On October 1, in Greer, S.C., 212 miles from the Port of Charleston, an inland port will be opening for business. About 40 acres of the eventual 100-acre site will be opened initially with the ability to handle about 40,000 containers annually. The inland port has a potential capacity of 100,000 containers per year, according to the South Carolina Ports Authority. Earlier this month, BMW Manufacturing Co. announced that it will move its semi-knocked down export operation to the Greer facility.
Around the same time BMW announced its move, a New York State economic development agency approved a grant to advance a proposed inland cargo port next to a CSX rail yard near the Syracuse suburb of Manlius. The grant will be used by inland port owners 3Gi CNYIP, a partnership among Mohawk Global Logistics, Synapse Partners LLC, and Brang Commercial Real Estate Cos., to purchase 90 acres of land for what is to be called the Central New York Inland Port. Once developed, the facility will comprise 115 acres and will support import, export, and distribution operations.
Inland ports are becoming increasingly interesting to shippers, carriers, developers, government agencies, and port authorities because they can ease congestion at coastal ports. Demand for acreage at inland ports is expected to rise when the bigger locks now under construction open the Panama Canal to ships with nearly three times the capacity of those that currently make the passage. The bigger ships could overwhelm the capacity of East Coast ports, so shippers and carriers alike are looking to rail their cargo directly to inland ports for further processing and distribution.
Not all inland port are startups like the ones in South Carolina and New York. The Port of Indiana - Burns Harbor, located in Portage, Ind., on the south shore of Lake Michigan, 18 miles from Chicago, is the largest of all U.S. Great Lakes ports in terms of oceangoing volume. Kansas City’s SmartPort sits at the largest rail hub in North America. What both have in common is the ability to attract ocean cargo directly inland for processing and convenient forwarding to a broad spectrum of locations across the continent’s heartland.
The Port of Indiana - Burns Harbor handles international ships that traverse the Great Lakes and the St. Lawrence Seaway to and from the Atlantic Ocean. The port also provides connections on barges via inland river links to 38 states and the Gulf of Mexico. The Ports of Indiana, a statewide port authority, also has port facilities in Mount Vernon and Jeffersonville. Together with Burns Harbor, they handle close to $2 billion in cargo shipments per year. The port hosts 500 ships and barges that dock each year and is a major hub for steel processing since it is near three steel mills.
The Ports of Indiana Commission recently approved contracts to upgrade Burns Harbor. One project involves reconstructing about a half-mile of rail line and replacing 1,000 cross ties. The port has a three-mile rail loop that was built in 1980 that hooks into the nearby Norfolk Southern Rail Yard. An estimated 13,000 railroad cars pass through the port every year.
Other work being done includes replacing about 1,900 feet of sewer pipe that runs under the freight and commuter rail lines.“It is important that we maintain the port infrastructure and keep it in top shape in order to provide maximum receipt and delivery flexibility for the businesses located here,” said port director Rick Heimann.
The Ports of Indiana touts its environmental as well as its logistical benefits. A joint U.S.-Canadian report released earlier this year showed that the Great Lakes-Seaway fleet is seven times more fuel-efficient than trucks and 1.14 times more fuel-efficient than rail. The study also found that shifting Great Lakes-Seaway traffic to trucks would increase truck traffic by 35 to 100 percent and would lead to $4.6 billion in additional highway maintenance costs over a 60-year period.
“The study findings present a more complete picture of shipping in the Great Lakes in terms of the benefits of this mode of transportation,” said Heimann. “Data from the study will help inform future decisions on subjects ranging from investments in new technologies, budget allocations for infrastructure projects, and appropriate levels of regulation.”
The Kansas City metropolitan area promotes itself as a region with the lowest truckload shipment costs and the most central location in the United States. “Kansas City boasts more freeway-lane miles per capita than any other U.S. city, and is one of only a few U.S. cities in which four interstates intersect,” said Chris Gutierrez, president of Kansas City SmartPort, Inc. “Five major railroads serve the metropolitan area, making Kansas City the largest rail hub in the nation in terms of tonnage.” Kansas City SmartPort is a non-profit economic development organization which promotes Kansas City as a North American logistics hub.
One of the largest projects going on in the Kansas City metro area is construction of BNSF’s intermodal park on the Kansas side of the state line. The 400- to 500-acre facility will be capable of about 500,000 lifts annually. Around the facility is another 600-acre site ready for logistics development, said Gutierrez. One building is already under construction adjacent to the intermodal site.
Kansas City’s central location and the availability of its transportation infrastructure is what allows Horizon Lines, a U.S. flag carrier, to provide 15-day transit times between Shanghai and Kansas City, a service it has been providing since 2011.
“Our customers are telling us they want fast and reliable service alternatives, not only port-to-port, but inland to final destinations as well,” said Brian Taylor, senior vice president and chief commercial officer for Horizon Lines. “U.S. retailers are maintaining low inventory levels and our express service provides a fast and reliable transit schedule to deliver goods to their shelves in a timely manner.”
Horizon Lines is able to offer a cost-effective inland service because of operational synergies with the carrier’s domestic U.S. shipping network, Taylor noted. “Long-established intermodal hubs like Kansas City are expediting container freight to the West Coast in the existing Hawaii and Guam services,” he said. “These lanes are now open to move export cargo to Ningbo and Shanghai.”
Kansas City’s status as a cargo hub is boosted by the fact that it has more foreign trade zone space, at 10,000-plus acres, than any other U.S. city. FTZs have typically been located at, or adjacent to, a U.S. port of entry. While Kansas City is near the geographic center of the U.S., it is able to receive maritime containers that move in bond from coastal ports which then enter a local FTZ.
Companies like Blount International, a manufacturer of outdoor products, industrial and power equipment, and lawnmowers, wants to shift some of its manufacturing operations to an FTZ in Kansas City, and is using an expedited process that reduces application times from a year and half to three months, according to Gutierrez. A company study found Blount could reach 82 percent of its customers within two days by regular service from Kansas City.
Using a Kansas City FTZ means that Blount International can cut inbound transit times by two or three days, according to Gutierrez. “Congestion at Los Angeles and Long Beach can hold back cargo,” he said. “That includes general inspections and any additional inspections Customs and Border Protection might want to perform. Moving in bond to Kansas City, those clearance steps are performed locally.”
The company also receives customs and duty benefits by operating from the FTZ. Parts for log splitters, one piece of equipment it assembles at the FTZ, are subject to 4.7 percent to 6.7 percent in import duties. Once they are assembled into the finished product, the log splitter leaves the facility for domestic distribution at a duty rate of only 2.1 percent.
Blount can defer duty payment by moving its import containers from the ports of Los Angeles and Long Beach under bond and delivering them to the company’s FTZ and storing them or performing manufacturing and assembly processes on them within the FTZ. For products that are re-exported, the company avoids U.S. customs duties entirely.
Importing to the Port of Los Angeles and clearing each container adds up to 3,000 to 4,000 entries per year. Moving that same volume of containers in bond to the FTZ in Kansas City allows Blount to take advantage of weekly filings and save substantially on filing charges.
The Kansas City metro area offers a category of real estate, vertical-ready, as opposed to shovel-ready, that can get a warehouse or distribution operation up and running quicker, by as much as three months, according to Gutierrez. There is about 3 million square feet of vertical-ready space available at sites across the Kansas City metro area.
“At a vertical-ready site, the shovel portion of construction has been completed, including the foundation,” Gutierrez explained. “Utilities are in place and zoning permits have been granted.”
All of this occurs before a company agrees to buy or lease the land. “When a company agrees,” said Gutierrez, “they can be ready to build immediately.”