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BNSF’s Elwood, Ill., yard represents new trend

(The Chicago Tribune posted the following article by James P. Miller on its website on February 9.)

CHICAGO, Ill. -- On the grounds of the former Joliet Arsenal in Elwood, a mile-long Burlington Northern and Santa Fe Railway freight train sits silently while rail workers use heavy equipment to load it with cargo for the 70-hour transit back to Los Angeles.

The winter air is filled with the din of revving engines and grinding gears, the thud of cold metal against cold metal, and a chorus of high-pitched warning beeps trucks emit when they back up.

The spanking-new 621-acre railyard known as BNSF Logistics Park Chicago opened only a few months ago, and the surrounding landscape is still raw with the scrapes and gouges of ongoing construction.

"This place is still in its infancy," says BNSF spokesman Steven Forsberg. The site's developer already has built a million square feet of warehouse space nearby, and a number of other logistics-related structures are to be erected over coming years.

This railport, 45 minutes southwest of the Loop, is in the vanguard of a key trend starting to take hold in the transportation industry: For the first time, some of the nation's leading railroads are establishing operations well outside of major cities.

Chicago, the nation's rail hub, will get a second such facility when Union Pacific completes a 1,000-acre site some 80 miles from the Loop. Such outlying facilities represent a major shift. Since before the Civil War era grimy and noisy freight railyards have provided part of the industrial heart beat of America's urban centers.

Now railroads are starting to construct freight-handling facilities located -- much like airports -- well away from the city. That means thousands of blue-collar transportation-related jobs will be created in the countryside, rather than in metropolitan Chicago.

Why the switch? A number of developments are at play, including the rise of Asia as a global manufacturer, shifts in U.S. demographics and the rising cost of urban real estate. But experts say the primary driver is the surging growth of "intermodal" hauling, which brings together the strengths of both rail and truck hauling.

"As you integrate rail and truck service, it becomes less advantageous to be in the middle of the city, and more advantageous to be near the highways," explains Vann Cunningham, BNSF's assistant vice president of economic development.

The integration has bound together truckers and rail carriers, rival industries which have historically competed fiercely in the long-distance freight-hauling business. Truckers boast that their service is more flexible, because trucks can go anywhere there's a road.

For high-volume jobs along fixed routes, however, trains enjoy a big cost advantage. "The long haul is where the advantage really lies, and the longer the better," says BNSF's Forsberg Intermodal service also often hooks up with another cheap transportation standby: ships. The process often begins in ports like Hong Kong or Singapore, where ships are loaded with 40-foot metal containers filled with computers, TVs or other manufactured goods.

When the ships arrive in ports like Los Angeles or Seattle, the containers are unloaded and then, without ever being opened, placed onto the flatbed cars of trains.

What follows is the freight-hauling equivalent of the airline industry's hub-and-spoke system. Stopping only to swap crews and refuel, trains haul the containers to Chicago, the only city where all major U.S. rail lines come together.

The big metal boxes are then off-loaded onto trucks, which, in turn, fan out and carry the containers the last few hundred miles of their journey.

In addition, the railroad is using the Elwood site as a hub for its extensive automotive operation, which carries Asian-made cars to the heartland and also hauls new vehicles from U.S. factories.

Efficient as it may be, the system used to have a few bugs. With downtown railyards, trucks contend with congested city traffic on their way to pick up loads, and on their way out as well.

And urban railyards, many dating back to the 1800's, are simply too small to handle today's longer trains. Breaking down and rebuilding a train can add as much as 24 hours to turnaround times. "They're really 19th century railyards adapted as best as they can be for a 21st century transport system," explained John Gates, CenterPoint's chief executive and co-chairman.

That's why BNSF signed on early to be the anchor tenant for the intermodal center being built at Elwood. Centerpoint Properties Trust's plan calls for the transformation of more than 2000 acres of land near the shuttered Joliet Arsenal.

As it happens, Burlington's main rail line to the west coast runs right past the arsenal, which churned out high explosives for the military from the 1930's until it was closed in 1976.

Oak Brook-based CenterPoint focused initially on building the infrastructure its rail customer would need; among other things, it laid 38 miles of track.

"This is no small undertaking," says Gates.

But, Gates emphasizes, because no jobs are being transferred out of BNSF's existing yards and because Chicago simply couldn't host such a mammoth site, "these jobs aren't coming from the city, nor would they ever be jobs the city could see."

CenterPoint also is constructing a 1,000-acre intermodal railyard for BNSF rival Union Pacific. The UP railroad, after encountering community resistance when it sought to build a yard near far suburban St. Charles, ultimately opted for a site near the rustic hamlet of Rochelle.

By their nature, intermodal yards "are prodigious users of land," notes Gates, and cities simply can't provide the kind of space required. These days, cross-country freight trains are an average of 7,500 feet long. At Burlington's new Elwood facility, which will specialize in international intermodal shipments, the sidings are 8,000 feet long.

The more than one thousand trucks a day that are expected to visit the site once it reaches full use will enjoy quick access to Interstate 55 for north-south routes, and to I-80 for east-west runs -- without the headaches of downtown driving.

BNSF's newest facility will allow the railroad to handle about 400,000 truck-to-train or train-to-truck transfers, or "lifts," each year; that addition boosts the carrier's Chicago-area capacity to a total of nearly 3 million lifts.

With the new intermodal parks, "railroads get economies of scale," says John Spychalski, professor of business logistics at Pennsylvania State University's Smeal College of Business. With the new design, he says, "you minimize the cost of yarding the train, and maximize the productivity of your locomotives, your crews and your track capacity."

BNSF, based in Ft. Worth, Tex., constructed its first such intermodal site, known as the Alliance facility, outside of Dallas; over the next decade the railroad hopes to develop more such facilities in the Pacific Northwest, California, and Texas.

Following through with those plans may not be easy, because many suburban locales simply don't want to deal with the truck traffic, noise and other side-effects of an intermodal railyard. While BNSF was lucky enough to spot what it calls "a gem of an opportunity" in the Arsenal site early on, Union Pacific found a home for its planned new intermodal operation in far-flung Rochelle only after a lengthy, turbulent search that went farther and farther outside of Chicago.

The Omaha company's first choice was a site in suburban West Chicago, but community resistance caused UP to drop that bid. That process was repeated in early 2000, when UP was rebuffed by local forces when it tentatively sought to put its facility in the western Kane County town of Maple Park.

Similarly, Norfolk Southern Corp.'s intermodal facility in the Atlanta suburb of Austell opened in 2001, but only after the railroad won a court fight and soothed local interests by agreeing to help fund construction of bridges over rail lines to ease traffic backups, and road-widening programs designed to ease the influx of what's expected to eventually total 1,750 trucks daily.

Still, the advantages of a suburban intermodal site are compelling, railroad officials contend. "Some people would question `Why are you out there?'" in Elwood, says BNSF's Forsberg, "but there are opportunities to create what I would call intelligent growth -- as opposed to the checkerboard pattern we've seen historically because there wasn't a grander vision."

Monday, February 10, 2003

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