Casting the net

Initially designed to relieve cargo congestion at coastal hubs, inland ports are now seized on as a new dimension and tool in increasing efficiency, cutting down on pollution and, more recently, acting as a spark plug and giving a jolt to regional commercial and industrial development.

The new project of Centreport in Winnipeg, Canada, is a prime example of the new trend of regional development. Established a year ago, the 20,000 acre Greenfield site in Manitoba also encompasses 130 businesses, more than half of which are manufacturing and wholesale, that can take advantage of its plan to become a regional and North American hub.

Central to its prospects for success is the status as the country’s first Foreign Trade Zone.

Unlike US intermodal and inland ports, Winnipeg has only 800,000 people and has to look long-distance for its markets.

“Our sweetspot is as staging area for goods to western Canada and the north,” says chief executive Diane Gray. “We are also well situated for the agricultural region of Canada and parts of upper US to build on making and preserving the identities of specific commodities for markets willing to pay a premium.”

To that end, there has been some success, with negotiations under way with a China company to containerise specific products (Ms Gray says it is too early to disclose details) and market them as coming from a specific area.

But to make any real impact, the port has to jack up the road system and is spending $212m on an expressway.

That’s just the start. A big selling point is that Winnipeg is the only main city on the prairies served by three Class 1 railroads. One logistical difference compared with US hubs is that the marshaling and interchange yards are not fully suited to an inland port and a considerable amount will have to be spent to improve them. As the port’s plan for this year says, with a touch of understatement, one aim will be to “engage railways to help facilitate business access” to the port.

A huge plus is an airport, which is the country’s main air cargo channel and moved more than 140,000 tonnes in 2010.

The port is still very much in its infancy and depends heavily on government funding to keep going. The budget is still miniscule, with revenue and expenditure measured in hundreds of thousands of dollars.

Ms Gray says that the port’s trade horizons are varied. “Winnipeg companies send half their goods to Canada and half internationally, with the US accounting for 60% of international trade.” In one new venture, a company within the port area is in partnership with a Mexican company to produce avocado oil as a healthier alternative to olive oil.

Main tenants include Boeing, Standard Aero of Dubai and Bristol Magellan.

In Mexico, Hutchison Port Holdings is in a joint venture with Unne for an inland port in Hidalgo province. Jorge Lecona, chief executive of HPH Mexico, says the project is in nine phases on an area of 56ha, with construction works of the first phase completed by the end of October this year.

The construction and development of subsequent phases is dependant on commercial growth in the following years.

Phase 1 has an initial capacity of 225,000 teu a year and will include four 600-metre long tracks to receive up to 12 unitary trains per week. At full capacity the site will be capable of handling 1.1m teu/yr with eight 1500-metre long tracks that are capable of serving at least 35 weekly unitary trains.

“Our main market is Mexico City,” says Mr Lecona, “and the surrounding urban area, the most dynamic economic region in the country, which represents 40% of the imports of containerised cargo coming through Mexico’s main ports. In the long run, HPH Mexico is also aiming to gain market share from NAFTA traffic crossing the northern US-Mexico border. The facility will provide an efficient and attractive platform for rail carriers in order to increase their NAFTA intermodal traffic.”

Another advantage, says Mr Lecona, is that the site is within the limits of the metropolitan area of Mexico City and the only intermodal facility in Mexico City, Pantaco Terminal. “This terminal suffers from significant congestion and inefficiency given the fact that it has to cross congested and highly populated areas of Mexico City. TILH can absorb the diverted congested cargo.”

All train tracks will be served by rubber-tyred gantry cranes, in a combination of two tracks running under the cranes and stacking area plus a loading truck lane, or four tracks and a loading lane.

A distinctive logistical feature will be a direct connection with Mexico’s three railway systems.

In the US, the largest inland port, Centerpoint’s Joliet facility 50 km outside Chicago, continues to rack up steady gains in business and traffic. The 6,000 acres, split between the Burlington Northern and Union Pacific terminals, is both a road/rail interchange (handling 800,000 teu a year at Burlington Northern and even more at the UP facility when it’s at full stretch) and a retail/commercial hub (anchored by Wal-Mart with 305,000 square metres under cover).

Brian McKiernan, vice-president of development at Centerpoint, says that the site is so well-positioned that there is a saving of $100 a container going through the complex compared with the next closest storage facility. “We have also cut down hugely on carbon emissions because we have reduced road transport trips.”

He says that 100,000 square metres of space are being taken up by new tenants each year.

The site lacks an airport – cargo goes through O’Hare and Midway, which are at least 40 km away – but there are moves to establish one at Peotone, which is much closer.

At what is probably the longest-established major inland port in the nation, Virginia’s Front Royal site, business prospects have bloomed in the last five to 10 years. Opened in 1989 and designed solely to relieve the pressure on existing ports – the nearest navigable water is 300km away - it languished because there was too little traffic.

What turned business around was a partnership with local development and economic promotion agencies, that led to big commercial companies setting up distribution centres for the region. Today there are 24, compared with none in 1989. “Total investment is about $700m, while 6,000 people are employed,” says port spokesman Joe Harris.

Total teu handled has risen from 3,000 in 1989 to a peak of 35,000. The facility has more than 5,000 metres of on-site rail serviced by Norfolk Southern, with double-stack trains heading directly to northern cities such as Detroit.

“Trade promotion has provided a whole new customer base and efficiency of routing”, says Mr Harris.