Former Army Arsenal Reborn as BNSF Freight Hub
This story appears in the July 30 print edition of Transport Topics
TRUCK-RAIL INTERMODAL, PART I: Truck-rail intermodal freight transportation continues to grow in importance, moving ever-larger volumes of cargo across North America.
During a visit last month to metropolitan Chicago, Associate News Editor Jonathan S. Reiskin witnessed for Transport Topics two examples of how trucks and trains combine to move freight headed for U.S. businesses and consumers.
ELWOOD, Ill. — In an unceasing torrent they come, 20- and 40-foot corrugated steel shipping containers from the Far East, filled with manufactured goods, to this landlocked port on Lincoln’s prairie.
What was once part of the Army’s Joliet Arsenal is now Burlington Northern Santa Fe Railway Co.’s Logistics Park Chicago, a 1,000-acre site the railroad uses for bringing containers to the Great Lakes/Midwest region so freight can begin the truck-borne portion of its distribution.
“We’re a pipeline for inventory. It’s not as urgent as the trailer traffic that needs to move as scheduled,” said Michael Utterback, senior manager of intermodal hub operations at LPC and a former manager at the BNSF-Hodgkins site that deals with express-intermodal for trailers on flatcars.
While lifting 727,000 containers onto or off of trains last year, Utterback and the roughly 750 who work on intermodal at LPC had room to stretch.
“This is pretty unusual for our [BNSF’s] facilities. Most intermodal facilities were built in old rail yards that are 50, 60 or even 75 years old, but this was built in a green field.
“It’s more like an ocean port than an inland intermodal facility,” he said.
That means the crews of subcontractors who are most of the workers at LPC can work 8,000-foot, double-stack trains in a continuous stretch without having to break them into 4,000- or 5,000-foot segments.
There’s also plenty of room for storage at LPC, which opened in 2002. Utterback said he can stack 6,000 containers on the ground and still park 5,200 containers on chassis.
Also, the real estate developer that put together the Elwood project said it is developing 33 acres for overflow trailer storage, or containers on chassis, but not stacked containers.
Partners Warehouse had kept its main facility near Hodgkins, a Cook County suburb of Chicago, but followed BNSF down the Des Plaines River in 2002 to Will County and opened a 300,000-square-foot facility there.
“The railroads are clearly pushing cans [containers] here rather than the city,” said Tom Wagner, who owned Partners until 2003 and is still vice president for sales and marketing.
Wagner said he started looking for new headquarters in 2001 because BNSF was trying to dedicate Hodgkins to its premium intermodal-express service.
Craig Sesemann, who bought Partners from Wagner and is now the company’s president, said he gets both boxcar and intermodal drops from BNSF daily.
“We usually handle 28 boxcars a day inbound, enough to fill 100 truckloads outbound. This has triple tracks and 14 doors for boxcars, whereas our place in Hodgkins was single-tracked, with 11 doors,” said Sesemann, who runs three other warehouses in Illinois and one in Wisconsin.
Partners stores and then arranges to transport a wide variety of products, including ketchup from Ohio that must move to Los Angeles and apples from Washington state headed for Cleveland. The company also stores steel rods, water-softening chemicals, the clay-based industrial compound bentonite, table salt, bolts of paper and high-grade New Zealand plywood and other lumber.
Partners also works with canned food and other consumer products, doing pick-and-pack work for the Jewel-Osco grocery chain.
A benefit for drivers of the increased size of the facility is that trailers can back all the way into the warehouse to load or unload. Sesemann said this capacity can be particularly desirable for flatbed drivers when the weather is bad because they can tarp their loads indoors before driving out.
Other shippers with warehouse space near LPC include Potlatch Corp., Sanyo Logistics, Georgia Pacific, DSC Logistics and Wal-Mart Stores, which has two buildings that cover a combined 3.4 million square feet.
According to CenterPoint Properties, Oak Brook, Ill., which developed the site, and articles published in the Chicago Tribune, the Army closed the 25,000-acre arsenal in 1976 and sold more than 2,000 acres of it to CenterPoint in 1999. The federal government retained most of the site, though, turning 19,000 acres into the Midewin Tallgrass Prairie National Park.
Another 1,000 acres went to the Department of Veterans Affairs for Abraham Lincoln National Cemetery.
BNSF’s 1,000 acres come from CenterPoint’s portion. The railroad uses 309 acres for intermodal, 106 acres for transporting cars and light trucks and 106 acres for other purposes and then keeps 441 acres undeveloped — for now.
What BNSF’s Utterback called a “green field” was once a “brownfield” for CenterPoint. Eric Gilbert, a vice president of development for CenterPoint, said that is one of his company’s main tasks as a developer.
“Our specialty is taking ‘brownfield’ Superfund sites and redeveloping them. At Elwood, we coordinated through the Environmental Protection Agency, and the governor’s office in Springfield played a critical role, too.
“As an arsenal, this place had several thousand jobs in its heyday. Then people were laid off; it was an environmental mess. There were no taxes, no jobs, and it was an eyesore.
“Now it’s an economic engine for Will County and all of the Chicago area,” Gilbert said.
On July 9, CenterPoint an-nounced plans to develop another intermodal facility near Kansas City, Mo., in conjunction with Kansas City Southern Railway Co. The fifth-largest U.S. railroad, K.C. Southern also has been telling investors of its plan to increase its intermodal business by hauling containers out of a terminal being built in Lazaro Cardenas, a Mexican port on the Pacific Ocean.
CSX Transportation also is increasing its stake in intermodal transportation and is scheduled to open a new facility in Chambersburg, Pa., in September.
Gilbert said CenterPoint took advantage of several tax arrangements to help finance the development of the Elwood site. Of particular importance, he said, was a TIF, or tax-increment financing plan.
Over the program’s 23-year life span, CenterPoint can dedicate a portion of its state and local property-tax payments to paying off some of the debt it incurred to develop Elwood.
The development also has foreign trade zone status, which means goods imported through West Coast ports do not have to pay customs duties until they depart the zone. This policy delays but does not eliminate the duty fees.
The third governmental in-ducement Gilbert described was status as an Enterprise Zone. That means Illinois waives its entitlement to collect sales taxes on construction materials for the site.
For Utterback, though, his concern is managing the daily deluge for BNSF. LPC is enlarging its main entrance to 11 lanes from six at the end of this month.
The railroad is also installing optical character readers and cameras to keep track of containers as they enter or leave. That cuts down on the need for people at the gate to keep records.
LPC operates seven days a week. Just before the visit by Transport Topics, Utterback said hub personnel lifted 1,400 inbound containers on one day and 1,600 on another and that they usually come in at a rate of 300 containers to a train.
Two people handle the job, with the assistance of MiJack cranes that cost $1.25 million each.
Beyond its 727,000 lifts last year, the current capacity at LPC is 1 million a year, with September and October as the peak season, although March is also quite busy. Capacity expansion is planned for 1.5 million lifts, Utterback said.
Yard tractors equipped with hydraulic fifth wheels roll across the main roadway, a 23-inch slab of reinforced concrete.
“This place was built with the idea that shippers would come later, and they have,” he said.
Next week, TT reports on the BNSF facility in Hodgkins, Ill., where the railroad runs an express train of domestic trailers on flatcars for UPS Inc., less-than-truckload and truckload carriers, and other shippers.
