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Outsize growth for inland port

The South Carolina Port Authority’s inland port 212 miles west of Charleston has been successful generating cargo business.

   The South Carolina Port Authority’s inland port 212 miles west of Charleston has been so successful generating cargo business and converting truck traffic to rail in its first 30 months in operation that officials already are considering expansion, and creating a second facility elsewhere in the state to shuttle cargo containers to and from the seaport.
   Volume at the intermodal terminal, which is served by the Norfolk Southern railroad, grew 76.5 percent during its second full calendar year of operation, with 75,111 total moves on and off trains—well ahead of the agency’s target of 100,000 annual moves within five years.
   The facility is averaging more than 7,000 rail lifts per month now, which translates into hundreds of truck transfers a day. When the facility opened in October 2013, it moved about 10 to 15 containers a day by rail and the following month it handled 876 rail moves. Today, trains are full with 180 to 200 containers per day, six days a week.
   Located in Greer, S.C., the 40-acre cargo station essentially is a marine terminal without water—giving shippers in the western Carolinas, eastern Tennessee, northern Georgia and even western Virginia the ability to import and export without the cost and hassle of sending trucks all the way to the coast. It receives one inbound train five days per week, has an outbound train six days per week, and is open around-the-clock for truck transfers. Motor carriers can make a double move—import drop and export pick-up—in under 30 minutes, according to port authority officials.
   Bringing the seaport closer to retailers and manufacturers that ship internationally translates into lower transportation costs because trucking is typically more expensive than rail, especially if drivers with long-distance loads have to overnight at a hotel because they’ve exceeded the federal limit on hours behind the wheel. It also serves as a forward depot for the pick-up and return of empty containers, as well as providing off-dock storage space for containers and chassis, with lower per diem and detention charges.
   From a public standpoint, it reduces highway congestion and diesel emissions.
   “We did a lot of really smart things there, but one was to run it as a port terminal,” SCPA Chief Executive Officer Jim Newsome said. “We have a grounded operation there and we think that’s the future of rail ramps in general in the chassis pool environment. We think you’ve got to run a grounded operation not a wheeled operation, because every day a box is on wheels it’s incurring about a $25 per day charge.”
   Initially, port officials targeted major port-dependent businesses in the upstate area that could realize supply chain benefits by exchanging cargo near their facilities. BMW, which operates a huge manufacturing plant a few miles away, was the anchor customer and driving force behind the inland port. Today, it represents less than 50 percent of the inland port’s volume. The German automaker imports engines, transmissions and other components that arrive by ship in Charleston and are whisked by train to Greer. Other dry-port users include BMW suppliers, major tire manufacturers with plants in South Carolina, forest products, cotton producers, and apparel and footwear companies.
   Some of the cargo captured by the inland port previously went through ports such as Norfolk, Va., and Wilmington, N.C.
   The dry port, equidistant from Atlanta and Charlotte, N.C., is likely to see volumes increase again in 2016 as more manufacturing and distribution operations spring up in the upstate region. Discount retailer Dollar Tree in April was scheduled to open a $104.5 million, 1.5-million-square-foot distribution center about 30 miles to the east, in Cowpens, and Newsome said the company has indicated it definitely plans to utilize the rail ramp. Drug store chain Rite Aid is nearly done building a $90 million, 900,000-square-foot warehouse in nearby Spartanburg that will support about 1,000 stores in the Southeast. Japan’s Kobelco Construction Machinery Co., Ltd., which makes construction equipment, such as excavators, recently built a plant in Spartanburg County to serve the North American market and is expected to use SCPA’s facilities to import components. And Techtronic Industries, which makes a wide variety of products, is building a new distribution center in northwestern South Carolina to support its manufacturing operation there.
   “We thought it would open up a new distribution cluster in the upstate, meaning that businesses would locate distribution centers around a hub that was overnight rail served,” Newsome said.
   Officials also anticipate demand from poultry producers after three logistics companies added about 550,000-square-feet of cold storage space in Charleston and the port authority is installing electrified racks at the Wando Welch Terminal for storing refrigerated containers.
   A key selling point for the inland port is that cargo can be in Greer the morning after vessel discharge in Charleston, assuming proper planning and notification. Trains arrive about 6 a.m. from Charleston and depart in the other direction about 8 p.m., with a 4 p.m. cutoff for export deliveries.
