Railroad Seeks Faster, Cheaper Route Between Great Lakes, Virginia Port

By Rip Watson, Senior Reporter

This story appears in the June 16 print edition of Transport Topics.

BELSPRING, Va. — Inside Norfolk Southern Railway’s Cowan Tunnel at the foot of Virginia’s Blue Ridge Mountains, the latest intermodal ad-vancement is moving forward — 4 feet at a time.

Two hundred times a minute, dozens of rotating carbide-tipped teeth on a “road header” machine steadily chew out the 3,302-foot tunnel’s concrete roof, raining 50 tons of debris a day onto the tracks 19 feet, 6 inches below. The force is powerful enough to make 30-ton freight cars sway, leaving barely two feet of room for a Transport Topics reporter to see the largest of 28 tunnel improvement projects firsthand.

The goal: Add 12 inches to the 93-year-old tunnel’s height so double-stacked intermodal containers will have room to roll through while moving international freight faster and cheaper through Virginia’s ports to the Ohio Valley, Chicago and Detroit.

The $249 million Heartland Corridor, due for completion in early 2010, is the biggest U.S. rail clearance project and the only fully funded public-private partnership to increase freight capacity. Propelling the project is a change in global commerce as shipping lines move more freight to East Coast ports and push for new, more economical ways to reach Midwest distribution hubs, such as Columbus, Ohio.

“The Heartland Corridor project is primarily driven by capacity increases that will be gained to take advantage of that increasing shift of business to the East Coast from West Coast ports,” said Jeff Heller, Norfolk Southern’s assistant vice president of intermodal.

Over the past five years, cargo volume has risen 45% at Virginia ports as more cargo travels through the Panama Canal instead of being unloaded at a West Coast port.

Norfolk Southern has reaped the benefits of that shift as 50% of its international rail/truck business moves through East Coast ports, compared with 30% in the past.

Opening the Heartland Corridor double-stack route should eventually double the railroad’s current intermodal volume of 300,000 loads a year in the Norfolk area, Heller said.

Ted Prince, chairman of the Intermodal Association of North America, said opening the corridor creates a second direct double-stack route for Midwest-bound international cargo that mostly moves through New York today. While New York is the biggest market and largest East Coast port, Prince said the Virginia ports can boast about the advantages of lower terminal costs and deeper channels that can handle larger, more cost-effective vessels.

“We have ocean freight moving to the East Coast from India and Sri Lanka primarily, as well as Israel and Europe, but we terminate in the Port of New York/New Jersey because it is the first port of call, producing the shortest transits into Columbus,” said Mike Sherman, senior vice president of transportation and logistics for the Limited Brands, one of the world’s largest retailers. “If the expanded capability of the Heartland Corridor encouraged increased use of Norfolk as a first port of call, we would then be quite interested in those services.”

When the clearance project is done, tens of thousands of import and export loads that are hauled today solely by truck between Virginia ports and the Ohio Valley could potentially switch to lower-cost intermodal, Prince said.

A study done by Marshall University, Huntington, W.Va., estimated a 45% cost reduction when double-stack trains replace single-level service on the Heartland Corridor route.

Mike McClellan, vice president of intermodal and automotive marketing for the railroad, made no secret of Norfolk Southern’s intentions.

“We have been hampered by our ability to price against trucking,” he said. “The real win for the Norfolk-Columbus route is that we can invoke the economics of double-stack. Our intent is to be sure we are competitive against over-the-road trucking.”

He wouldn’t say how much business the railroad expects to attract or how much rates will be lowered when the double-stack service is introduced.

“There is a potential for this project to have an impact on truckers,” said Dale Bennett, executive vice president of the Virginia Trucking Association. “When it comes to that sort of competition, it all boils down to being able to provide the service that the shippers need at the price they want to pay.”

Though additional shipping by double-stack train might wind up hurting some fleets, drayage carriers serving Ohio are eager for the project to be done.

“We’ll have the opportunity to pick up some business that we don’t enjoy today” in the Columbus area, said Val Noel, president of Pacer Cartage, which is part of Pacer International Inc.

Norfolk Southern expects volume to triple in Columbus after a new rail terminal was opened there in March. The rail terminal, covering 175 acres, is part of the 1,300-acre Rickenbacker Global Logistics Park that also includes trucking, warehouse and air freight facilities, eventually offering a full menu of supply chain and warehousing services.

“The Heartland Corridor is going to bring a lot of opportunities for the type of drayage we provide,” said Richard Coleman, president of ContainerPort Group of Cleveland, which primarily is a shorthaul trucking operator. “It will help international trade into and out of the region. I see a positive impact on the whole supply chain.”

