Tuesday, January 23, 2007

Ok, so the drinks are on Memphis then!

The completion of the Fairview Container can’t happen soon enough for the folks in Tennessee.

The Fairview Port continues to garner its fair share of attention as Memphis prepares to be CN’s hub of the south. A project that seems to be providing as many positive vibes in the southern US as it does in Canada's Pacific North West.

Like Prince Rupert, the folks in Memphis have their own project under construction, an inland container port that will herald the resurgence of the rail industry in the southern US state and the arrival of containers from a variety of locations.

One of which is Prince Rupert, from which Memphis expects to see a lot of container traffic from.

Memphis may very well soon be one of the few American cities that knows anything about life above the 49th, they’re certainly taking an interest in the impact that Prince Rupert will have on them, as the following item from the Memphis Daily News shows.

Logistics & Distribution
New Canadian Rail Route Promises More Loot for Memphis
The Daily News
January 23, 2007

Business moving from the United States to other countries isn't pleasant news for local economies. But when freight begins moving to Canada instead of Long Beach, Calif., it will be music to the ears of many Memphians.

Goods coming in from Asia often arrive in Long Beach. But when the Port of Prince Rupert Container Terminal in northern British Columbia opens later this year, it will mean more business for Memphis.

A quick look at a map tells why.

Canadian National railroad goes east-west across Canada. In the center, it branches south, creating a Y of sorts. At the west end of that Y is Prince Rupert. And at the center of the southern leg is Memphis.

"The Prince Rupert project is going to open a lot of new opportunities for us," said Dexter Muller, senior vice president of community development for the Memphis Regional Chamber. "You can bypass Long Beach by going to Prince Rupert and then come down through and bypass Chicago and come straight to Memphis. It opens a big opportunity for us to get a considerable amount of traffic from the West Coast."

Time on a dime

Muller estimates that Prince Rupert is two days closer to Asia than Long Beach. CN officials estimate sailing time from Asia could be reduced by as much as 58 hours.

"A lot of cities are looking for alternatives to coming through Long Beach and one is Prince Rupert," Muller said. "Basically, (CN) has made a major commitment to Memphis."

A big part of that commitment is the Frank C. Pidgeon Industrial Park just south of Downtown.
Originally envisioned as a Super Terminal serving all five Class 1 railroads in Memphis, the facility has five rail lines and two intermodal ramps - one each for CN and CSX Corp.
Other news has been circulating that could signal a resurgence in rail use in Memphis.

BNSF Railway Co. announced last month it is reintroducing international intermodal container service from the Pacific Northwest to Memphis. BNSF announced a $40 million expansion in August 2005, proposing to double its capacity to nearly 400,000 containers.

"The Prince Rupert project is going to open a lot of new opportunities for us. ... It opens a big opportunity for us to get a considerable amount of traffic from the West Coast."

- Dexter Muller
Senior vice president of community development for the Memphis Regional Chamber
And in October, BNSF and CSX announced plans to create a high-volume rail corridor for intermodal services on the lines connecting California, Atlanta and the Southeast.

BNSF announced it would expand capacity on its rail lines connecting Avard, Okla., Memphis and Birmingham. The agreement also allows for continued interline rail service between Memphis and Florida.

Supply chain contained

This resurgence has been years in the making, but Muller can remember when it wasn't even on the radar screen.

Muller, who began working in economic development in 1988 in Memphis, couldn't recall working on a project in those early years in which railroads made much of a difference.
Rail users then primarily were manufacturing operations bringing in bulk items such as coal, steel, chemicals and raw materials.

"The big thing that has caused a resurgence that I see is the use of containers," Muller said. "As the manufacturing was moved offshore, that meant the finished products came back to the U.S. from Europe and more recently from Asia, and they're coming back into the U.S. in containers."
The biggest port, Muller said, is Long Beach, where it is economical to place the containers on trains and move them east.

"That's been the biggest shift," he said. "If you look at what's in a general merchandise store, probably 70 percent or more comes from Asia. That means containers are bringing those."
And they're arriving here in Memphis.

Even more containers will arrive in Memphis in coming years thanks to an expansion of the Panama Canal. Currently the largest ship that can travel through the canal can carry about 4,500 containers.

But when an expansion is complete in the next 10 years, the new container ships will hold more than 12,000, tripling capacity.

Ports in Mobile, Ala., and New Orleans, not to mention eastern ports in Savannah, Ga., and Norfolk, Va., will receive more containers from Asia via the expanded canal.

That will affect Memphis, as many of the eastern railroads transport freight from the East Coast to the Mississippi River and cities such as Memphis, St. Louis and Chicago. Those cities are also the end of the line for freight coming from the West.

"Memphis, St. Louis and Chicago are at the nexis of that," Muller said. "Chicago is still probably No. 1, but they are experiencing a lot of congestion. So what we're experiencing is Memphis is the ideal location."

The 'hub' in Hub City

And as containers arrive in Memphis, the contents quickly can be broken down, placed on trucks and moved quickly to many locations throughout the country.

"From Memphis you can reach more of the top 100 metro markets by truck in one day's drive than any other city in the country," Muller said. "That makes us a great place to bring by rail and then distribute by truck. That's why in the last 10 years, much larger warehouses are being built, not only in Memphis, but other key cities in the central U.S."

Interest in Memphis in general and the Frank C. Pidgeon Industrial Park in particular hasn't hit a fever pitch yet.

But it will.

"The opportunities for us we believe to be great," Muller said. "We can now go out and recruit companies. We have a magazine called Hub. We're putting together an economic development team working with CN and the Port of Memphis ... on marketing strategy so we can then draw those companies.

"We haven't seen interest yet because (Frank C. Pidgeon) is still under construction. What we're doing is getting the message out so when it's open they can take advantage of it."

No comments: