Savannah intermodal surges as rail work pushes ahead

Savannah intermodal surges as rail work pushes ahead

Ongoing construction in Savannah shows dirt where new tracks will be laid to service Norfolk Southern Railway and an adjacent gravel lot for chassis. Photo credit: Georgia Ports Authority.

A project to double Savannah’s intermodal capacity is 40 percent complete, according to the Georgia Ports Authority, as fresh data shows recent double-digit intermodal gains at the second-largest port along the US East Coast.

The port authority said the $218 million project will cut 24 hours off transit times by eliminating multi-day container dwells, while providing an attractive alternative to the West Coast for beneficial cargo owners (BCOs) in Memphis and Chicago. Once aboard a train, it’s 60 hours to Memphis and 96 hours to Chicago, a number Georgia Ports Authority CEO Griff Lynch would like to lower.

Even with a four-day transit to Chicago, intermodal volume at Savannah rose nearly 11 percent year over year in July, to 47,225 rail lifts. Total volume grew 2.2 percent to 387,024 TEU. 

The port lifted 507,000 containers in fiscal year 2019, up 16 percent from the prior year. It marked the second consecutive fiscal year with more than 15 percent growth. Rail volume has grown 35 percent in the previous three years. 

Signs point toward more rail volume as new Asian routes visit the East Coast to avoid congestion in Los Angeles and Long Beach. 

About 20 percent of containers moving via Savannah are loaded directly to and from trains, Lynch said, adding he doesn’t expect that share to rise beyond 25 percent. That doesn’t account for imported goods that are transloaded from marine containers to 53-foot domestic containers or trailers, and commodities railed via bulk train services and then stuffed into marine containers. 

Work due to be completed next year

Photo credit: Georgia Ports Authority.

Phase 1 of the so-called Mega Rail project will create new space for Norfolk Southern Railway to build 10,000-foot trains on site. The work should be complete in early 2020 with a small delay in construction and delivery of rail-mounted gantry cranes. Phase 2 will create an adjacent space for CSX Transportation, with that due to be completed at the end of next year.

Three bridges were built over the Pipemakers Canal this year near Georgia Route 307. That will provide Norfolk Southern and CSX two options to enter and exit the rail yard with simultaneous inbound and outbound trains. A new chassis yard to be built should accommodate the growth of the chassis pool in Savannah, according to Lynch.

What does this mean for BCOs?

Lynch said the Mega Rail terminal will be an attractive connection with the mid-South and Midwest, called the Mid-America Arc, an area that includes Memphis, St. Louis, Chicago, and Columbus, Ohio, and smaller offshoots such as Louisville and Nashville.

“In the past, we didn’t have the on-dock rail facilities to serve our needs. Our on-terminal component is the first part, we also need to develop the connectivity into the hinterlands. We need the railroads to step up to the plate to provide that,” Lynch said.

A freight coalition in St. Louis announced earlier this year it would study the feasibility of a Savannah connection, but there is no existing route. Columbus is also a difficult sell because it’s much closer to New York and New Jersey.

Chicago and Memphis are the main focal points because they are large intermodal hubs. Lynch views the ports of Los Angeles and Long Beach as competitors in these markets. 

“We’re not competing against Virginia and New York because most of their rail business is coming from Suez Canal service, not Panama Canal-based services,” he said. “We couldn’t compete on a Suez route. If a [Panama Canal string] docks in Savannah and is on a train the next day, the container is halfway to Chicago before the vessel reaches the next port.”

To compete in the long term, the Georgia Ports Authority must transfer containers between the vessel and train within 24 hours. Railroads must also provide faster service to Memphis and Chicago. If that can be accomplished at a competitive all-in rate, then BCOs will consider the Savannah alternative.

Contact Ari Ashe at ari.ashe@ihsmarkit.com and follow him on Twitter: @arijashe.