BNSF plans in Barstow represent evolution of intermodal supply chain, CEO says

LOMBARD, Ill. — BNSF Railway’s plans for a major new facility in Barstow, Calif., represent the continuing evolution of the railroad’s efforts to improve the intermodal supply chain, says CEO Katie Farmer.

The railroad’s plans for the Barstow International Gateway, a $1.5 billion, 4,500-acre terminal in Southern California, builds on the development of earlier Logistics Parks facilities., Farmer told the Midwest Association of Rail Shippers Winter Meeting on Thursday.

Those include Logistics Park Alliance (in Haslet, Texas, near Dallas-Fort Worth); Chicago (in Elwood, Ill.); and Kansas City (in Edgerton, Kan.). Alliance, the first such facility, opened in 1993.

“The concept is still unique to the industry,” Farmer says, “that we would use an intermodal hub and acquire property adjacent to that facility, using the intermodal hub as our anchor, and co-locate our customers’ terminals, distribution centers, and warehouses. And what we saw was that we were able to improve speed to market for our customers; reduce costs in general; reduce fuel costs; improve the sustainability of the product; and that translated into growth. And every year that facility’s been in business, we’ve expanded that facility.”

Where that concept meets the Barstow plan is to address a supply-chain issue exposed by the pandemic: the inability to quickly move goods out of the ports of Los Angeles and Long Beach. That, says Farmer, invited the questions: “How can we improve that product? How can we evolve that supply chain?

In Barstow, she says, “not only will we have the intermodal hub as the anchor, and thousands of acres of property adjacent to it for distribution centers [and] warehousing capabilities, but we’ll also have a block-swap yard adjacent to it. That will allow us to facilitate evacuating freight off the ports of LA and Long Beach.”

When cargo was backing up at the San Pedro Bay ports, the railroads serving the port needed “precious geography” to build trains to go east, she says. The addition of the block-swap yard to the Barstow plan allow the railroad to quickly move freight out of the port along the Alemeda Corridor rail line to Barstow. There, it be built into trains going east — “which will also allow us, with that capacity, to allow additional origin-destination opportunities,” Farmer says — or can be handled by the new local distribution or warehouse facilities. Those facilities will also help address a dearth of available warehouse space in Southern California’s Inland Empire region, where the current vacancy rate is less than 1%, she said.

While BNSF has run into permitting issues with past plans in Southern California — and has hardly been alone in that regard — Farmer believes this project faces a more favorable path forward.

“What I would say is a little bit different about this facility is where we’re trying to build the facility,” she says. “We have a lot of enthusiasm and support from the city of Barstow. … We believe that the value of the facility, as well as what we’ve seen in terms of challenges for the supply chain over the last 2½ years, speaks to why we need this facility.

“We’re working very hard to tell the story, to work with the state of California, and federal permitting, and to this point, we’ve had a good reception.”