(The following story by Eric Smith appeared on The Daily News website on December 23, 2009.)
MEMPHIS, Tenn. — All things considered, the local logistics sector fared better than many industries during 2009 as the recession claimed casualties throughout the U.S. Granted, some logistics, distribution and transportation companies suffered layoffs and closures, but the overall outlook is as bright as can be expected during these bleak times.
The most obvious highlights came from the railroads, most of which committed to or completed major upgrades to their Memphis operations.
BNSF Railway Co. placed the finishing touches on a $200 million expansion to its Memphis Intermodal Facility at Lamar Avenue and Shelby Drive. The yard now has a capacity of 600,000 annual intermodal lifts, or the transfer of cargo containers between trucks and trains.
A full buildout of the yard will allow up to 1 million lifts annually should the railroad add more parallel tracks and cranes in the future, a likely scenario because the railroad has committed so much time and money to enhancing its local infrastructure.
Across town, Canadian National Railway Co. finished a $100 million renovation to its 433-acre switching facility. When the Montreal-based railroad celebrated the completion of the project, it also renamed the yard after outgoing CEO and native Memphian E. Hunter Harrison.
Harrison was instrumental in establishing Memphis as one of the most critical links in CN’s “three-coast” strategy. The railroad’s network connects the Pacific, Atlantic and Gulf coasts, helping cover every angle of the global marketplace.
“This company, this organization, is extremely important to the future of Memphis,” Harrison said at the fall event renaming the yard in his honor. “This gateway is critical to us. It has tremendous strategic value. We think Memphis, going forward, is going to play a vital and larger role than it ever has in the past. You should seize that opportunity.”
Apex of an industry
Without a doubt, though, the biggest news all year came from Norfolk Southern Corp. The Norfolk, Va.-based railroad announced plans to build a $110 million intermodal yard on 570 acres of rural land in Fayette County, just a few miles from the heart of Memphis’ logistics and distribution district.
The Memphis Regional Intermodal Terminal, scheduled to open in January 2012, will serve as a key western component of Norfolk Southern’s Crescent Corridor, a 2,500-mile, $2.5 billion public-private rail network linking the southeastern and northeastern U.S. and designed to take 1 million long-haul trucks off the road.
Norfolk Southern, whose Forrest Yard intermodal facility near the Mid-South Fairgrounds is landlocked and unable to expand, will accommodate more than 327,000 containers and trailers annually, and up to 2,177 parked containers and trailers on chasses.
Environmental studies are under way and the railroad hopes to break ground on the project in the spring.
“This is a great site for us,” Moorman told The Daily News last summer. “The Crescent Corridor is a concept that’s matured over the past six or seven years, but we’ve had a constrained footprint (at Forrest Yard) for a long time. Having this new facility, having this capability to grow, is huge for our company.”
Some issues do remain, however, such as the construction of an overpass on Tenn. 57, under which the rail spur into the intermodal yard can pass, as well as a handful of protests from area residents.
Corridors to change
In other logistics news from 2009, work continues on Memphis International Airport’s air traffic control tower and a construction bid recently was issued for a new ground transportation center. Also, the airport’s lone east-west runway was reconstructed, reopening just in time for FedEx Corp.’s busy holiday season.
Speaking of FedEx, company founder and CEO Fred Smith spoke at a spring conference about the importance of “going green,” something the industry is taking more seriously.
Also, Medtronic Inc. and Nike Inc. each opened new distribution centers, bolstering Memphis’ status as an important link in the global supply chain.
The aerotropolis initiative got a much-needed boost when the Memphis City Council approved $1.6 million in funding for the beautification of Plough Boulevard, the road leading from Interstate 240 to the airport.
And because of difficult economic conditions, 2009 proved to be a good time to study a host of transportation-related problems.
IHS Global Insight completed the “Memphis Regional Intermodal Infrastructure Assessment” in conjunction with the Greater Memphis Chamber, Wilbur Smith Associates and the University of Memphis’ Intermodal Freight Transportation Institute. The report reveals a healthy outlook for Memphis but also a need for the city to make the improvements needed to stay ahead of its competition.
In another study, the Memphis Metropolitan Planning Organization, the chamber, IFTI and the Tennessee Department of Transportation hired Cambridge Systematics Inc. to conduct a study analyzing the Lamar Avenue corridor.
Clifford Lynch is a logistics expert who runs the consulting firm C. F. Lynch & Associates and also serves as chairman of the Regional Logistics Council’s marketing committee. He said the city’s transportation companies have made important enhancements to infrastructure that will bode well for Memphis when the financial climate improves.
“Considering the fact that we had the economic downturn that we did, I think the carriers have done reasonably well and, more importantly, they’ve all positioned themselves to take advantage of a significant amount of new business, which is good,” Lynch said. “When the need for capacity does come back, we won’t be clawing and scrapping, trying to find the boxcars or other freight cars or trailers.”