Rail intermodal - the transporting of shipping containers and truck trailers on railroad flat cars - is on a roll and growing rapidly. In fact, according to the Association of American Railroads, U.S. rail intermodal volume in 2013 was a record 12.8 million containers and trailers, breaking the previous record set in 2006. Given a convergence of events that are happening in Florida that impact intermodal rail, Florida East Coast Railway (FEC) is well positioned to capture increased volumes of traffic and help speed containers to market. FEC, a 351-mile freight rail line located along the east coast of Florida, is the exclusive rail provider for PortMiami, Port Everglades, and Port of Palm Beach. Its system connects to the national railroad network in Jacksonville, and provides carload and door-to-door intermodal solutions across North America to customers who demand cost-effective and premium quality service. In an exclusive interview with this AJOT reporter, FEC President and CEO James Hertwig outlined some of the big news FEC has been experiencing and the impact this will have on shipping in Florida. That news centers on PortMiami and Port Everglades. Infrastructure Improvements Recently PortMiami has been undergoing a number of significant improvements to facilitate better traffic flows to and from the seaport. One is a tunnel, completed in July, which connects the island port to the interstate system rather than having to go over a bridge. “Today the trucks come down Interstate 95, get onto Interstate 395, and enter a tunnel off an interstate highway,” Hertwig describes. “They then go right onto the port. This allows for more efficient passenger and truck traffic to and from the port.”
FEC President and CEO James Hertwig
FEC President and CEO James Hertwig
Other big activity at PortMiami includes the $77 million of state funds from Florida’s transportation budget to deep dredge the port to 50 feet in order to accommodate the post-Panamax vessels that will be transiting the expanded Panama Canal after its completion in early 2016. “They could not get the money from the feds, so Florida Governor Scott took the money out of the state transportation budget and gave it to PortMiami,” Hertwig explains. “As of the end of 2015, PortMiami will have 50 foot water – just in time for the Panama Canal expansion. This means it will be one of three ports on the East Coast that will be able to accommodate the post Panamax ships: PortMiami, Norfolk, and Baltimore.” FEC’s developments at PortMiami result from $9 million coming from a $23 million Transportation Investment Generating Economic Recovery (TIGER) II grant from the federal government, $9 million from the State of Florida, and $5 million from Miami Dade County to build out PortMiami and surrounding infrastructure to facilitate better traffic flows. “Our portion was to construct an on-dock rail loading facility on PortMiami,” reveals Hertwig. “That facility makes it possible for us to load out of PortMiami, come across the bridge, and then go up to our railroad.” FEC’s railroad ramp is about seven miles from downtown Miami in Hialeah. FEC’s portion of the improvements was to upgrade that track. “We have completed that entire loading facility in August of this year,” says Hertwig. Consequently, today FEC is loading trains out of PortMiami and moving cargo to various places along its network. The operation was originally started in October last year, but FEC only had a limited amount of track for loading because the railroad was still in the middle of construction. “Initially, we handled new business into central Florida since prior to this time we could not compete with traffic going into places like the Orlando area,” Hertwig says. Orlando is predominately served by the Ports of Savannah, Jacksonville, Miami and Port Everglades. “All of those shipments were being trucked,” he adds. Now shippers like big box retailers Wal-Mart and Target stand to benefit from the improvement since they can bring cargo north up Florida’s East Coast on FEC’s rail line rather than transporting shipments via truck. Previously, the practice was to stop at seaports to the north and truck cargo down to South Florida. “By building the on-dock rail at PortMiami, we are able to capture new business because we can rail it right out of the port to our facility in Cocoa,” he says. “And then it’s only a 35 mile ride to Central Florida. Even more significant, those shipments can move beyond to places like Charlotte or Jacksonville, be handled one time and not be trucked from the port over to our Hialeah railroad ramp. This saves time and money.” In July, FEC also opened its new, state-of-the-art intermodal container transfer facility (ICTF) adjacent to Crowley Maritime’s Port Everglades terminal. “That was a public private partnership with the state in which the state gave us an $18 million federal grant,” Hertwig reveals. Broward County put in $20 million worth of land that increased the acreage of the facility from being relatively small to 43 acres. The balance of $35 million was put up by FEC to build the ICTF that increases its lift capacity from 100,000 lifts annually to up to 500,000 to 600,000 lifts. Ground was broken on the ICTF in January 2013. Its official opening was July 15, 2014. “This creates a lot of opportunity for growth in the future at Port Everglades,” Hertwig remarks.
Aerial view of the FEC Intermodal Yard at Port Everglades, FL
Aerial view of the FEC Intermodal Yard at Port Everglades, FL
Capacity Solutions Overall, Hertwig believes that FEC is well poised for much opportunity, particularly given cargo demands for Florida’s population. The area between Central and Southern Florida is home to some 13 million people – the largest population other than the New York City metropolitan area. In addition, Florida sees over 90 million visitors per year. “This makes Florida a high consuming state with a lot of cargo from Asia being imported,” he states. Add to this, FEC’s rail service makes it possible to service the entire state of Florida overnight and the Atlanta and Charlotte markets in two days. “This gives the steamship lines increased opportunity to load cargo onto those big ships and cover the entire southeast of the United States,” Hertwig says. Intermodal service is particularly critical given today’s capacity tightness in the trucking industry. “Trucking capacity is only going to get tighter in the next several years,” Hertwig claims. “Rail is the most efficient way to move cargo. With the type of service we provide into the southeast, there will be a tremendous advantage for our railroad coming from the south Florida ports.” An added benefit, Hertwig points out that Flagler Global Logistics, a company owned by Florida East Coast Industry (FEC’s sister company), recently built warehousing immediately adjacent to FEC’s intermodal facility in Miami. Its first building is some 170,000 square foot with another 400,000 square foot warehouse and distribution coming on line soon. “Since the cargo is not transported on public highways, it can go quickly to those warehouse and distribution centers and be processed,” he says. The facility also helps save costs and repositions ocean containers that otherwise would go inland. “The cost of repositioning them out is expensive. What they can do is transload three of those 40 TEU containers into two domestic 53 foot containers. This creates a perfect marriage in that those containers are just waiting down there to gather up a load.” The effort is similar to what is done on the West Coast where cargo is trans loaded and moved in 53 foot containers back to the East Coast. “We can put the empty back on the ship so that they can go back to Asia and get another load,” he says.
FEC doublestack train on the dock at PortMiami
FEC doublestack train on the dock at PortMiami