N.C. port authority expects boost from new intermodal terminal.
The North Carolina State Ports Authority expects the Port of Wilmington will benefit from plans by CSX Corp. to both build a $272 million intermodal rail hub near Raleigh by 2019, as well as start direct intermodal service between Wilmington and Charlotte later this year.
In January, CSX proposed building a rail hub it has dubbed the Carolina Connector, or CCX, on a 450-acre parcel along its main north-south line near Selma, N.C., and Route 95 in Johnston County.
The Class I railroad said the CCX hub would “spur economic development in the region and help position eastern North Carolina as a major transportation logistics hub.”
The plan was praised by North Carolina’s Gov. Pat McCrory, whose office said it would bolster economic development in eastern North Carolina and could eventually bring 1,500 statewide jobs and provide an estimated $329 million in public benefits to the state. However, CSX’s plan has met local opposition.
Within a few days of the CSX announcement, Tony Braswell, chairman of the Johnston County board of commissioners, issued a statement saying it had “heard from upset landowners” and was engaging CSX and the state to “collaborate on solutions that will recognize the concerns of area property owners and our values as a community.”
The Raleigh News & Observer newspaper said a McCrory spokesman told it a few days after the project was announced that the site chosen by CSX “does not appear to be a viable” and that it would work with CSX to find an alternative.
Despite the opposition, CSX said it’s still committed to the project, adding “We look forward to working with all interested stakeholders to address concerns and move the project forward.”
The Jacksonville, Fla.-based railroad said it would invest $150 million in the CCX rail hub, but that execution is contingent on securing $100 million in infrastructure investment funds that have been proposed within the state of North Carolina’s Strategic Transportation Investment (STI) process.
McCrory agreed it was a good match—“precisely what was envisioned when I worked with the General Assembly to develop the STI law and scoring process.”
The balance of the funding—$22 million—would come from other infrastructure and investment programs, CSX said.
The railroad proposed a timetable that would see engineering, design, and property acquisition take place this year, with completion of permitting next year, construction of the project in 2018-2019, and startup of operations at the proposed terminal in 2019.
Paul J. Cozza, executive director of the North Carolina State Ports Authority, noted the CCX is not just another intermodal ramp, but similar to CSX’s heavily publicized facility in Northwest Ohio, which is used to interchange containers moving to and from many different parts of the country.
“It’s a hub. And they’re utilizing these as a hub point for bringing a lot of activity from different parts of the U.S.,” he said. Cargo might be interchanged that originates in or is destined not only for the Carolinas, but also cities such as Atlanta, Memphis, and Birmingham as well as cargo moving to and from Ohio or the Northeast.
He said there will be multiple trains moving in and out of the CCX hub and once volumes grow enough it is not inconceivable that Wilmington could have daily intermodal trains.
The location that CSX is proposing is “a very active area economically that they don’t have a terminal in right now,” said Larry Gross, president of Gross Transportation Consulting. In addition, “it is at the midpoint of the north-south corridor for them. It will allow them to swap units between trains and link a broad number of terminals in the north with a broad number of terminals in the south.”
Think of the terminal like the “neck of an hourglass,” Gross said. Trains from different locations in the north and south of CSX’s network can be funneled through the terminal and containers swapped between many destinations, much like passengers switch planes at an airline hub.
The terminal will be a smaller version of the rail terminal CSX opened in North Baltimore, Ohio in 2011 that provides a similar function in an east-west direction across the north of the CSX system, he explained, adding, “This terminal will provide basically that same function north and south along the I-95/I-81 corridor.”
Like the Ohio terminal and one in Chambersburg, Pa., the North Carolina terminal will have state-of-the-art, sustainable technology such as electric cranes and environmental-friendly equipment to reduce noise, light and emissions.
As projected, the facility would have initial capacity for 250,000 container lifts, and be expandable to 400,000 lifts. In comparison, the North Baltimore, Ohio terminal, which originally opened in 2011 with a capacity of 650,000 lifts, has since been expanded to 900,000 lifts, and a CSX terminal in Winterhaven, Fla., has capacity for 300,000 lifts.
While Gross believes the terminal may be used primarily for domestic cargo, CSX spokeswoman Kristin Seay confirmed the hub would also provide improved intermodal access for cargo moving to and from the North Carolina port.
Cozza expressed confidence that if the terminal was not built near the proposed site near Selma, another site could be found.
Meanwhile, CSX plans to start an intermodal service connecting North Carolina’s Port of Wilmington with Charlotte in the next four months.
“We haven’t had an intermodal service in over 20 years and bringing it back is huge,” said Cliff Pyron, communications manager for the North Carolina State Ports Authority.
A weekly unit train will connect the port’s on-dock rail terminal with Charlotte, which is “strategically located at the heart of manufacturing and distribution sites in the Southeast, serving the I-85 and I-77 distribution corridors.
“It will take trucks off the road and ease congestion,” he said.
The port authority has inland ports in both Charlotte and Greensboro, but these are not rail ramps, rather they’re essentially container yards where shippers and consignees can drop and pick up equipment. When the CSX service starts up, that yard will be used as a staging area and will be able to pick up and receive cargo from the CSX intermodal ramp which is one quarter of a mile away.