“The continuing increases in both fuel prices and congestion on the nation’s highways will make rail investment all the more needed and attractive,” said Sherman, whose company is based in Columbus.

Other public-private ventures are in the works.

CSX Corp., Norfolk Southern’s rail rival, unveiled its National Gateway proposal for public-private cooperation two months ago. CSX, offering $300 million of its own money and seeking $400 million in public funds, wants to create double-stack service on several routes, including one between Virginia and the Midwest to rival the Heartland Corridor.

“From a strategy standpoint, [the National Gateway plan] is almost a mandatory competitive response for CSX,” Coleman said.

However, as the CSX project unfolds, the company is at least four years behind Norfolk Southern. CSX, which expects to finish its project in 2015, intends to begin work later this year on the first phase, an intermodal terminal in northwest Ohio, spokesman Robert Sullivan said.

An even larger public-private plan is the 10-year, $1.5 billion project in Chicago called CREATE, which has been slowed by a lack of funding. Freight railroads that operate in Chicago, including CSX and Norfolk Southern, have pledged $100 million to help fund projects that are supposed to speed both train and highway traffic. To date, just two of 78 projects have been completed for that program, first proposed five years ago.

The Heartland Corridor project has advanced on a far faster timetable. It was pulled together and announced in 2004 after a series of meetings between government agencies and the railroad, and a portion of the cost was provided from 2005 federal transportation funding legislation.

Norfolk Southern’s share is between $85 million and $90 million of the $249 million, railroad spokesman Robin Chapman said. The U.S. Department of Transportation is picking up about half of the tab, including $30 million for the freight terminal in Columbus.

Ohio, Virginia and West Virginia have contributed the remaining $38 million for clearance improvements and new terminals.

IANA’s Prince supports the public-private approach.

“It’s a good model,” he said. “It’s always replicable. The issue is that there is no ‘one-size-fits-all’ approach. You’re better off recognizing that regions have different geographies and requirements. You have to find the one that all stakeholders find acceptable. This [Heartland Corridor] was a regional solution, and that was a good thing.”

McClellan, of Norfolk Southern, sees more direct routing of freight between Norfolk and Chicago, as well as Detroit, as a benefit the project offers.

Shipping lines can use double-stack service now between those cities, but the route is up to 200 miles longer because of the clearance obstacles. A shipping line’s international cargo now has to travel through Harrisburg, Pa., or Knoxville, Tenn., to have the benefit of double-stack train savings.

In a statement, Maersk Line, the biggest international cargo carrier, said that “the project will add more cargo transportation options in Norfolk for both import and export.”

Back at the tunnel, the clearance project advances daily during a 10-hour block of time. During the other 14 hours of the day, more than 40 trains a day roll through the tunnel.

“There are a lot of challenges to maintaining rail traffic through the tunnel,” said Bob Billingsley, director of structural projects, whose current base of operations is in a trailer at the Cowan work site. “We had to plan this project carefully to prevent interference between our construction schedule and train movements.”

Each workday, crews assemble about an hour before they enter the tunnel, starting the day with a safety meeting. As they enter, workers move individual brass tags from the “out” section to the “in” portion of a wooden board at the tunnel entrance. The system of “brassing out,” as Billingsley described it, is used to ensure that everyone is out of the tunnel before train operations resume.

To remove the liner, Kory Sepulveda and two dozen co-workers for contractor Johnson & Western Gunite run the boring machines, which throw off so much dust that workers wear respirators and use earphones to muffle the din.

“Inside the tunnel, you have to be pretty sharp,” Sepulveda said. “You get so focused on what you’re doing. You have to have your eyes looking all over the place all the time. You have to watch and look at everything. There are so many hazards in there.”

Eight hours later, the road header stops turning. Before leaving, workers reinforce the roof wherever the concrete liner was removed by injecting “shotcrete,” a quick-setting form of concrete, by drilling holes into the roof at five-foot intervals. Steel bolts are placed on top of each filled hole for added safety.

When Sepulveda and his co-workers leave the tunnel, they move their tags to the “out” portion of the board and park the construction equipment and the debris-filled rail cars by 6:30 p.m.

In total, 5.4 miles of tunnel are being cleared, a few feet at a time. The work is going on at eight other tunnels and is set to continue until March 2010.

The last scheduled step is to clear a 2,627-foot tunnel near Williamson`, W.Va., about 166 miles to the west of the Cowan Tunnel.