On the Surface: Chicago Bypass
While traditional big city freight hubs grapple with congestion, a new crop of rural inland ports is springing up as shippers look for efficiencies.
When people think of intermodal, Chicago often comes to mind.
After all, the Windy City is the nation’s busiest rail freight gateway and the third-largest intermodal container/trailer port in the world, following Singapore and Hong Kong, according to the Illinois Department of Transportation.
Many shippers routing their freight through Chicago face significant congestion, myriad tolls and other ancillary expenses. However, there’s an alternative to this traditional freight transportation hub emerging about 160 miles southwest at Decatur, Ill.
Decatur’s Midwest Inland Port features an intermodal ramp; direct access to Class I railroads CSX, Canadian National and Norfolk Southern; toll-free access to Interstates 72, 55, 74, and 57 and U.S. Highway 51; and an airport.
Although the railroads and airport have been operating in Decatur a long time, grain producer and shipper ADM built an intermodal ramp there five years ago and opened it to other companies’ freight in 2015, Nicole Bateman, executive director of the Midwest Inland Port, told American Shipper.
The port would not divulge total freight volumes due to its affiliation with ADM, which keeps its volumes through the Decatur hub confidential. However, Bateman said third-party volumes on the intermodal ramp grew 20 percent in 2016 and another 20 percent last year. The port is seeing a combination of existing customer volume increases, as well as new customer development, she said.
Users of the Midwest Inland Port also have experienced savings in freight transportation costs and significant reduction in transit times, Bateman said.
While Chicago may have trucks, it does not have the chassis, and that is where the issue comes into play for many of the region’s shippers, Bateman explained, adding that Decatur has the chassis, trucks and quick turn times.
“In larger [Midwest] cities, it’s been difficult to arrange trucks and drivers in a timely manner, leading to delays beyond seven days in Chicago, and up to seven days in Indianapolis and St. Louis,” Bateman said. “This adds box detention charges at intermodal ramps, so not only are customers losing time, but they’re losing money.”
Instead of sitting at a ramp in Chicago, where the average wait time could be an hour and a half to two hours, or five hours at peak time, the average wait time at ADM’s intermodal ramp in Decatur is 24 minutes, and 57 minutes at peak time, she explained.
Ryan McCrady, president of the economic development corporation of Decatur and Macon County, told American Shipper businesses of all sizes are attracted to the Midwest Inland Port, adding that even companies not shipping full train loads can use the facility and its assets.
He explained that the inland port is a good option for shipments where Chicago is not the final destination. However, he said Decatur is in no position to compete with Chicago, but rather to complement it.
T/CCI Manufacturing, a maker of heavy-duty truck compressors, has used the Midwest Inland Port for the past two years, said Kara Demirjian-Huss, the company’s global marketing director. She noted the company has a plant in Ningbo, China, which ships its containers from Shanghai to Prince Rupert, Canada. The containers are then placed on Canadian National trains en route to Decatur.
Prior to using the Midwest Inland Port, T/CCI’s containers were shipped from Shanghai to Los Angeles, where they were transported by rail to Joliet, Ill., and then trucked another 180 miles south to Decatur, Demirjian-Huss said.
T/CCI’s products are heavy, and the prior route required the company to use 20-foot containers. However, this new route with CN allows the company’s products to be transported in 40-foot containers, resulting in substantial cost savings.
T/CCI estimates that it saves between $400,000 and $500,000 annually by using the Midwest Inland Port, said Dennis Flaherty, vice president of global operations at T/CCI. As the company expands its use of the Decatur rail hub, it expects those transportation cost savings to rise, he added.
Rural King, a farm and home store based 40 miles southeast of Decatur in Mattoon, Ill., also relies on the Midwest Inland Port.
In an interview, Alex Melvin, CEO of Rural King, said prior to using the Midwest Inland Port, his company relied heavily on Chicago, which was a mess. He said the Decatur operation provides Rural King with much better service.
Rural King relies on the inland port for some imports, which are railed to Decatur from Canada and Los Angeles. The company picks up those goods with its own trucks and takes them to its distribution center at Mattoon.
Overall, Rural King has about 2,000 containers per year now coming to the Midwest Inland Port.
Melvin said the benefits of using the Midwest Inland Port are that Rural King is able to keep less on-hand inventory because it’s able to receive its goods quicker. Rural King also has lowered its operations costs by not relying on trucks coming from Chicago.
While traditional big city freight hubs continue to grapple with congestion, a new crop of rural inland ports, like Decatur, will inevitably spring up in the coming years as the nation’s shippers increasingly look to them for efficiencies.
Source: Desormeaux, Hailey. “On the Surface: Chicago Bypass.” American Shipper, 8 May 2018, www.americanshipper.com/main/fullasd/on-the-surface-chicago-bypass-71286.aspx.