CSX increases its intermodal business in Va.
- November 30, 2011
The Port of Virginia is key to CSX Corp.’s newly formed strategic partnership with Denmark-based Maersk Line, the largest ocean carrier in the world. The contract between the two, which starts Jan. 1 and involves a number of ports on the East Coast, gives CSX a larger portion of intermodal business (transporting containerized cargo and truck trailers) at APM Terminals in Portsmouth. Before striking the deal with CSX, Maersk used Norfolk Southern Corp. for all its intermodal business at the terminal.
“[The partnership] will grow our presence in that port,” says CSX spokesman Robert Sullivan. “It’s good for us but also increases the profile of the port itself, which can show potential shipping companies that they have two major railroads that have a substantial presence and provide good services.”
Joe Harris, spokesman for the Virginia Port Authority, which leases APM Terminals, agrees that having both of the East Coast’s major rail carriers serving the terminal provides multiple options for moving cargo. “It’s good when you go out and talk to cargo owners and ship lines to generate business,” he says.
This year, the port is on pace to move 2 million TEUs (20-foot equivalent units such as containers). “We move just shy of one-third of our total by rail,” Harris says. “Rail cargo business is a very important piece of what we do here.”
The Port Authority and CSX are hoping that the projected 2014 expansion of the Panama Canal, which will allow larger ships to pass through the Canal, will bring additional intermodal business to Virginia. “We have the deepest shipping channels on the East Coast,” Harris says. “Bigger ships need deeper water.”
CSX is part of the $850 million National Gateway initiative that will improve the flow of rail traffic by increasing the use of double-stack (one container stacked on another) trains between points in the Midwest and the East Coast. Currently CSX has single-stack trains going into the port. Before the project can be completed, dozens of clearances (raising bridges, modifying tunnels and lowering train track beds) have to be addressed.
There are more than 60 of these obstructions between CSX’s intermodal terminal in northwest Ohio and mid-Atlantic ports. “By removing the obstructions we can take twice as much freight on one train,” says Quintin Kendall, CSX’s regional vice president of state relations.
The lynchpin is the Virginia Avenue tunnel in the heart of Washington, D.C. “It’s close to the capital,” Kendall says. “It was built around the turn of the 20th century. It doesn’t have the clearance to take double-stack trains. That is what makes it so significant.”
In January CSX will increase its trains coming into the port from five to 10. CSX also has contracts with other ocean carriers, Swiss-based Mediterranean Shipping Co. and French-based CMA-CGM. Most of the containers it transports to and from the port carry consumer goods. “That’s the value of intermodal,” Kendall says, noting that items can be packed on a truck, taken to a ship, sent to the U.S., put on a train and delivered to a distribution center. “That is a growing segment of the business.”