(The following story by Robert E. Martinez appeared on the Post and Courier website on August 5, 2010. He is vice president of business development for Norfolk Southern Corporation and the former Secretary of Transportation for the Commonwealth of Virginia.)
CHARLESTON, S.C. — Our roots are here. With nearly 700 employees and 780 track miles, we’ve been providing service to the Charleston area and the state of South Carolina since 1827. Unfortunately, we at Norfolk Southern were recently surprised to learn of a three-party draft memorandum of understanding (MOU) that would directly impact our ability to operate in the Charleston region. While we respect North Charleston Mayor Keith Summey’s desire to promote his agenda, we believe a more inclusive approach would better serve the region. We also need to correct some inaccuracies in his commentary of Aug. 1.
We note that Mayor Summey’s plan hinges on the use of public money to move forward. For a number of reasons, over the past few years the Port of Charleston has moved from being the second largest container port on the East Coast to No. 4. Meanwhile, new investment and job growth in the region have suffered. Is it appropriate, then, to use public funds to favor one private rail carrier over another?
Nearly every major new terminal recently constructed on the East Coast has included equivalent dual access for both NS and CSX. The most recent major eastern marine terminal — the massive APM Terminal at the Port of Hampton Roads — is fully dual rail. Working with the Commonwealth of Virginia, NS agreed to sell a small parcel of property to CSX so that they could achieve full, equivalent access to APM. When one studies the dual rail access initiatives taken by its competitor port cities, it would be short-sighted for the Charleston region to devise a strategy that would do otherwise.
We believe Mayor Summey has also missed the key point at Savannah. The primary driver of Savannah’s growth was not that they had NS and CSX on the port prior to the construction of the intermodal facilities, but the port’s strategy of locating warehousing and distribution capacity within a short truck dray of the marine terminal gates. This created demand for the ships with local traffic which in turn brought significant intermodal volumes with it.
Incidentally, the mayor may also be unaware that for the CSX-served intermodal facility to work, NS had to modify its track ownership at an adjacent jointly-served rail yard. We agreed to swap tracks we owned with CSX to allow them the ability to compete via a facility they could serve.
From the region’s competitive position, equivalent access to a container facility is all about market access across the U.S. Norfolk Southern handles more than 50 percent of the intermodal traffic in the eastern U.S., and most of the major container lines are aligned with us for the traffic moving through Charleston. Nonetheless, NS and CSX do not serve all the same markets from the Charleston region. For example, NS connects Charleston to Cincinnati, St. Louis, Kansas City and Dallas, which are not directly served by CSX out of Charleston. Is it logical to limit the region’s ability to compete by limiting which markets will be served?
The real competitive issue at Charleston with regard to the south access is not a question of fees, but of operations. To serve Macalloy, NS trains moving south will need to cross tracks controlled by CSX, five streets at grade, a second CSX-controlled crossover, Meeting Street at grade, and likely block street access to several businesses for up to an hour. Moreover, customers’ schedules will require that NS and CSX run trains within the same timeframe over the same track. If CSX controls the track, the dispatching, and the intermodal facility, they will have a huge operating advantage over NS.
That’s not a complaint; it’s just an operating reality. NS would have to endure unacceptable delays on our time-sensitive intermodal container business. Regardless of the route, we also find it curious that the MOU does not contain a single reference that would require CSX to afford NS access to its track or Macalloy.
Mayor Summey has stated that BMW has no part of this debate. We beg to differ. Norfolk Southern has served the BMW facility at Greer since its opening. We see a strong worldwide market for the BMWs produced in South Carolina, but not through the space-constrained Union Pier. Long term, the best site for a new BMW ro-ro terminal is Veterans Terminal, which NS would access via the same route as the proposed jointly served intermodal facility the mayor so ardently opposes. Simply stated, any effort by North Charleston to cut off our north access also threatens ever locating BMW on Veterans Terminal.
Given its network in the region, CSX can access a future intermodal facility from the north or south. NS cannot. We reach the Navy Base from the north and we intend to continue to serve it from that direction. A proposal we would support would focus on development of a single intermodal facility near the western edge of the Navy Base, proximate to the Clemson property, to be operated by the South Carolina Public Railway. Each major railroad would have a portion of the jointly served facility reserved for their traffic. Either way, CSX could still run its trains over a portion of the same route we would use and release the rail line along Spruill Avenue to the City of North Charleston, which is at the heart of the draft MOU, and do so without building new track infrastructure through the Union Heights neighborhood and along the Stromboli Avenue Corridor, where multiple trains would operate at-grade and which would be necessary per the MOU proposal.
South Carolina has one chance to get this issue settled correctly, and the outcome must be good for everyone in the state, not just for some. We seek to ensure that Norfolk Southern’s ability to serve the port and the region not be damaged, which this MOU proposal clearly would do, and that the entire region benefit from an equitable, environmentally beneficent and, perhaps most importantly, competitive rail and investment strategy.