(The following story by Eric Smith appeared on The Daily News website on April 18.)
MEMPHIS, Tenn. — BNSF Railway Co. has taken another step toward expanding its local footprint.
Last week the company filed a $2.1 million building permit to convert a vacant building into office space and locker rooms for employees, according to The Daily News Online, www.memphisdailynews.com
The Fort Worth, Texas-based railroad in April 2006 bought the 16,000-square-foot strip mall and 3.21-acre piece of land at 5116 E. Shelby Drive, which is adjacent to its intermodal facility at Shelby Drive and Lamar Avenue, referred to as the “Tennessee Yard.”
The renovation will begin any day and is scheduled to wrap up by December.
“Once the (renovation) bids are reviewed and accepted, it will start right away,” said Joe Faust, the company’s regional director of public affairs.
Southern growth
The project is a small part of the company’s much larger plans for its Memphis facility. The $40 million expansion plans were created in 2004 but have evolved since.
BNSF, whose mainline rail route is from Los Angeles to Chicago, is poised to make Memphis an even more integral component on its nationwide network.
“What we’re trying to do is increase our ability to handle traffic,” Faust said. “Memphis is a major gateway throughout the Southeastern United States. There’s a demand for moving those goods and services to a point like Memphis where we interchange with other carriers to distribute to points in the Southeast to satisfy that growth. That’s what we’re trying to do.”
The Memphis facility handles 250,000 intermodal “lifts,” which means the transferring of cargo, typically a trailer, onto or off of trains. If a trailer is lifted onto a train, it likely came from a truck that dropped it off at the facility. If a trailer is lifted off a train, it is hooked to a truck and sent to its next destination.
Faust said he expects the number of lifts to double in the company’s initial expansion phases.
“We want to expand it to more,” he said. “We think within the next five years, conservatively speaking, we’ll be at 500,000 lifts – with the ability to increase that.”
But how much? Faust projected a time when BNSF could reach a million lifts thanks to the population growth in the Southeast and the arrival of manufactured goods from Asia.
Ripple effect of growth
BNSF’s expansion in Memphis will create an estimated 150 new jobs by December 2008, Faust said. Of course, not all of those jobs will be with the railroad; some will be contract employees hired to keep up with the expansion of the operation.
“That’s true for intermodal operations across the United States,” Faust said. “They won’t actually be BNSF employees, but they are full-time people hired to support that intermodal hub growth.”
The expansion of BNSF in Memphis should create a ripple effect of other new development and growth in an area buzzing with warehouse, distribution and transportation industry.
For example, the strip mall BNSF has purchased and will renovate once was filled with a building supply company, a pawn shop and a restaurant, Down South. Now it is empty, an eyesore abutting the railroad tracks.
That type of change in the landscape excites people like Dr. Martin Lipinski of the University of Memphis engineering department, an authority on transportation issues in this area.
“It’s terrific that they are making this investment,” he said. “That’s great that they’re going to bring many, many more containers into the Memphis area. It can be translated into economic development as we can expand our already successful warehouse/distribution activities in the community.”
Lipinski cited other big rail expansions in the Mid-South, such as Canadian National’s presence in Pigeon Industrial Park and Union Pacific’s effect on nearby Marion, Ark.
“We are seeing considerable amount of investment by the railroads in the Memphis area,” Lipinski said.
Community support
As BNSF ramps up its expansion plans here, Faust said there are still many unknowns, such as how much the company’s presence will grow and how soon. That means forming partnerships with local officials to ensure compatibility.
“It has to be part of a strategic plan, because you have to work with the City of Memphis and its infrastructure to make sure it’s controlled growth,” Faust said. “We’ll work with city management to make sure we don’t put any undue burdens on the city’s infrastructure and its ability to handle what that would mean to the community.”
Industry watchers such as Lipinski expect the community to accept BNSF’s plans for growth wholeheartedly, especially in light of another transportation company’s local stature.
“We have seen this impact from FedEx, what it has meant to certain kinds of shipments that are very, very time sensitive,” he said. “We’ve seen industries locate here because of the easy access to FedEx. There’s more and more of a potential to develop additional warehouse/distribution facilities in the area.
“The community is very supportive of this, and we recognize the need for infrastructural improvements to support it.”