“This makes lots of sense to reach further into the Ohio Valley without getting into the crosstown rubber-tire moves in Chicago,” says intermodal analyst Larry Gross.
BNSF is essentially trading the cost of a rubber-tire interchange move in Chicago for extended drayage from North Baltimore to destinations that include Detroit; Cleveland, Columbus, and Cincinnati, Ohio; and Louisville, Ky., Gross says.
“I think this will eventually work,” Gross says.
Generally the goal of intermodal shippers is to use rail to get as close as possible to the freight’s ultimate destination, Gross says. But CSX has streamlined its intermodal network to reduce operational complexity, cut costs, and boost profitability.
Last year, CSX scuttled its hub-and-spoke model for serving low-density intermodal markets and scaled back service to Louisville and Detroit, among other places. The Northwest Ohio Terminal at North Baltimore was a container-sorting facility in the old hub-and-spoke model, which added cost and transit time for traffic that’s both price- and service-sensitive.
Now the underused, modern terminal is being repurposed as CSX shifts toward an intermodal strategy that centers on point-to-point service in high-volume lanes.
“We are excited to transform Northwest Ohio into a regional demand point that provides attractive solutions for customers and supply chain needs,” CSX CEO James Foote said in a statement.
The terminal is ideally situated, CSX says, with a population of 30 million within a 200-mile radius.
There’s not currently much drayage capacity in North Baltimore, which means the new service at first is likely to cater to national trucking companies like J.B. Hunt and Schneider National, which have their own drivers.
In the near term, the lack of drayage capacity will be problematic for other intermodal users.
“It’s not like drayage capacity will magically appear,” Gross says.
But he expects local drayage capacity to develop as intermodal volume ramps up at the terminal.
CSX’s long-term growth plan for Northwest Ohio includes the construction of a logistics park adjacent to the terminal. The logistics center should help develop a much larger local market, Gross says, including loaded backhaul opportunities to export agricultural products to Asia.
The logistics park is being developed by NorthPoint Development of Kansas City, Mo., which built a logistics park on BNSF Railway in Kansas City. NorthPoint officials did not return a Trains phone call seeking comment on the construction timeline or cost of the 500-acre center.
The logistics park ultimately will make North Baltimore a more attractive destination for shippers, Gross says. “It’s a longer-term play,” he says, noting that the facility likely will be similar to logistics parks on BNSF in Joliet, Ill., Oklahoma City, Kansas City, and Alliance, Texas.
Locating a logistics park adjacent to an intermodal terminal dramatically reduces drayage costs for shippers and reduces their carbon footprint, BNSF says.
CSX says the BNSF direct service will increase container volume at North Baltimore. The number of trains calling at the terminal won’t change initially, but is expected to grow over time.
When the service begins on Oct. 29, with departures in both directions five days a week, the haulage traffic will move in existing intermodal trains that BNSF and CSX interchange via steel wheel in Chicago.
The key with the haulage agreement is that it will give BNSF more control over the move east of Chicago, Gross says. It’s similar to a haulage agreement BNSF has with CSX to handle intermodal trains between Birmingham, Ala., and Atlanta.
“The offering provides another option for BNSF customers to move their shipments between Los Angeles and the Ohio Valley region,” BNSF spokeswoman Amy Casas says. “The new service will provide access to some of the fastest-growing industrial and consumer markets in and around northwest Ohio, including Toledo, Columbus, Detroit, Louisville, and Pittsburgh.”
The new CSX-BNSF service to North Baltimore is not directly related to changes CSX made to steel wheel interchange at Chicago that CSX announced in August as part of a streamlining of its intermodal network.
“However, both changes support the intermodal strategic priorities, which include a focus on high-density lanes and the optimization of efficiency within train and terminal operations,” a CSX spokeswoman says.
CSX also announced the launch of new direct international service between North Baltimore and the Ports of New York and New Jersey. Gross says North Baltimore will likely forward this international traffic via highway to destinations in Southern Michigan, western Ohio, and Indiana.
Could this be a prelude to these to merging?
BARTLEY PICKENS – Unsignalized (cross-buck) crossiings – this is off topic but it’s an interesting diversion. Where I live in Waukesha County Wisconsin (home of TRAINS-MAG) CNRailway, the former Soo Line and former Wisconsin Cenral Limited, has driveways crossing the main. These include residential driveways and a passageway to the truck yard of a road construction company. I have no idea of what the regulations are, but I do wonder why the insurance carrier of the contracting firm allows this.
From my 5000-foot view, I expect I’ll see/hear even more intermodal trains using the two diverging routes northeast of Perry OK where trains can head east via KC or Tulsa/STL. Traffic arrives from the west via Avard OK and keep rolling northeast/east. These two lines pass a short distance from my deer-hunting lease so there are times I can hear locomotives sounding for the two nearby grade crossings nearly every 20 minutes. One of these grade crossings is an unlit country crossing with crossbucks only so I approach there with great caution as visibility is extremely limited. A high-school friend is recently retired from BNSF and tells me this type of crossing will get full warning equipment in the near future.
BNSF recently completed a significant upgrade for yard bypass tracks at the West Cherokee Yard in Tulsa so this kind of traffic just keeps rolling unless a crew change takes place. The amount of intermodal traffic through this area in the Christmas season is quite impressive.
@ Larry Boyd: “Container sorting has stopped at North Baltimore, which now serves as a block-swapping facility and is still handling some local intermodal containers. Harrison said CSX may have a trick up its sleeve for a future use for the $175 million terminal and hinted it might involve a western railroad looking to extend its reach into the East.” – News Wire, November 29, 2017.
This is essentially BNSF extending its reach east with CSX getting paid to provide a crew, yard and track time. Someone else gets to do the heavy (logistics) lifting.
This would not have possible if Hunter were still in charge. It is only 5 days a week not 7.
I am amazed that it is economical for drayage of a single container upwards of 200 miles from the rail (or ship) terminal. The truck, driver, an entire day on the road—all for one container.
Eric Schneider,
When I was working in logistics, it was quite often less expensive to deliver trailers/containers from a Chicago railhead to points in Michigan, Indiana, Ohio, Wisconsin and Southern Illinois in excess of 200 miles than it was to deliver from a ramp closer to the destination. Usually this was because you either already had a backhaul to the ramp the container originated from or the delivery drayage carrier did extensive long haul pick-up/delivery work, sometimes they even used the empty trailer/container for local OTR moves. Personally I think we should help to remove OTR trucks from the highways by instituting a dual weight limit…90k max when travelling over 400 miles in intermodal service on a railroad, 80k if completely OTR…but I know the OTR guys wouldn’t like that idea.
Lots of opportunities here for UP/KCS + NS or BNSF/KCS + NS to get a lot closer to eastern origin/destination points without further cluttering already crowded highways with additional trucks.