|9/28/2011Intermodal rail comes of age in Northwest OhioThe opening of CXS’s intermodal terminal in Northwest Ohio clears the way for rail shipments from East Coast ports to the Midwest.
By Karen E. Thuermer, AJOT
Blow your train whistles! CSX’s Northwest Ohio Intermodal Terminal is running full steam ahead. Shippers can now take advantage of yet another intermodal rail terminal that offers efficiencies and speed to markets in the Midwest and beyond.
In June, CSX Transportation celebrated the grand opening of its Northwest Ohio Intermodal Terminal, located in North Baltimore, Ohio between Findlay and Toledo.
It’s one of several terminals in CSX’s public-private partnership National Gateway project with the federal government that will ultimately clear 61 obstructions, thereby allowing CSX to run double-stack rail, and build and expand six intermodal facilities within CSX’s network.
That network expands North Carolina, Virginia, Maryland, West Virginia, Pennsylvania, Ohio and Washington, D.C.
“We run about 26 trains daily in and out of the terminal and do about 1,500 lifts a day,” Drew Glassman, CSX assistant vice president of Intermodal marketing, revealed to this AJOT reporter in a telephone interview upon his return from the new terminal that same day.
He expects those amounts to be more once the entire National Gateway system is fully up and running, and CSX moves from a point-to-point network to one that operates like a hub and spoke.
“This will allow to us to add hundreds of connection points across our network,” Glassman explained. “Before, where we may not have been able to run full trains from a point like Columbus and different points across the network, we are now able to have a whole train load from Northwest Ohio go to points in the Ohio Valley and beyond.”
Glassman described the network as akin to what air carriers like FedEx or Delta have been doing with their systems for years.
“If you fly into Delta’s Atlanta hub, for example, you can go anywhere,” he said. FedEx’s use of Memphis is another example.
CSX offers a similar concept in which, through its northern tier, shippers can utilize hubs at its Chambersburg, PA; Syracuse, NY, and Northwest Ohio terminals and spring smaller trainloads to other markets.
“What this means to CSX customers is an improvement to connectivity and efficiency,” he said. “Once you get into Northwest Ohio you can get access to our entire network. We can build high density trains that can be sent out West as far as California, and do the reverse when shipments come East.”
When the railroad has enough density of cargo for a particular route, it can still run a full train point-to-point.
What the National Gateway initiative offers the CSX network is the ability to add double stack capacity from mid Atlantic ports into the Ohio valley via Northwest Ohio.
Seaport and By Pass Connections The Port of Baltimore is part of the National Gateway initiative, where a new CSX intermodal terminal is also scheduled to be built between Baltimore and Washington, D.C. to offer better connectivity to its domestic system.
Whereas today, CSX serves nine different markets from its network from the Port of Baltimore (in addition to connecting to the western railroads), when the National Gateway is fully implemented and all services are phased in, CSX will be able to service nine additional markets and 80 million additional consumers that are not rail served out of the Port of Baltimore today.
Those markets, and phase in periods are: Cincinnati, Louisville, Indianapolis, and Buffalo, 2012; Atlanta, Charlotte, Memphis, and Pittsburgh, 2014.
While CSX has a large presence with the Ports of Savannah and Charleston, these Ports do not connect as well through the National Gateway.
“They tend to be more Atlantic-centric in the South,” Glassman said.
But Glassman stresses how important the Port of New York and New Jersey is to its network since it operates as CSX’s biggest import-export port out of the East Coast. This is significant since transcontinental shippers benefit most from CSX’s connectivity thanks to the National Gateway and Northwest Ohio terminal. “One of the advantages to Northwest Ohio is that it allows us to bypass Chicago, which is very congested and has a lot of complexities related to interchanging freight,” Glassman added.
CSX is also able to partner with Union Pacific (UP) and Burlington Northern Santa Fe (BNSF) railroads and bypass Chicago and go straight into Northwest Ohio.
