(The following article by Angie Buckley was posted on the Bismarck Tribune website on September 17.)
BISMARCK, N.D. — Work will soon begin on a city-owned facility that will allow all kinds of freight to come in and out of Bismarck, on its way to or from anywhere in the world.
Although the shipping center is in the first phases, part of the developers’ dream calls for a large facility with several businesses locating distribution and assembly sites here.
The first phase of construction will cost $7 million, from federal grants and city Vision Fund money. It’s expected that operations will make the facility pay for itself, but the city might someday need to allocate city sales tax money for the center.
In mid-May, the city of Bismarck hired consulting firm Kadrmas, Lee and Jackson to study the feasibility of establishing an intermodal shipping facility, which ships products and goods in containers. Niles Hushka, CEO of KLJ Solutions, and Brian Eiseman, a KLJ project engineer, soon discovered that there’s not enough containerized freight for Bismarck to build an intermodal facility.
Instead, they discovered the most demand in the region is for transloading shipping. Such a facility can move all freight, including containerized cargo. There’s a hole between the region’s major shipping points, Bismarck City Commissioner Sandi Tabor said, and the transloading center here will help fill the gap.
Over the last few months, meetings and negotiations between key players — including Gov. John Hoeven, Bismarck-Mandan Development Association President Russ Staiger, Bismarck Mayor John Warford, Tabor, Sen. Kent Conrad, D-N.D., Bobcat Co. and Burlington Northern Santa Fe Railroad Co. — resulted in Hushka’s recommendation to Bismarck’s City Commission on Thursday: set up the Northern Plains Commerce Center, a transloading facility, at the Airport Industrial Park in southeast Bismarck, where 190 acres are available for the project.
In addition to access for trucks and trains, the Northern Plains Commerce Center will tie into the airport. The city is studying the feasibility of establishing on-demand micro-jet service, which is expected to play an integral part to the project.
The $7 million for the operation’s first phase builds the necessary basics for the center — a connection to the railroad tracks, infrastructure for the site, plus maintenance and port of entry buildings.
In its first year, the Northern Plains Commerce Center may operate at a net loss. However, Tabor thinks that with depreciation and the assets of infrastructure, it will show a net profit on a balance sheet. She expects the project will break even instead of show a loss. And any loss, she said, could be made up with Vision Fund money.
The Northern Plains Commerce Center will have to classify as a Foreign Trade Zone, a federal designation allowing manufacturers to pay import or export duty fees on finished products only, rather than each assembled part. Hushka said the application process will take about a year, but the Northern Plains Commerce Center can qualify as a subzone to Grand Forks’ Foreign Trade Zone. The classification also will allow businesses to delay paying tariffs if products are shipped to other U.S. Foreign Trade Zones.
Right now, the only business that has signed on to operating at the Northern Plains Commerce Center is Bobcat Co., which assembles and ships machinery. Hushka expects that the companies located at the Northern Plains Commerce Center will build their own warehousing to store products.
The Northern Plains Commerce Center’s growth, Staiger said, will come over time. The BMDA will recruit businesses to set up at the Northern Plains Commerce Center, and meet their needs as they come into the project.
City Administrator Bill Wocken said he doesn’t expect the energy or money committed to the Northern Plains Commerce Center to take away from or delay other city projects. There only will be a modest number of jobs from the Northern Plains Commerce Center, Wocken said, but businesses will create jobs as they set up warehouses, factories and manufacturing here. The more economic activity in the community, the better, he said.
In determining that a transloading facility would work for Bismarck, KLJ surveyed 60 companies in a 150-mile radius of Bismarck. They discovered that more than 80,000 total loads of freight are coming in and out of Bismarck in a year. That means about 30,000 rail cars will go through the Northern Plains Commerce Center in a year to handle the shipping. Of that, Eiseman expects the Northern Plains Commerce Center to get about 35 percent in the first year and about 65 percent by the fifth year.
“Everything centers around freight — it will generate the revenue to make this project work,” Eiseman said.
Large and small companies will be able to ship through the Northern Plains Commerce Center. Right now, trucking is the most-used option for shipping freight. Because it costs too much for businesses to run trucks more than 450 miles, they are limited in where they can access goods and products. The Northern Plains Commerce Center will make air and rail shipping viable for businesses in the region, Hushka said, and as a result will open markets all over the world.
“The issue is that when its up and functional, people who use freight will have to change their mental mindset — they can look for their product all over,” Eiseman said.
Minot and Fargo also are looking at establishing major intermodal or transloading facilities. Fargo has smaller transloading centers, and Bismarck has others dedicated to specific businesses. Hushka said the Northern Plains Commerce Center’s advantage is that anyone can use its services.
The Northern Plains Commerce Center will affect shipping practices around the region, especially to the west and south of Bismarck, Hushka said. As a result of the Northern Plains Commerce Center, he expects that distribution and manufacturing centers may locate in Bismarck to be near the transloading services.
“There’s nothing to the south or north until Winnipeg (Manitoba),” Hushka said. “We’re right in the middle, we couldn’t be in a better place.”