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Area Development

For Industrial Development, Rail Is the Gravy Train

Rail development has driven economic opportunity across the United States, opening up new markets and efficiently moving freight.

Q3 2018
Editor’s note: Area Development’s St. Petersburg Consultants Forum featured a presentation on rail’s role in industrial development by Aubrey Brown, Manager, Industrial Development, at CSX. The following are some key ideas from Brown’s presentation. In your firm’s quest for new manufacturing or distribution locations, access to rail transportation has probably been a factor in many of its location selections. After all, freight trains transport many of the items that America depends upon, including food and food products, plastics, fertilizer, motor vehicles, sand, stone and gravel, and, of course, coal. In recent decades, the rail industry has evolved to become an even more powerful driver of corporate growth and economic development.

America’s freight railroads have invested $575 billion in their networks since 1980. Today, the $60 billion freight rail industry encompasses 140,000 miles of tracks operated by seven Class I railroad companies, as well as regional and local rail operators, according to the U.S. Department of Transportation’s Federal Railroad Administration.

Shortline Rail’s Often-Overlooked Role
Many of those miles are operated by the shortline and regional railroads that have played a major role in driving economic opportunities across the United States. During the past 30 years, nearly 560 of these companies have emerged across 49 states. Connecting off-the-beaten-path businesses with larger markets and, often, the major railroads, shortlines play an often-overlooked role in community development. They’re particularly valuable for “first and last mile” services that the major railways can’t efficiently provide. For CSX, shortline railways have become valuable partners in supporting industrial development that provides companies with proximity to customers and attractive labor pools.

By serving the Appalachian Regional Port, CSX is offering the most efficient, cost-effective, environmentally friendly method for shipping goods long distances over land. This will give shippers an alternative to trucking their goods to and from the Port of Savannah, and will help lower shipping costs in the northwest Georgia region. Aubrey Brown, Manager, Industrial Development, CSX Large-Scale Opportunities
Rail is also opening up large-scale economic development opportunities. In Chatsworth, Ga., for example, CSX has joined the state of Georgia, Murray County, and the Georgia Ports Authority to create the new Appalachian Regional Port to funnel goods from four southern states to the deepwater Port of Savannah.

The facility, owned and operated by the Georgia Ports Authority, will expand access for domestic and international shippers by providing a direct rail connection from the Appalachian Regional Port to the Garden City Terminal in Port of Savannah.

Garden City is second only to New York-New Jersey in terms of East Coast port volume, so the new terminal is expected to boost shipments and remove thousands of trucks from Georgia highways every year.

As NAFTA renegotiations continue, both the rail operators and the companies they serve are hoping for a positive outcome. Since NAFTA was originally signed, the major railways have made significant investments in new jobs and facilities to support the complex supply chains that NAFTA helped create.

Ideally, a renegotiated NAFTA agreement will open up opportunities for U.S. exports in Canada, Mexico, and points south. However, the increase in exports from U.S. producers would require infrastructure investments around ports and intermodal centers specifically to accommodate export logistics.

As we see more freight moving through East Coast ports, CSX is well positioned to support the needs of shippers and logistics managers. Our focus on maximizing the use of rail assets and balancing freight flows to and from ports allows CSX to quickly cycle shipping containers through the supply chain, providing consistent, reliable service. Aubrey Brown, Manager, Industrial Development, CSX Enhancing Rail Service to Ports
East Coast railroad companies, including CSX, already have expanded their on-dock rail capabilities in response to the Panama Canal expansion. For instance, in 2011 CSX opened a new Northwest Ohio Terminal near North Baltimore, Ohio, to accommodate double-stacked intermodal freight moving via rail from East Coast ports. The Georgia Ports Authority is also investing more than $126 million to expand rail capacity at its Garden City terminal. When complete, the “Mega Rail” project will expedite the transfer of containers to and from trains inside the terminal, enhancing efficiency and overall service to the Port of Savannah.

Whatever the outcome of the NAFTA talks, a rail-served facility will continue to be a smart choice for many companies seeking to sidestep the growing problem of road congestion and a national truck driver shortage. With a 190-year history in freight rail, CSX is well equipped to help companies and economic development agencies develop rail-served facilities, from identifying sites to construction and expansion.

A freight train can move one ton of freight more than 488 miles on a single gallon of fuel. With that powerful efficiency, rail continues to bring the gravy train for companies and communities across the country.

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