When the South Carolina Ports Authority broke ground for an inland port at Greer, S.C., it implemented a strategy that was based upon securing an anchor tenant and linking that exporter to the Port of Charleston with multi-modal transportation options that include short-haul rail.
Developing a port-dependent inland facility can not be a “build it and they will come” venture. The port would not have moved forward with the project unless it was guaranteed base cargo from BMW and an efficient double-stack rail link to the seaport, said Jim Newsome, president and CEO of the port authority.
Working with Norfolk Southern Railway to provide overnight intermodal rail service to the port, 212 miles from Greer, was the clincher. “If it were three or four days’ transit, it wouldn’t work,” Newsome told the Journal of Commerce’s Inland Distribution conference in Kansas City.
The traditional concept of an inland port is a large rail-served hub that is located deep in the interior of country. Chicago, Dallas, Kansas City and Memphis are prime examples. They are located more than 1,000 miles from the West and East Coasts, and that is the distance at which intermodal rail is most competitive.
Greer is well within a day’s truck haul from Charleston. However, the port wanted to have an operation that benefitted truckers as well as the NS. The Port of Charleston views Greer as a logical extension of its operations into a “tapestry of exporters” in the region, whereas truckers gain new opportunities for draying containers on either end of the rail move, Newsome said.
“The trucking community could have fought us, but they bought into the idea,” he said.
The intermodal rail link will remove 25,000 trucks from the road between Greer and Charleston, which contributes to the project’s sustainability.
Greer will also test the limits as to how short a distance can be served by intermodal rail. Although eastern railroads have demonstrated that they can make a profit in intermodal lanes of about 500 miles, Greer is less than half that distance.
Norfolk Southern expects to make this short distance work by eliminating unproductive miles while generating large intermodal volumes. “Density makes the short haul work,” said Edward Elkins, director of international marketing at NS.
Yet another unconventional aspect of the venture is that NS negotiated its intermodal contract directly with BMW. Intermodal contracts are normally worked out between the railroad and the ocean carrier.
For BMW, connectivity to the seaport was crucial because the company will export a significant percentage of the cars it manufactures in nearby Spartanburg, S.C., to markets in Asia, Europe and Latin America. BMW does not confine its production to serving the U.S. market. “We are making our cars for the world,” said Alfred Haas, department manager, material and transportation control.
BMW will deviate from the traditional method as to how finished cars are shipped. Rather than shipping fully assembled automobiles on car carriers, BMW will ship knocked-down cars in crates, and the autos will be reassembled at the destination. This will allow BMW to penetrate emerging markets such as Russia and India.
Russia insisted that the cars be assembled in that country, and India also imposed a number of restrictions on BMW, so the knocked-down method allowed BMW to sell into those growing markets, Haas said.
When the Greer inland port opens next month, Newsome sees opportunities for attracting a variety of importers and exporters. Transloading of agricultural products into marine containers is a logical target, as is e-commerce fulfillment. Greer is located close to the Greenville-Spartanburg InternationalAirport, and courier services by UPS and Federal Express are an important component of e-commerce fulfillment, Newsome noted.