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Dec.14, 2015

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SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 52 THE JOURNAL OF COMMERCE DECEMBER 14.2015 By Mark Szakonyi AN INTERMODAL TERMINAL service at the Port of Mobile will open in May, giving the port its first intermodal rail connection in roughly a decade. Alabama State Port Authority, APM Terminals and CN are betting shippers will use Mobile to move imports into the Midwest, after being burned by U.S. West Coast port congestion from mid-2014 to early this year and seeing congestion flare up at East Coast ports such as New York- New Jersey and Virginia. CN has a proven track record of helping to create alternative gateways for U.S.-bound cargo out of ports not on most shippers' radar, having aided in making Prince Rupert, British Columbia, North America's second-fastest-growing port. "If East Coast and West Coast (ports) work extremely well, then it will be dif- ficult for Mobile to have a role, but if there is disruption, which typically there is, then a fluid gateway from the Gulf would have traction for some" shippers, J.J. Ruest, CN's chief marketing officer, told The Journal of Commerce. The success of Mobile's effort to become more than a port feeding its local market hinges on delivering shipments rapidly and reliably to the hinterland. CN trains departing daily from the $56 million ter- minal — a six-minute dray from APM Terminals' facility — will arrive in Chicago on the third day. When demand picks up enough to require dedicated intermodal services, those trains will roll into the United States' largest freight hub on the second day. The speedy transit time goals are possible because of CN's unique network that cuts through the Heartland via Memphis, Tennessee, and Chicago, before branching out toward Detroit and Toronto to the east, and Min- neapolis/St. Paul and Winnipeg to the west. "CN is the ideal partner for Mobile," port CEO James K. Lyons said. The railroad's net- work "hits a sweet spot for Mobile" that will allow the region to attract new distribution centers and manufacturers. The port hasn't been served by intermodal rail services for at least a decade because of industry consoli- dation that spurred carriers to pull services, he said. Containers will move to and from ships calling the terminal and the rail facility within two to three days, giving shippers reliability they won't often get at many other U.S. ports and a cushion against less-than- predictable ocean sailing transits, Ruest said. Within two years, CN wants one-out- of-four containers moving across the APMT docks to be pulled by its trains. The dray between the APMT facility and intermodal terminal, funded through state money and a $12 million federal grant, is about 6 ½ minutes. That haul will be cut by about five minutes when a harbor truck-only bridge connecting the two facilities opens in about 2 ½ years, Lyons said. CN's services also likely will make Mobile more attractive to U.S. exporters. Supervalu International is interested in the new CN services because the grocery retailer has found it's cheaper to move goods from the Midwest through Mobile than via East Coast ports, Mark Ferguson, direc- tor of logistics, told the JOC. The costs of transloading in Mobile are also reasonable, he said. "Supervalu has a (distribution center) in Quincy, Florida, which is near Mobile, from which we can draw product directly and have the option of loading contain - ers from directly as well," Ferguson said. "When using that DC today, we have to work through Jacksonville or Miami. Mobile could give us a competitive edge over oth- ers currently operating out of Miami." The potential for a "third coast" option for discretionary cargo, is heightened by Mobile's ability to handle the larger ves- sels that will be able to move through the expanded Panama Canal next spring. With a 45-foot depth, plus an extra two feet of water at high tide, APMT Mobile can handle vessels capable of carrying up to 13,000 20-foot-equivalent container units, said Brian Harold, managing director of the facility. Some of the operational savings gained through the deployment of larger vessels moving Asia goods are expected to be passed on to shippers, giving them another reason to shift some imports away from the West Coast. Because its local population is dwarfed by other coasts and handles little discre- tionary cargo, the Gulf Coast's share of U.S. imports has fallen dramatically since the labor showdown between dockworkers and U.S. West Coast employers from mid-2014 to late February 2015. In January, Gulf Coast ports handled 7 percent of inbound containerized goods into the U.S., but that has since fallen to a 5.5 percent share, according to data from PIERS, a sister company of The Journal of Commerce within IHS. Thanks partly to shippers diverting cargo away from West Coast ports, con- tainer traffic at Mobile, the third-busiest U.S. Gulf container port, rose 8 percent year-over-year in the first nine months of the year to 123,022 TEUs. Houston and CN RAIL ENVISIONS US GULF GATEWAY Set to open in May, the railroad's new Mobile terminal is designed to move import containers into the Midwest "CN is the ideal partner for Mobile."

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