Friday, July 24, 2009

Memphis logistics industry embraces NS expansion

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Although Norfolk Southern Corp.’s planned $129-million intermodal yard won’t be built within the city limits but instead in neighboring Rossville, Memphis’ logistics and distribution industries stand to benefit from the railroad’s decision to expand its local presence, The Daily News in Memphis reports. Not only is the railroad’s sprawling facility dubbed the Memphis Regional Intermodal Terminal, but it will be close enough for Memphis-based companies to gain unprecedented logistical access to eastern cities.

“It will essentially rebuild the supply chain from Memphis and the Gulf Coast up to Philadelphia, New York and New Jersey and eventually on to New England,” Norfolk Southern CEO Wick Moorman said during last week’s event announcing the company’s site selection.

The facility, which is scheduled for completion in January 2012, will serve as an anchor for Norfolk Southern’s “Crescent Corridor,” a $2.5-billion, 2,500-mile rail network designed to take a million trucks off roads that don’t have significant rail parallels, including Interstates 40 and 81. In Tennessee, that could remove 573,000 trucks from local highways and provide 5,000 jobs, a couple of projections that helped win over Gov. Phil Bredesen, who also spoke during last week’s soiree at the Bank of Fayette County in Piperton.

The prospects excite Anne McMahon-Thielemier, the Memphis-based market manager for intermodal marketing for Norfolk Southern. She said the railroad is eager to begin accommodating companies’ shipping and distribution needs with this new intermodal terminal, where cargo containers are transferred between trucks and trains. The company’s current operation at Forrest Yard near the Mid-South Fairgrounds is only 50 acres and has restricted capacity. The new terminal, more than 10 times that size, will be able to handle more than 327,000 containers and trailers annually with a paved area to park 2,177 trailers and containers mounted on chasses.

“It’s like Disneyworld for intermodal facilities. My ops guys are thrilled,”
McMahon-Thielemier said. “We’re going to offer so much more and it’s going to be truck competitive. That’s our goal – to get those trucks off the highway. Now that we have this facility in Memphis, we can accommodate.”

Michael McClellan, the railroad’s vice president of intermodal and automotive marketing, said the Memphis terminal will be one of the largest in the railroad’s network. That’s important because an expansive footprint allows Norfolk Southern to operate more efficiently.

Getting trains to the yard, however, is one of the issues that remain unresolved. The railroad will build a spur from its main rail line – which runs parallel with Tenn. 57 – south to the terminal, but an overpass needs to be built so the spur can travel underneath the highway. Tennessee Department of Transportation Commissioner Gerald Nicely wasn’t ready to comment specifically on that project, but he reiterated the state’s “commitment to Norfolk Southern and to the governor to make this project work. “We’ll do all we need to do.”

The new terminal and the addition of rail traffic in the eastern U.S. also helps the railroad “green” the transportation industry with more trains, which use one-third the amount of fuel required by long-haul trucks.

Norfolk Southern’s multimillion-dollar commitment helps the greater Memphis area – one of just three cities in the nation with five Class I railroads – burnish its status as an intermodal nexus. Union Pacific has a relatively new intermodal terminal in nearby Marion, Ark.; Canadian National Railway Co. and CSX Intermodal operate a joint intermodal yard at Frank C. Pidgeon Industrial Park near Downtown Memphis; and BNSF is almost finished with its $200-million expansion of its Southeast Memphis yard.

Dexter Muller, senior vice president for community development at the chamber and head of the logistics council, said yet another railroad boosting its intermodal presence bodes well for the city’s place in a global economy.

“The investments (Norfolk Southern is) making here make us strong for the future,” Muller said. “The vision they have has Memphis playing a prominent role.”
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