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Norfolk Southern officials say the equipoise at a rail intersection could be upset by a memorandum of understanding signed earlier this month by CSX, the city of North Charleston and a local developer. The agreement calls for a new intermodal terminal serviced by CSX track to be built at the southern end of the former North Charleston Navy Base.
By Daniel Brock
dbrock@scbiznews.com
Published Aug. 30, 2010
Five times a week, Sunday through Thursday, Norfolk Southern Corp. hauls trains to Charleston from BMW Manufacturing Co.’s Upstate plant in Greer.
Often, it’s a smooth trip for the 500 German-engineered cars and SUVs on board. But on the final leg of the journey, just after the steel caravans exit Norfolk Southern’s Seven Mile Yard in North Charleston, they reach a bustling crossing where the Norfolk Southern line bisects a trio of CSX Transportation-owned tracks.
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| Top: Norfolk Southern’s Seven Mile Yard in North Charleston lies just north of the SY interlocking. The yard is Norfolk Southern’s regional intermodal hub. |
CSX controls the right of way at the SY interlocking, the junction’s name in railroad parlance, and Norfolk Southern typically is forced to wait 30 to 45 minutes for its competitor’s trains to clear the intersection before proceeding southbound toward the S.C. State Ports Authority’s terminal at Union Pier.
Farther down the peninsula, the BMW-laden trains utilize about a mile of CSX track — for which Norfolk Southern pays a usage fee — before S.C. Public Railways takes over and hauls the train cars into the terminal. There, the BMWs are unloaded and shipped to more than 120 markets worldwide.
Norfolk Southern and CSX say that’s how the rail business works. There are stops and goes, and the two companies — Class I railroads and the East Coast’s leading rail carriers — often strike a delicate give and take over fixed routes.
“We work through service challenges with Norfolk Southern and other connecting lines all the time. It’s just a routine part of our business,” said Fredrik J. Eliasson, a CSX vice president.
Railroad crossings
Norfolk Southern officials say the equipoise at the SY could be upset by a memorandum of understanding signed earlier this month by CSX, the city of North Charleston and a local developer. The agreement calls for a new intermodal terminal serviced by CSX track to be built at the southern end of the former North Charleston Navy Base.
Under the plan, CSX’s Cooper Yard and the Macalloy property, owned by Shipyard Creek Associates, would be turned into a state-of-the art rail yard and warehousing operation.
According to Norfolk Southern officials, placing a facility on the Macalloy land would cause a logjam, grinding to a halt the flow of cars for one of the port’s and the state’s most vital manufacturers. After making their regular progressions through the SY, Norfolk Southern trains would be impeded by CSX trains exiting the new yard, leaving Norfolk Southern cars hamstrung and blocking two miles of crossings along Meeting Street Road.
Norfolk Southern officials say CSX wouldn’t let it through the SY until the Jacksonville, Fla., carrier’s trains had exited the Macalloy site. That could mean delays of several hours, which in the time-sensitive world of cargo shipping would be disastrous, according to Steven A. Evans, a vice president in Norfolk Southern’s Ports and International Department.
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| CSX tracks enter the carrier’s Cooper Yard, while Norfolk Southern’s line bisects them, forming the SY interlocking. (Photos/Leslie Halpern, Andy Owens) |
“And in 33 years working with a railroad, I can tell you: Working with their facilities, they’re going to prioritize their trains,” Evans said.
Eliasson, on the other hand, doesn’t see the situation as anything unusual.
“What they’re pointing at sounds to a layman like a potential issue, but operationally for a railroad, this is what we do for a living all the time,” he said.
Rolling across S.C.
Numerous threads are woven into the regional commercial rail debate. But Norfolk Southern officials have repeatedly cited the memorandum, which they say could — among a litany of offenses — harm the company’s ability to transport some 130,000 BMWs annually to the Port of Charleston.
And that number will likely increase as early as next year, according to BMW officials. The German company recently announced a $400 million expansion in the Upstate that will eventually see a 50% increase in production and double BMW container traffic through the port.
“Basically, exporting cars through Charleston is vital to our interest,” said BMW spokesman Robert Hitt.
The automotive industry, in turn, is vital to the port: A third of the auto parts shipped through the Southeast come through Charleston. Three of the port’s top 20 commodities in imports and exports are auto-related.
Companies such as Nissan, Michelin, Honda, Daimler, Volvo and Bosch all do big business with the SPA. Mercedes moves 15,000 containers by rail out of Charleston annually to its Alabama plant.
“There is a huge automotive presence in the port here,” said SPA spokesman Byron Miller.
Rail means business
The ports authority maintains that to remain competitive, the Charleston port must be dually served by CSX and Norfolk Southern to give its customers more flexibility. The final plan for commercial rail in the region needs to be acceptable to both rail lines, port officials said.
“Any rail solution should be one that both Class I rail carriers are supportive of and enthusiastic about,” Miller said. “The key benefit of that is that it accrues to our customers. Providing that competitive access is important.”
The port is dually served today and would remain so under the Macalloy plan, though Norfolk Southern warns of logistics problems and inequitable access. BMW, meanwhile, could be heading toward getting caught between the rail carriers over access to the port.
“I’m not sure how much of it is posturing. When you have companies that are competing, it takes a little while sometimes to sort out the best solution,” BMW’s Hitt said. “One would hope that with a significant customer such as us, there would be opportunities to enhance the process, not to make it less time-sensitive.”
BMW has invested $4 billion in the state since announcing its arrival in South Carolina in 1992, the company said.
Hitt said his company wasn’t currently familiar with SY situation, but he added that he hoped the system would become more efficient as the Greer plant grows.
“We would be glad to look at what anybody proposes,” Hitt said, “and see how it can hopefully serve us, the customer, in terms of moving our South Carolina-made product.”
Reach Daniel Brock at 843-849-3144.
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