norfolk Southern will be able to double-stack freight to Chicago for further distribution. A problem in Chicago for all freight movement has been congestion. While there is little doubt that Chicago is the center for rail traffic in North America, there are problems in the area for moving freight from one of the Class I railroads to another.

For one thing, observes Neil Doyle, executive vice president of Infrastructure and Transportation Development for CenterPoint Properties, it’s not possible to build just one facility to serve all of the railroads. None of the older manifest yards in the City of Chicago are large enough to handle the traffic and they are not located correctly to get the job done. “We came with a plan to integrate these facilities into logistics parks and build it as one massive Master Plan development,” he explains. CenterPoint has proceeded to build away from the congested Metro area of Chicago. “We’ve put together three integrated intermodal logistics centers on the Chicago periphery,” notes Doyle. “Our flagship is the

CenterPoint Intermodal Center in Elwood, which is anchored by the BNSF. Out west, in Rochelle, we have the UP Global III facility. Last year we acquired 1,000 acres of land south of Chicago in Crete. We’ve established a CenterPoint Intermodal Center at Crete which has trackage available from CSX.”

Each of the three is a different model than the others. At Elwood CenterPoint developed the rail facility for BNSF and leased it back to them, then developed an industrial park surrounding it. At Rochelle the UP wanted to own its own global facility. CenterPoint built it and sold it to the UP. It then developed an industrial park surrounding it. At Crete CenterPoint bought 1,000 acres of land and zoned it for an intermodal facility. At this point it is a purely speculative venture since a railroad hasn’t committed to the property although there is CSX rail available.

Testimony that intermodal connections in the Chicago area are important and working is provided by what has happened at Elwood. “It has been more successful at a quicker pace than we anticipated,” claims Doyle. “We have over 7 million square feet of warehouse space constructed in five years. We have another 2-1/2 million under construction. “The container is the new currency in today’s global paradigm. We had 3 million bushels of grain and general agricultural products exported from Elwood in 2006. Prior to that the number was zero.”

In fact, there is an inland port problem these days, according to Doyle. “We can’t get our hands on empty containers today. There are no empties in Chicago because all of the equipment is being utilized.”

Kill the Tax, Boost Short Seas

An alternative method of moving freight in from coastal ports is by water in what’s called Short Sea Shipping (SSS). Commercial freight is moved from one US port to another either along inland or coastal water. Though still in its infancy, SSS is having a degree of success along the East, West and Coastal ports. According to the American Association of Port Authorities (AAPA) and others, there is an impediment to growth of SSS: the Harbor Maintenance Tax.

As Dave Sanford, AAPA’s director of Navigation Policy and Legislation, explains, “the law specifies that the importer pay the tax on foreign shipments. It also specifies that the shipper pay the tax for domestic moves. That box gets taxed twice. We’d like to get rid of that impediment for the continued use of water.”

According to AAPA, the tax was created to make sure fees were comprehensively collected on all movements that use harbor channels. The assumption was that an importer and domestic shipper are separate entities. That’s not necessarily true. As Sanford notes, “shippers are paying tax penalties to move freight by water they wouldn’t pay if the shipment was moving by truck or rail.”

The Harbor Maintenance Tax is also viewed on the Great Lakes as a significant inhibitor to container trade between Canada and the US. Getting rid of the tax, according to AAPA, would promote direct Great Lakes traffic between the countries. It has the potential to significantly free up space on bridges between Canada and the US, in Sanford’s view. “If we could get those boxes moving on water it would help reduce truck traffic. There are any number of desirable distribution points on the US side of the Great Lakes— Cleveland, Toledo, Green Bay, Duluth-Superior and more.”

Presently working its way through Congress is HR 1499 that seeks to take the tax off both Great Lakes and other domestic ports. Moving from the House, it’s anticipated that a similar bill will soon be advanced in the Senate.

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