Banner Year. 2015 saw record container volumes handled in the Port of Wilmington—297,612 TEUs, or an 18 percent increase over 2014.
The largest ships calling Wilmington today are panamax-size with capacities of about 4,700 TEUs, Cozza said. But the port is preparing for larger vessels expected to arrive on the East Coast when the new locks of the Panama Canal open later this year.
The port was expected to award a contract in February to enlarge its turning basin, and the $22 million project is planned for completion by June. When finished, the port will be able to accommodate 10,000-TEU ships, Cozza said.
The Port of Wilmington, which is located on the Cape Fear River, 26 miles from the open sea, has a channel depth of 42 feet.
The port currently can accommodate one panamax and one post-panamax ship and will improve its terminal so it can simultaneously handle two post-panamax ships at a time. Larger cranes will be added.
About $100 million is being spent on improvements, with $30 million from the port and $70 million from the state over the next two years.
Cozza said he expects container carriers will increase the size of their vessels after the expanded Panama Canal.
“Talking to all our Asia carriers, they are looking at different scenarios of upsizing strings, string consolidation, and maintaining services with bigger ships,” he said. “They are all looking at it very intently, and they want to get it in as soon as the canal is open. That’s why we’re rushing so much to make sure that… we’ll be up and ready to go for our carrier customer base.”
If carriers do consolidate strings, Cozza believes they will continue to call Wilmington because of the strong market.
He noted North Carolina is the ninth most populous state in the country and generates a lot of cargo from businesses that are located there.
“It’s an underserved market,” he said. “We hear constantly, especially from BCOs (beneficial cargo owners) around our area, how much they want to use this port.”
That includes exporters of agricultural products such as pork, poultry and sweet potatoes—low margin products that are less competitive in the global market if they have to be trucked over long distances.
“Their challenge is we don’t have enough services,” Cozza said, adding the port must attract more carriers and upgrade its facilities to attract them.
The global economic slowdown and depressed freight rates make this a difficult time for carriers.
“We want to help them,” Cozza said. “We want to be able to provide good services that keep their ships moving on time. I also think we have some high margin opportunities here for them as well,” he said, both because the port’s efficiency and ability to decrease inland costs, savings that can be shared by carriers and shippers.
Truckers are able to get in and out of the Port of Wilmington quickly, Cozza said. Turn-times through early February were 18 minutes for truckers making single moves, and 30 minutes for truckers doing dual moves of both drop-offs and pick-ups of containers.
Crane productivity at the port can be 44-55 moves an hour.
At the Port of Wilmington, liner services include a transatlantic service operated by Independent Container Line, which Cozza said is known for offering high levels of service and customer satisfaction
The CKYHE alliance of COSCO, “K” Line, Yang Ming, and Hanjin operates two services that call Wilmington. Evergreen, which is a part of that alliance on many routes, does not yet offer service to Wilmington, but Cozza said the North Carolina State Ports Authority is in discussions with the Taiwanese carrier. Speaking in early February, he said it was still not clear how the merger of COSCO and China Shipping would affect services.
The CKYHE’s AWE1 service calls Ningbo, Shanghai and Busan, while its AWE3 service calls Hong Kong, Yantian-Shenzhen, Kaohsiung, Shanghai and Busan. Recently Zim began offering service through a slot swap with Hanjin.
Maersk/Sealand’s SAE service connects Wilmington with ports in South and Central America, and Maersk offers inbound service to Wilmington from Asia—cargo is transshipped in Manzanillo, Panama, and gets on the SAE service to Wilmington.
Bahri uses multipurpose ships that move roll-on/roll-off, project and container cargoes from the North Carolina port to the Mediterranean, Middle East, and India.
Greig Star, offers two monthly services from Wilmington, one to the Mediterranean and another to North Europe.
Bulk And Breakbulk. Wilmington also handles large amounts of bulk and breakbulk cargoes. In 2015, while containerized cargo made up nearly 2.5 million tons or 54 percent of the port’s tonnage, bulk accounted for about 1.9 million tons or 40 percent, and breakbulk, 279,322 tons or 6 percent.
Enviva, a company that manufactures wood pellets, is expected to open a new facility for storing and shipping up to 1 million tons of pellets through Wilmington in the first quarter of this year.
North Carolina’s other major port, Morehead City, handled 2.1 million tons of bulk cargo and 315,440 tons of breakbulk cargo.
Morehead City is also looking at a possible project for wood pellet exports.
Phosphate-based products produced by the PCS Phosphate Co., a subsidiary of Potash Corp., are a major cargo at Morehead City.
Wind power equipment manufactured by Gamesa is being imported for the wind farm that Iberdrola Renewables is building for Amazon in northeast North Carolina which may include up to 150 turbines.
The port will be used to ship components to New York for the new bridge being built across the Hudson River to replace the Tappan Zee Bridge.
Fuselage and wing components for Airbus that are manufactured by Spirit AeroSystems at the Global Transpark in Kinston, N.C., are shipped through Morehead City.
Rubber for tire manufacturers such as Goodyear and Bridgestone also remains a major cargo imported through the port.
