Friday, April 20, 2007

CSX Follows NS With CMH Investment

This article appeared in the Columbus Dispatch this morning. Check out the investment numbers and also the amount of warehouse&distribution space currently in the Columbus area...along with the growth estimates. The question for me is this...Where are we going to get the people to staff these facilities?
Have a great weekend!


Each morning, dozens of steel truck trailers filled with goods arrive on flatbed rail cars at the CSX intermodal terminal on the West Side.

One by one, the trailers are hoisted off the track and onto truck chassis by a side loader. Semi tractors then hitch up to the trailers and carry the goods to their final destinations.

Scott Movshin, who manages the operation at 2351 Westbelt Dr., looks up at one 40-foot steel box as it is wiggled into place.

"Retail goods, production parts for appliances, auto parts, you name it. How’s it all getting there? In these boxes."

CSX has a grand plan for these containers, one that local business advocates say will bolster central Ohio’s already strong position as a distribution hub. CSX wants to close its overloaded West Side terminal and build a $113 million facility at its South Side rail yard, a "port" of sorts that the company says will reopen long-closed rail links and enhance others.

CSX says the plan, being hammered out at the company’s Jacksonville, Fla., headquarters, would create hundreds of jobs at its rail yard and at spin-off businesses taking advantage of the increase in distribution activity.

Columbus businesses and the Ohio Rail Development Commission are backing the idea, helping the railroad tap federal and state dollars to make it happen. CSX spokesman Dan Murphy said the cost is unknown, although the company last year asked ODOT for $43 million.

That request of ODOT’s Transportation Review Advisory Council was denied. Now, the railroad is preparing a terminal-layout plan showing how the project might be financed.

The terminal construction would require paving about 80 percent of its 136-acre compound near the southeast corner of Groveport Road and Parsons Avenue. CSX would move Sills Park, a 23-acre ball-field complex run by the Columbus Recreation and Parks Department.

"It could be a really big project," said John Ness, president of ODW Logistics, 1580 Williams Rd., near the CSX rail yard. "It’s good for the city to try to revitalize the south end of town."

Ness thinks the CSX facility, similar in concept to Norfolk Southern’s 300-acre intermodal facility near Rickenbacker Airport, would solidify the city’s reputation as an international distribution center.

At intermodal yards, shipping containers can be moved back and forth from railroad cars to tractor-trailer trucks.

"We compete with Indianapolis in logistics, and they’ve got a significant FedEx hub at their airport that has no equivalent in Columbus," Ness said. "If we have a new intermodal yard, with Norfolk Southern and CSX, we can service much more of the New York and New Jersey market and the (Florida) market."

Those areas include major ports through which many overseas goods enter the country.

Central Ohio is a major player in the distribution industry. There are 35 million square feet of industrial development under roof in the Rickenbacker area. The Columbus Regional Airport Authority said that space could double in the future as rail yards are expanded and improved.

The Norfolk Southern yard would create an estimated 20,000 jobs, the authority said.

And last year, the Marion Intermodal Center opened, increasing distribution between that city and Kansas City, Mo. The center is a collaboration involving Schneider National trucking company, CSX Intermodal and the Kansas City Southern railroad.

Columbus officials are expecting job growth to come from the CSX yard because it would be so much bigger than the current one. Movshin said it would be busier simply because it would have more rail lines.

Movshin said there would be little comparison between the company’s current rail yard and the one it’s planning. The West Side facility is on 16.5 acres and handles about 125,000 loads per year. Cargo can be loaded only from the track that abuts the paved yard. There are only two lines at the West Side facility, and they’re not long enough to keep up with demand, Movshin said.

The new yard would be designed to handle 500,000 loads annually, opening it up to CSX markets in Florida and to Portsmouth, Va. Movshin said it also would increase the railroad’s business between New York and Columbus.

"We’re over capacity (on the West Side)," he said. "We need to construct a large facility in Columbus to handle demand."

The Ohio Rail Development Commission is sponsoring the concept for CSX. The Columbus Chamber is backing the idea, as is the Columbus-Franklin County Finance Authority.

The rail commission has been trying to identify state or federal funding sources for the project, Assistant Director Matthew Dietrich said.

"This is a huge project," Dietrich said. "If we can’t bite the whole apple at once, how can we phase it in? "

CSX’s plans come during a railroad renaissance. Demand for railroad traffic is increasing as gasoline prices continue to rise, highways become overcrowded and freight volumes increase.

"We have to invest to stay ahead of demand in global shipping," CSX lobbyist Nick Zimmers said. "In the past, railroads basically went their own way when it came to financing infrastructure projects."

The trend is not lost on investors: Warren Buffett’s Berkshire Hathaway recently filed with the Securities and Exchange Commission to buy nearly 11 percent of Burlington Northern Santa Fe, one of the country’s two major railroads west of the Mississippi River.

CSX also plans to expand operations in northwestern Ohio, Florida, Georgia and Pennsylvania.

Movshin and others at CSX say it’s time to strike now.

"If you’re not in position now, you’re too late," Movshin said. "That’s the position all railroads are taking."

3 Comments:

Blogger Eric said...

Nice article Michael. I suspect that the folks that will work at those warehouses will speak spanish... seems to be a never ending supply of new friends from south of the border.

Eric

12:03  
Anonymous Jim Durbin said...

Michael,

I was looking through blogs for a client of mine who offers export documents and came upon your site. I was curious about links in your blogroll for their website, http://documentsforexports.com, or other ways we could work together to promote the sites. Sorry to leave a comment here, but I couldn't find an e-mail. Jim. jdurbin@durbinmedia.com

16:16  
Anonymous Ted Lapatka said...

If the domestic transportation industry in the lower 48 states spent 1 billion dollars on improved software for the transporation industy, what are the benefits and as the improvements come up the pike how does it help the world supply chain. I think our own supply and transportation chain could have used a billion dollar shot in the arm rather than a pocket full of dollars in software company bank accounts. With the average software package at 25K to 250K , that means that 7,299,270 packages were sold to some one. I think that the best bet would be to buy stock in UPS or FEDX to reap a bennefit from that influx of cash into the transportation section of the market place.

01:53  

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