CG Railway is the most unusual short rail. The “railroad” runs a rail-ferry service between Mobile, Alabama and Mexico, bringing real meaning to the word intermodal. But this floating rail bridge might be more than a niche service. Is this the future of short-sea?
By George Lauriat, AJOT
It’s a little difficult to say whether CG Railway is the United State’s most unusual railroad or oddest US steamship line. The Mobile, Alabama based CG Railway is a subsidiary of International Shipholding Corporation and runs a rail-ferry service every four days between terminals Mobile, Alabama and the port of Coatzacoalcos in Veracruz in southern Mexico. The company is a short line (Class 3) and a member of the Association of American Railroads (AAR), but the company operates “rail ferries” that carry around 115 standard rail cars. The voyage is about 900 miles between the two terminals as opposed to 1400 miles if utilizing the established Mexican-US border crossings. In Mobile, CG Rail connects directly to five US railroads and on the Coatzacoalcos side directly into to Mexican railroad Ferrosur (Ferrocarril Del Sureste, S.A. de C.V.).
EVOLUTION OF A NEW STRATEGY
Kevin Wild, CG Railways senior vice president, in an interview with the AJOT, explained how the unique strategy evolved. “The concept began evolving in 1999 with the idea of using LASH (Lighter Aboard Ship) ships to take advantage of NAFTA cargo,” Wild said. It was quickly assessed that the LASH concept wouldn’t work with limited inland access in Mexico. However, the rail ferry concept offered a unique opportunity to seamlessly plug into the rail systems of both countries.
Rail ferry wasn’t a new concept. Railroads have used ferry services almost since the beginning of railroading itself. There had already been services from Texas to Mexico and even to pre-Castro Cuba. But this situation was very different. This was an independent group, a shipowner at that, looking to ferry rail freight between markets. This wasn’t about shuttling rail equipment or making some connection to rail on the other side of a harbor. This was about developing a new international intermodal market. In examining the market “we thought we needed to be south of Mexico City and east of the Mississippi,” Wild explained.
Timing was another issue. The privatization of Mexico’s railways meant that for the first time moving freight in a timely manner meant profit. The regions south of Mexico City were far from the US border gateways and underserved. There was an opportunity beckoning if the service could save significant time and handling by moving directly into the US rail system.
“To make it work, we had to connect directly into the US Class 1 rail system, so we looked at New Orleans and Mobile…both of which had excellent Class 1 rail access,” Wild added.
In 2000, CG Railroad began working out of Mobile, which has access to four Class 1 railroads, CSX, Burlington Northern Santa Fe (BNSF), Canadian National (CN) and Norfolk Southern (NS). However, Mobile was booming. With space tight and port redevelopment looming, CG Rail looked to relocate in New Orleans. Unfortunately, the relocation coincided with hurricane Katrina, and the rail company found itself returning to Mobile. The company, with the assistance of the Alabama State Port Authority (ASPA), relocated to the TASD railway terminal in Mobile. This enables the company to have terminal-to-terminal rail service. Rail cars are loaded on one end, transported and offloaded directly into the rail system at the other end of the service. This seamless process reduces handling, handles over weight loads and avoids choke points.
Another important feature of the strategy was that CG Railway is a “railway”, and as such offers a single bill of loading and invoicing like a railroad. For shippers this simplifies the entire shipping procedure from documentation to insurance