Maersk Line and CSX Transportation signed a contract for the railroad to haul the Danish ocean carrier’s discretionary cargo from APM terminal in Portsmouth, Va., to the Midwest.
The contract, starting next year, is a major coup for the Jacksonville, Fla.-based railroad in that it has snatched a major piece of business in the backyard of its rival Norfolk Southern Railway. Mediterranean Shipping Co., and CMA CGM, which also use the APM terminal are also likely to switch to CSX from NS, but their intentions could not be confirmed.
“CSX has been CMA's primary East Coast rail supplier for years and remains the same,” said Frank Baragona, president of CMA CGM (America).
MSC (USA) Executive Vice President Allen Clifford said, “We have been using CSX Rail for years and intend to continue to utilize their good service.”
Under the new contract, CSX will haul cargo from the terminal to its new $175 million intermodal hub near North Baltimore, Ohio, which will serve the region’s heavy industrial shippers. The changeover is part of the Virginia Port Authority's attempt to reach new markets by extending rail service to new regions in the Southeast and the Midwest.
Norfolk Southern started a new rail service from the Norfolk International Terminal to Greensboro, N.C. that will open up that market to exports by furniture, textile and agricultural shippers in the region. Two ocean carriers have already signed up to use the new service for exports.
“We’re going to better align our terminals with our carriers,” said VPA spokesman Joe Harris. “The NS heavy carriers are going to call at NIT, and the CSX heavy carriers are going to call at APM. It will reduce the number of dray moves we have to make between the two terminals and will be a savings for us.”
Maersk’s changeover, which was confirmed by a CSX executive who asked not to be identified, will take place in early 2012 when Commonwealth Railway, a subsidiary of Genesee & Wyoming, completes work on the track connecting a rail terminal near the APM terminal in Portsmouth with the rail terminal at the nearby Portsmouth Marine Terminal, which is served by CSX.
Timothy Simpson, a spokesman for Maersk, declined to comment on whether the deal with CSX was exclusive. He said Maersk would be informing its customers of the move on Nov. 1.