The $30 million Heartland Intermodal Gateway has generated little income.
West Virginia may look to sell an intermodal port that it developed but has failed to generate the expected level of freight volumes.
The state’s port authority developed the Heartland Intermodal Gateway, a $30 million project funded by state and federal government grants. Earlier this month, the authority voted to allow the facility to seek a short-term lease.
The move comes as the state’s budget reduced funding for the port authority. The West Virginia Department of Transportation said the facility, which cost $500,000 per year to operate, generated little income.
According to West Virginia’s MetroNews, Transportation Secretary Byrd White said the facility “never got the volume it needed to sustain itself.” The short-term lease is an interim solution until the state decides whether it wants to sell the facility.
The 100-acre site, which opened in December 2015, is a truck and rail transfer facility for intermodal service between the Port of Virginia and Chicago, with connecting service to U.S. West Coast ports. Toyota’s Buffalo plant in West Virginia is one of the shippers that utilizes the HIG.
The terminal is part of Norfolk Southern’s Heartland Corridor Service, which links the Port of Norfolk to Ohio, Indiana and Illinois.
After growing through much of 2018, Norfolk Southern’s intermodal volumes dropped through much of the first half of 2019 as freight activity slowed. In June, the average weekly number of intermodal cars online fell just over 2% from a year earlier to 10,375.
West Virginia’s decision to get out of the intermodal freight business comes as other states look to develop inland ports to bring freight volumes to their seaports. The Port Authority of New York and New Jersey is looking into developing inland ports as part of its 50-year master plan. The Georgia Ports Authority is developing an inland port in Gainesville in the northeastern part of the state.
In a feasibility study, West Virginia’s port authority saw HIG as a less expensive option for moving containers to locations within the state as compared to an all-truck service or a rail and drayage move through the Rickenbacker intermodal terminal in Columbus, Ohio.
But the cost advantage for moving containers to the all-important intermodal hub in Chicago was more marginal. In some instances, moving containers through Rickenbacker or another intermodal hub in Georgetown, Ky., was the less expensive option.