“Shippers are able to get this kind of connectivity into smaller markets, but also are now able to get a high density and connectivity by shipping back to Northwest Ohio where the train is ‘re-densified’ and the containers are put on their way East or West,” Glassman remarked. “We also serve the function of offering local service out of Northwest Ohio.”
Ample Containers Whereas when the economy was flying, containers came in short supply, today’s slower economy has put less pressure on the need for ample containers. But given the fact the railroad is ramping up business, and more and more customers are using rail to save cost and take advantage of its new efficiencies, CSX is investing in a new domestic interline container program called UMAX.
UMAX, which is in partnership with UP, was launched in March 2010 to expand market access and capacity across a nationwide intermodal network.
“We have been adding significantly to that fleet over the last year, and have added almost 4,000 containers this year alone,” Glassman revealed. “We are up to about 30,000 containers.”
Private customers such as JB Hunt and Schneider have also been adding into their fleet, as have international steamship lines.
Although Glassman acknowledges the down economy and diminished import trade, he points out that CSX’s domestic business continues to grow even through this year.
“I think this is because people are making economic choices and use a greener alternative to trucking,” he said. “We have most definitely benefited from the tighter times.”
Reliable, Robust Helping the system further, Glassman stressed how the intermodal terminal in Northwest Ohio is not only improving CSX’s transit times; it is improving its reliability.
“Our connections are much better because we now have multiple departures to destinations,” he said. “So if freight gets behind, it has a better chance of catching up.”
Reliability has always been an issue within the railway system, and a reason shippers hesitated to use rail in the past. But since CSX’s Northwest Ohio terminal is, for the most part, a one connection point across the northern tier of the CSX network, there’s fewer opportunities for freight delays.
“Normally freight has to make two or three connections, which allows more opportunity for things to go wrong,” Glassman related. “It’s the same in the airline industry.”
What will help even more will be when a density of freight builds up, and CSX will have the option of running freight point-to-point without stopping in Northwest Ohio.
Competitor Norfolk Southern (NS) is working to offer the same advantages with its Heartland Corridor, which Glassman described as “a great project and big investment in public private partnership between NS, several states, and the federal government.
“The goal there is to get more connectivity out of the Port of Virginia into Columbus, which is where it is primarily oriented,” he said.
It, too, increases NS’s capacity capabilities on that line, like National Gateway does for CSX. But from a capacity perspective, Glassman stressed that National Gateway also goes through Virginia and Baltimore.
“Where we feel we really have an advantage is with the Northwest Ohio terminal as an anchor to our pipeline into the Mid Atlantic,” Glassman stressed. “We think that distribution network is our competitive advantage. It’s not just having the clearances, but also that robust distribution network to go with it.”
The Northwest Ohio terminal is also expected to result in a boom in distribution warehouse development in North Baltimore, Ohio and the region. Already, the town of North Baltimore, which partnered in helping CSX locate its facility there, has zoned thousands of acres for commercial and industrial parks.
CSX terminals in other locations, such as Chambersburg, PA, had a similar affect. As a result of the Chambersburg terminal, scores of distribution sites grew up off of Interstate 81.
Panama Canal Impact Going forward, another boom for CSX and its National Gateway project will be the Panama Canal expansion, to be completed in 2014. Overall, CSX executives are convinced that the National Gateway project in Northwest Ohio will allow the railroad to compete effectively for the additional freight that will come into East Coast seaports.
While CSX executives are very vocal about how very excited they are to work with the steamship lines in moving their freight inland from the ports, Glassman emphasized how ports on the East Coast still have to make more investment in anticipation of larger ships coming through the widened Panama Canal in order to make it possible for the bigger ships to arrive.
He revealed, however, that CSX has already seen a shift over the last five years of freight coming into the East Coast versus the West Coast due to other factors.
“We are ready to serve both legs of that because we serve freight coming from the West as well as from the East,” he added.