   “The facility is open 24/7. So it really serves the just-in-time, just-in-sequence market very well,” Newsome said. “And believe it or not, it’s export dominated. I would have probably told you that it would be import dominated for a while. We actually need more import cargo there.”
   The process is simple for cargo owners because payments are simply built into contract rates with 14 ocean carriers, rather than having to pay the Norfolk Southern and SCPA separately. 
   The inland port, combined with the Rapid Rail Drayage program in 2012, has helped boost rail traffic at the Port of Charleston. Intermodal cargo has to be trucked about 15 miles to rail ramps in North Charleston operated by CSX and NS, adding another layer of complexity to the supply chain. Under the Rapid Rail Drayage program, SCPA employees coordinate drayage dispatch between marine terminals and the rail ramps for all shipping lines. Having full control of all truck loads enables the port to operate a “virtual on-dock rail” and match inbound and outbound loads with available equipment in each location to minimize empty backhauls.  
   The SCPA moves more than 22 percent of containerized freight (as measured in number of boxes, not TEUs) in and out of terminals by rail, up from 12 percent in 2010. Intermodal lifts in Charleston have grown 166 percent to 257,995 from 96,872 in 2011.
   Newsome said there is opportunity for rail to transport 25 to 30 percent of the port’s inbound and outbound volume.    
   In March, Norfolk Southern added a two-day service each weekday connecting Charleston and NS’s intermodal facility in Charlotte, giving shippers a more direct intermodal option for moving international cargo.
   Intermodal handling will become more efficient in 2020 because the state is funding a $225 million intermodal container transfer facility adjacent to the new Navy base container terminal being built by the SCPA. All international container traffic moving by rail will go through the new facility, which will be served by both mainline railroads.
   Officials then plan to launch a barge service to shuttle containers between the intermodal/Navy base facility on the Cooper River and the Wando Welch Terminal on the Wando River to remove as many trucks as possible from Interstate 526, Newsome said. 
   Greer’s success as a logistics hub in the Southeast has the port authority making expansion plans. Options under consideration include paving 15 to 20 available acres to store chassis and empty containers, adding plugs in the yard for refrigerated containers, and buying the same wide-span cranes railroads have begun operating in intermodal yards.
   The inland port uses five rubber-tired gantry cranes that the port authority relocated from marine terminals in Charleston. Those types of cranes aren’t common in rail operations because they are shorter and wider, but officials opted to use the spare equipment until they had a better idea if the intermodal facility would flourish.
   Wide-span cranes would be able to load and unload more railcars. The existing cranes straddle two tracks, but there are three storage tracks with railcars that the cranes can’t reach. Port personnel have to wait for an NS train to bring railcars off the storage tracks and onto the working tracks, but a wide-span crane would be able to load and unload railcars on all five tracks. 
   Even a crane with a cantilevered arm that could reach out to that third track would make a big difference in efficiency because boxes could be directly transferred between the stacks and the railcars. Currently, containers have to be loaded on yard tractors that shuttle between the stacks and the rail cranes.
   The SCPA never operated a full-scale intermodal terminal before, so there was a learning curve for personnel. Most of the inland port’s employees are locals, who spent six months in Charleston training at the Wando Welch and North Charleston marine terminals and driving home on weekends. 
   Port staff members are on the phone with the Norfolk Southern several times a day coordinating train arrivals, departures and other details.
   Newsome said the SCPA is seriously studying the addition of a second inland port in South Carolina, with details likely revealed in the 2017 capital plan to be released in June.
   He declined to identify the location of a new dry port so as not to jeopardize land acquisition efforts, but said the key criteria are having mainline container service and a cargo base. The new site would not cannibalize Greer’s business, he added.
   South Carolina is one of three states with port-owned intermodal rail hubs. The others are Georgia and Virginia, which pioneered the concept 27 years ago. 
   The Georgia Ports Authority is building an intermodal rail transfer facility in the northwestern corner of the state that is scheduled to open for business in 2018. The GPA has a partnership with private company that operates an inland gateway in Cordele, 200 miles to the east of the Port of Savannah, which handles cotton, clay, lumber and other agribusiness products for shippers in Georgia, Alabama and Florida.
   What sets these facilities apart from railroad intermodal hubs is that they are focused on international container transport and look more like port terminals.
   “We realize you just can’t invest in port facilities on the water, you have to make sure that there are ways to move freight and catch freight for your port,” Newsome said. “So it’s a way to move our port footprint further to the interior to create cargo that is sticky to our port. The rail line between Greer and Charleston only runs to Charleston.”