Aerial view of South Carolina Inland Port
Never let it be said that state ports are not competitive, especially South Atlantic ports. In a recent AJOT article, the North Carolina State Port announced that it would partner with the CSX railroad on the development of an inland terminal. The announcement indicated that they will “participate in the creation of a major rail hub in the Central part of the state of North Carolina”. Prior to this announcement, the port authorities of Virginia, South Carolina and Georgia, created similar inland services for their respective customers.
When the North Carolina facility is operational, the string of inland ports between Virginia and Georgia will be complete. Each state port will have at least one inland depot and each will participate in moving containers between their seaport and the inland facilities for ongoing distribution. Each of these inland state sites will serve customers utilizing their respective seaport facilities.
In their study addressing inland ports, Drs. Jean Paul Rodrigue and Theo Notteboom at Hofstra University located on Long Island, New York, define an inland port, as “A rail or barge terminal that is linked to a maritime terminal with regular inland transport services.” They also indicated in their report that, “In the case of the creation of inland ports, customer costs and service are a primary consideration. However, services and convenience also weigh in heavily.” The study also concludes “An inland port should have a level of integration with the maritime facility (port).” The inland ports of each of the four state ports in the South Atlantic closely follow the report’s conclusions. Cost factors in this equation are offset, since containers destined for an inland port are moved quickly to or from the seaport facility. In this way, the study concludes, that inland ports “support a more efficient access to inland markets and in reality speedup the flow of cargo between ships and major land networks.”
History has demonstrated that inland advantages or lack thereof, can contribute to the growth or demise of a seaport. In the early phase of containerization as example, tariff advantages offset the costs of a twelve hour steam up the Chesapeake Bay to the Port of Baltimore over service to the terminals of Hampton Roads, Virginia that would be followed by a costly truck or rail haul to the customer. Simply put, the cost comparison of the ship‘s time on the Bay was adequately compensated by Baltimore’s advantage in inland cost from the Port to the Midwest. Eventually, this equation was changed dramatically. In a ruling in 1985, rules favoring ocean carrier ship time over a port’s geographic position were instituted and although Baltimore is still a busy container port today, Virginia’s port facilities in Norfolk and Portsmouth have moved comfortably ahead.
Handling cost and storage, not to mention speed of delivery to the customer, can be reduced at non-waterfront facilities. Receiving and delivery of most customers’ containers inland provides availability quickly, in a more convenient location. In most cases, a one-day turn can be realized.
The Virginia Ports Authority has been a pioneer in creating not one, but two inland terminal facilities located away from the primary port area. One of the terminals is a land locked facility, west of Norfolk, located in Front Royal, Virginia. It is approximately 220 miles from the Seaport. The second facility is north of Norfolk at an established marine terminal complex, at the Port of Richmond, Virginia.
The Front Royal inland port was constructed by the VPA on 161 acres of land at a cost of $10m. The facility, operated by the VPA is on the mainline of the Norfolk Southern Railroad, and adjacent to interstate highways 66 and 81. The facility serves markets in Washington, D.C., Maryland, Delaware, West Virginia, Pennsylvania, New York and Ohio. It also houses a 3 door cross dock facility, a chassis pool, a full range of U.S. Customs functions as a port of entry, and provides USDA and SGS inspections as required.
Recently, VPA was awarded a contract to operate the Port of Richmond, Virginia’s marine terminal as the terminal operator, under the name, PCT of Virginia, LLC. The facility, owned by the City of Richmond, was formerly operated for a number of years by Federal Marine Terminals. Not long ago, the terminal handled a direct vessel call from steamship line, ICL but that service was terminated by the line. In an effort to continue all water service to the Port, the VPA contracted with the James River Barge Service to operate a twice-weekly container feeder service from Hampton Roads to Richmond. The service provided directly to the marine terminal is an effective alternative truck transport with excellent distribution and transshipment for shippers in the greater Richmond area. The elimination of the truck service from Hampton Roads provides a great deal of relief to congested roadways I-64, 81 and 70 and contributes to the improvement of air quality. The location of the service at the Port of Richmond improves distribution, as the Port is no more than 750 miles from 50% of the Nation’s consumers.
A second successful inland port project was announced in 2013 by the South Carolina State Ports Authority. The State port, located in Charleston, opened their inland terminal in Greenville, SC. This location is particularly advantageous since it provides excellent access to 95 million consumers within one day’s drive. It also provides an empty container depot for customers shipping via the seaport. The South Carolina facility is open seven days a week, 24 hours a day, providing an average of 23 minutes turn time. It is one day’s travel from the South Carolina waterfront in Charleston and is served by 19 of the Port of Charleston’s 20 ocean carriers.
Rail service to the Greenville facility is provided by the Norfolk Southern Railroad and is positioned along Interstate Route 85, between Charlotte, NC and Atlanta, GA.
With a fourth South Atlantic port’s inland facility in the mix, the question will be, “Can each port sustain its market?” The answer will determined by the proximity of the customer to the inland facilities, the railroads and ocean carriers serving them and the strength of the respective marine terminals in Virginia, North Carolina, South Carolina and Georgia. Even though Drs. Rodrigue and Notteboom indicate that inland terminals are, “a part of a port’s regionalization strategy,” ports show little respect for regionalization.
