(The following story by Eric Smith appeared on the Daily News website on July 22, 2009.)
MEMPHIS, Tenn. — Although Norfolk Southern Corp.’s planned $129 million intermodal yard won’t be built within the city limits but instead in neighboring Rossville, Memphis’ logistics and distribution industries stand to benefit from the railroad’s decision to expand its local presence.
Not only is the railroad’s sprawling facility dubbed the Memphis Regional Intermodal Terminal, but it will be close enough for Memphis-based companies to gain unprecedented logistical access to eastern cities.
“It will essentially rebuild the supply chain from Memphis and the Gulf Coast up to Philadelphia, New York and New Jersey, and eventually on to New England,” Norfolk Southern CEO Wick Moorman said during last week’s event announcing the company’s site selection.
The facility, which is scheduled for completion in January 2012, will serve as an anchor for Norfolk Southern’s “Crescent Corridor,” a $2.5-billion, 2,500-mile rail network designed to take a million trucks off roads that don’t have significant rail parallels, including Interstates 40 and 81.
In Tennessee, that could remove 573,000 trucks from local highways and provide 5,000 jobs, a couple of projections that helped win over Gov. Phil Bredesen, who also spoke during last week’s soiree at the Bank of Fayette County in Piperton.
“The Crescent Corridor and the Memphis terminal will enhance the multimodal freight options for this region and for our state,” Bredesen said. “This specific facility will allow for improved intermodal service between Memphis and the Northeast, providing the region with enhanced access to the global market.”
Trains and trucks
Martin Lipinski, director of the Intermodal Freight Transportation Institute and an engineering professor at the University of Memphis, said establishing a stronger link between Memphis and the East Coast is imperative to maintain the city’s status as America’s Distribution Center.
A coming study that Lipinski’s institute is compiling with Lexington, Mass.-based IHS Global Insight and the Greater Memphis Chamber will discuss the need for local shippers and third-party logistics firms to consider eastern U.S. ports such as New York, Norfolk, Va., Charleston, S.C., and Savannah, Ga., plus the Canadian port of Halifax, Nova Scotia.
The Norfolk Southern terminal will aid in those efforts.
“In the introductory chapter, when (the study’s authors) are talking about trends,” Lipinski said, “they’re saying, ‘Memphis, you might want to look east a bit a little bit, too. You’ve kind of looked to the west a lot because that’s where things have been coming from. There are going to be opportunities coming from the east that Memphis should keep their eyes on and be ready to take advantage of.’ ”
Those prospects excite Anne McMahon-Thielemier, the Memphis-based market manager for intermodal marketing for Norfolk Southern. She said the railroad is eager to begin accommodating companies’ shipping and distribution needs with this new intermodal terminal, where cargo containers are transferred between trucks and trains.
The company’s current operation at Forrest Yard near the Mid-South Fairgrounds is only 50 acres and has restricted capacity. The new terminal, more than 10 times that size, will be able to handle more than 327,000 containers and trailers annually with a paved area to park 2,177 trailers and containers mounted on chasses.
“It’s like Disneyworld for intermodal facilities. My ops guys are thrilled,”
McMahon-Thielemier said. “We’re going to offer so much more and it’s going to be truck competitive. That’s our goal – to get those trucks off the highway. Now that we have this facility in Memphis, we can accommodate.”
Efficiency equates to money
Michael McClellan, the railroad’s vice president of intermodal and automotive marketing, said the Memphis terminal will be one of the largest in the railroad’s network. That’s important because an expansive footprint allows Norfolk Southern to operate more efficiently.
“You want the motor carriers who come into this terminal to spend as little time as possible, because every minute that they save by moving through an efficient terminal is a minute you don’t burn,” McClellan said. “It’s a minute of their time.”
Getting trains to the yard, however, is one of the issues that remains unresolved. The railroad will build a spur from its main rail line – which runs parallel with Tenn. 57 – south to the terminal, but an overpass needs to be built so the spur can travel underneath the highway.
Tennessee Department of Transportation Commissioner Gerald Nicely wasn’t ready to comment specifically on that project, but he reiterated the state’s “commitment to Norfolk Southern and to the governor to make this project work.
“We’ll do all we need to do.” Nicely said.
What’s important in Nicely’s eyes is the freight diversion from I-40, on which some stretches reach 40 percent truck traffic even though those stretches were designed for 20 percent, he said.
“There’s no doubt that this particular project, long term, will have a significant, positive impact on our entire transportation system – not just rail and increasing it, but also relieving this congestion on I-40,” Nicely said.
The new terminal and the addition of rail traffic in the eastern U.S. also helps the railroad “green” the transportation industry with more trains, which use one-third the amount of fuel required by long-haul trucks.
Muscling up
Norfolk Southern’s multimillion-dollar commitment here helps the greater Memphis area – one of just three cities in the nation with five Class I railroads – burnish its status as an intermodal nexus.
Union Pacific has a relatively new intermodal terminal in nearby Marion, Ark.; Canadian National Railway Co. and CSX Intermodal operate a joint intermodal yard at Frank C. Pidgeon Industrial Park near Downtown Memphis; and BNSF Railway Co. is almost finished with its $200 million expansion of its Southeast Memphis yard.
Dexter Muller, senior vice president for community development at the chamber and head of the logistics council, said yet another railroad boosting its intermodal presence bodes well for the city’s place in a global economy.
“The investments (Norfolk Southern is) making here make us strong for the future,” Muller said. “The vision they have has Memphis playing a prominent role.”
McClellan said the railroad is expanding its Memphis presence because the city has proven that it’s a major player when it comes to moving goods from one place to another, whether it’s by air, road, river or rail.
All Norfolk Southern wants to do is try to keep up.
“Memphis is a huge distribution hub,” McClellan said. “You guys have created it here, and it’s a confluence of the airport, the river system and all the rails. The shippers, our customers, have created a very strong distribution infrastructure in this market. We’re going to meet their demand.”