(The following story by John R. Pulliam appeared on The Register-Mail website on March 23, 2009.)
GALESBURG, Ill. — As development of a $750 million intermodal facility is put on hold in suburban Kansas City, the question arises again whether such a facility will ever be on BNSF’s radar screen here. A local economic development official said that, while an intermodal hub would be nice, it is not necessary for the logistics park to succeed.
The intermodal facility, which is where truck trailers and containers are transferred to trains and containers are transferred from trains to trucks, is expected to create about 260 jobs in Johnson County, Kan.,, with more than 3,000 spin-off jobs. The facility in Kansas City is adjacent to a 500-acre logistics park; there long has been speculation as to the possibility of the railroad building such a facility in Galesburg.
Forsberg said BNSF has more than 30 intermodal facilities across its system. He said the railroad has “probably averaged building a new one every five years and they’ve been near the major markets.”
One of the newest is located near Logistics Park-Chicago, which is actually in southwest suburban Elwood. He never specifically answered the question of the chances of an intermodal facility here but hinted there are factors working against one.
“The key to where we put our new intermodal facilities is they are as close as possible to the major metropolitan area serving as a distribution point for a region,” Forsberg said. “Because of recent high energy costs and the shortage of long-distance drivers, the (trucking) companies are trying to locate their facilities as near (the intermodal facilities) as possible.”
As for the possibility of an I/M hub here, Forsberg said one thing working against such a facility is “you’re unlikely to pull volume away from the major metropolitan areas, that begs the question, do you have enough volume on your own?”
Even that can be tricky. BNSF closed its intermodal facility in Oklahoma City, with a metro population of about 1 million, as too many companies opted to travel the extra distance to the intermodal hub near Fort Worth, Texas, where rates were better, because of the larger volume. On the other hand, BNSF does have an intermodal facility in Wichita, Kan., which is within 200 miles of K.C. Wichita, however, is much larger than Galesburg, with a metro population slightly larger than either Peoria or the Quad Cities.
“We do have some, like in Billings, Mont., but there’s no big metro area within 200 miles of Billings,” Forsberg said.
Dick Johnson, vice president of operations for the Galesburg Regional Economic Development Association, has a somewhat different take on how Galesburg stacks up in terms of population. He said that 80 percent of the U.S. population lives within a 24-hour drive of Galesburg, which, he said, is a greater percentage than those living the same distance from Kansas City. Johnson said an intermodal facility is not a must for a successful logistics park here.
“Eventually, this 350-acre site (Logistics Park-Galesburg) could be filled with third-party assemblers,” he said.
Johnson said Caterpillar and John Deere outsource work on some smaller components to smaller companies. He said with I-74 providing easy access to I-80, I-88, I-55, I-39 and I-180, as well as the railroad lines here, Galesburg provides shippers the opportunity to move their products easily in all directions. He said the new logistics park in Elwood, near Joliet, is jammed with traffic, which slows the movement of freight and takes a heavy toll on area roads.
“What the logistics park would give is an easy on, easy off from the interstate,” Johnson said. He added that Galesburg also could serve the railroad through manufacturing and repair of parts needed for trains. Westcode is an example of a company here that makes air-conditioning for railroads, most Amtrak and Chicago suburban commuter trains.
“There’s all sorts of things that can happen that haven’t happened yet,” Johnson said. “The key is if you don’t have a showpiece that shows you’re in the logistics business and offer other possible sites” companies are not going to look at the city.
“The last industrial prospect we got, which was probably three or four weeks ago, they came to us specifically because of the logistics park. They got that off of our Web site,” he said. “It turns out, the best location for them in Galesburg is not the logistics park,” but the company might not have contacted GREDA if not for the land set aside for that development.
“The marketplace rally helps drive where (intermodal facilities) are going to be,” Forsberg said.