Short Sea Implications The new Northwest Ohio terminal could also impact the possibility of developing short sea shipping on the Great Lakes.
For years, Europe has benefited from a system of short sea shipping networks. But the idea has never caught on at one of North America’s great water networks. The reason: the system of locks, the St. Lawrence Seaway, and the seasonality of the water system, i.e. cold winters that make it such that the waterway can only be open from mid March to late December.
But Paul Toth, president and CEO of the Toledo Lucas County Port Authority told this AJOT reporter that he believes there are economic and efficiency benefits to offering short sea on the Great Lakes. The Port of Toledo could, especially, benefit from the CSX Northwest Ohio terminal since it is not that far away.
“From a strategic standpoint, the Port has looked at how the North Baltimore facility could impact us,” he said. “In the last 18 months we have spent around $15 million in upgrading rail access, buying new cranes and equipment that could handle container movements.”
Those cranes are not the container variety, but instead mobile harbor crane that can be used for the port’s traditional break and break bulk materials.
“But they can also handle containers,” Toth said. “We have always strongly believed that once CSX was up and fully operational that it would create an opportunity for us to move containers by short sea — both inbound and outbound.”
While no container shipments have occurred yet on Lake Erie, Toth reveals his port has received ships from overseas.
“We’ve had a couple of ships from Spain this spring that brought in large wind turbine blades, cells and their hubs,” he revealed. “The challenge with the Great Lakes is the St. Lawrence Seaway and the locks limit the type of ships that you can bring in. But the whole theory is that a large containership could be brought to big container ports like Montreal or Halifax, then transfer those containers to smaller vessels capable of handling up to 1,000 containers that can come in and out of the Seaway.”
Not only would this be an efficient way of shipping, it would be far more “greener” than trucking the shipments those long distances.
“We can use our port to off load containers,” Toth continued. “On the inbound side, we can distribute directly out of the port by truck, or put them on rail, and send them to the CSX facility in North Baltimore where they can be broken down for further shipment.”
The Port of Toledo offers direct access to the North Baltimore terminal since CSX rail comes directly to the port.
Toth also sees the same advantages on the outbound.
“There could be a company in Toronto that needs a container coming from China. It could come into the West Coast by rail to North Baltimore, get transferred to our port and then put on a short sea ship and sent to Toronto,” he said.
Toth is convinced there is an opportunity because of the way CSX has developed the Northwest Ohio facility to take advantage of short sea shipping on the Great Lakes.
Although the St. Lawrence Seaway is shut down from the end of December to the middle of March, Toth emphasized how these two or so months fall smack in the middle of the slowest time for moving containers worldwide.
“So we still think a viable container service nine or 10 months a year can work well out of the Great Lakes,” he said.
Currently, the Port is working on a freight movement study with the State of Ohio to understand how products are moving literally by all modes and what opportunities there are to take advantage of that movement.
In the meantime, the Port of Toledo has purchased 182 acres of land, which would more than double the size of the port. While the port, which opened its general cargo facility in 1955, has up to now only been served by CSX, the new property will also offer access to NS rail.
“The property is also right next to our existing property,” Toth said. Just recently, the Port installed enough rail to accommodate a full unit train that can tie into NS. The Port is also investing about $20 million in the property so that by late 2012 it will be able to start handling shipments at that facility as well.
Just like CSX’s North Baltimore terminal, Toth points out how Toledo is geographically in a unique position because of its close proximity to Chicago, Columbus, Cleveland, and Indianapolis. Northwest Ohio is also in the middle of a very large population, and at the crossroads of I-75, which goes from Canada to Florida, and I-80-90, which runs from the East to the West Coast.
Three Class 1 railroads (CSX, NS, and CN), in particular, have access to the Port of Toledo.
“We enjoy a great partnership with our port operator,” Toth added. “We had a 15 percent increase in freight last year, and are experiencing the same this year. We are riding a high wave right now and making investments in our future.”