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Heartland Intermodal Gateway sees new activity

July 17, 2018

PRICHARD — The Heartland Intermodal Gateway (HIG), a rail-to-truck container trans-loading facility for the Norfolk Southern Railway in Prichard has seen an increase in container traffic in recent weeks.

In May, DARCO International, working with XPO Logistics and Thunder Logistics, became the first local company since Toyota Motor Manufacturing to utilize the facility for the continuous shipment of its in-bound freight containers. DARCO’s first container shipments arrived at the facility ready for local delivery and on May 22 those same containers, now empty, were loaded with wood products for shipment to China.

“What this facility means to DARCO is that we now have a new tool in our logistics and supply chain toolbox,” said Mark Cooper, director of regulatory affairs for DARCO. “We can utilize Prichard direct or leverage its benefits to keep other ports honest in their pricing and fee structure.”

DARCO International currently imports 110 to 150 40-foot containers a year, according to Cooper.

“We are bringing half of them to Prichard, while everyone along the pipeline goes through a learning curve,” he said. “Our plan is to bring all of our business to Prichard within the next six months.”

Officials with the Huntington Area Development Council (HADCO) say this is significant as these initial shipments provide a proof-of-concept for containerized exports to and from the Port of Shanghai. The successful execution of these shipments can provide a model for companies throughout the region who want to utilize the facility.

“HADCO has been working alongside the West Virginia Public Port Authority, as well as the West Virginia Development Office and Division of Forestry, to generate container shipments through the facility,” said Adam Phillips, business development specialist for HADCO. “All have worked to identify area importers and exporters and to help manage future containers movements.”

For the facility to work cost-effectively, in-bound and out-bound container shipments must be coordinated, Phillips said.

“Without the coordination of in-bound and out-bound containers, international freight carriers cannot serve the facility,” he said. “Freight companies will offload in-bound containers wherever they can easily be redistributed for out-bound shipment. To serve our region, containerized shipments have most commonly been offloaded at Rickenbacker Intermodal Terminal in Columbus, Ohio, where containers then must be shipped via truck for final delivery and shipped back for redistribution. This can be very expensive for our local companies.”

Cooper says the rail carriers at DARCO’s traditional inland ports are raising their fees and cutting back on available working time in the rail yards.

“The recent legislation regarding electronic trucking logs are being used as reasons for increased trucking charges,” Cooper said. “We do not have that issue at Prichard. The West Virginia Port Authority and HADCO recognized these potential stumbling blocks and worked to eliminate them at Prichard.”

Cooper says by using the local U.S. Customs and Border Protection office in Charleston, they can receive international cargo direct into Prichard without arranging for customs clearance at a more expensive and time consuming arrival sea-port.

“In short, we can transact any international freight business locally with a savings in cost and time,” he said.

Phillips says the lumber and forestry industry in West Virginia was identified as a potential opportunity for out-bound freight movements.

“Once several local companies confirmed that they could utilize available empty containers, XPO Logistics, a third-party logistics provider, was able to negotiate a price point for in-bound and out-bound container shipments through the HIG facility,” he said.

Phillips says the facility has represented a tremendous cost savings for local companies.

“Without having to carry unnecessary drayage costs to and from Columbus, our local companies stand to save hundreds if not upwards of a thousand dollars per container shipped through the facility,” he said.

Phillips added that these recent successes are just a small portion of the potential benefits the HIG facility can have for the region. In addition to providing cost-savings opportunities for area businesses, the facility can help to stimulate new investment in the region as well, he said.

“We plan to utilize the facility as part of our marketing and attraction efforts in the coming years,” said David Lieving, executive director of HADCO. “The Heartland Intermodal Gateway unlocks unique logistical advantages for our region which are really compelling to warehousing, distribution and logistics companies. In a time when online retail is thriving, the on-time delivery of goods and products is essential, and we feel that the facility in Prichard can be a key driver of new investment in our region.”

After a long history of planning, construction delays and difficulty finding a company to operate the Heartland Intermodal Gateway in Prichard, the facility was finally up and running in late 2015.

Unveiled in 2005 and long heralded as the top project in the area needed to spur economic growth, the future of the Heartland Intermodal Gateway was tinged with a level of uncertainty as the endeavor’s main partner, Norfolk Southern Railroad, was facing a potential hostile takeover from Canadian Pacific Railroad, a company that historically has little to no interest in such facilities.

Owned by the West Virginia Port Authority, the $32 million HIG is situated on 100 acres of land -76 of which were donated by Norfolk Southern - along the Big Sandy River about 10 miles south of the Interstate 64 interchange in Kenova.

The facility provides businesses with a truck-to-rail transfer option along the Heartland Corridor, a 530-mile stretch of railway from the Port of Virginia in Hampton Roads through West Virginia to Chicago.

The project was paid for through a $12 million federal grant, more than $18 million from the state of West Virginia as well as $1 million from Norfolk Southern.

For more information on how companies can benefit from the Heartland Intermodal Gateway facility, contact Phillips via email at aphillips@hadco.org or by phone at 304-633-0990.

Follow reporter Fred Pace at Facebook.com/FredPaceHD and via Twitter @FredPaceHD.