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Aug.7, 2017

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SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 42 THE JOURNAL OF COMMERCE AUGUST 7.2017 By Reynolds Hutchins AS GROWTH IN the number of container rail lifts at the top four US East Coast ports has slowed in the past five years, the ports of Charleston and Virginia have gained a larger share of international intermodal volume, a barometer of reach beyond local markets. The Port of New York and New Jersey and the Port of Savannah, meanwhile, have efforts in play that could accelerate the volume and share of railed cargo passing through their terminals. In terms of rail lift share, New York-New Jersey leads the East Coast with a 32 percent share of the rail lifts among the coast's top four ports, according to a Journal of Com- merce analysis of port statistics. Virginia is a close second with 30.1 percent, followed by Savannah with 22.2 percent, and Charleston with 15.5 percent. Those shares have been in flux over the past half-decade, with New York-New Jersey dropping 3.7 points and Savannah rising and falling in a range of 3.5 points; Charleston and Virginia have risen 5.4 and 1.9 points, respectively. The changing landscape for international intermodal rail reflects the fierce competition among US East Coast ports to attract away from the West Coast discretionary cargo into and out of points east of the Ohio Valley. Rail lifts are hardly the only barometer of a port's access to the hinterland, as much volume is moved via trucks, for example, from Savannah to Houston and from New York-New Jersey into Pennsylvania. Charleston, whose rail volume is pri- marily export-driven, saw its share of intermodal rail lifts increase from 10.1 per- cent in 2012 to 15.5 percent in 2016, largely coinciding with the completion of its first inland port feeding the state's automo- tive industry. Virginia, on the other hand, has kept its rail volume roughly balanced between imports and exports, but saw its share of rail lifts increase from 28.4 percent to 30.3 percent in the same period — some- thing port officials peg on Virginia's success building direct and discretionary business thanks to its proximity to population centers in the Midwest and Northeast. The top East Coast port, New York-New Jersey, saw seen its market dominance and intermodal share at the largest Atlantic gateways slide from 35.7 percent in 2012 to 32 percent last year. Meanwhile, Geor- gia's Savannah has managed to maintain its intermodal market share among the top ports, floating in the same 3.5 point range between 22 and 25 percent for the past five years. Both of those gateways, however, are confident that multimillion-dollar invest - ments in near-dock and on-dock rail facilities will encourage more of their customers to put more cargo on US railroads. The new efforts come as total inter- modal volume growth at East Coast ports decelerates. Between 2012 and 2016, the top four US East Coast ports increased their total rail lifts 39.1 percent, from 1.2 million in 2012 to 1.7 million last year. The rate of that growth, however, started to deceler- ate in 2015. After intermodal rail lifts at the top four ports swelled 12.7 percent between 2014 and 2015, the rate of growth dropped to just 3.3 percent between 2015 and 2016. Railroad analyst Tony Hatch of ABH Consulting said he doubts shippers will shift more cargo from the West to the East Coast unless transit times and rates through the Panama or Suez canals decrease. "The East Coast shift has for the most part happened already," Hatch said. "More busi- ness is certainly coming through East Coast ports. That's probably true, but that started years ago and hasn't changed noticeably." West Coast ports since 2005 have lost 12 percentage points of market share of US imports from Asia, falling to 66.8 percent REACHING INLAND Charleston and Virginia ports gaining discretionary rail cargo Georgia Ports Authority/Stephen B. Morton

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