Grain News


Inland Ports Help Reduce Traffic Congestion

Date Posted: May 18, 2017

This article is reprinted from the USDA's May 18 Grain Transportation Report.

As one of the largest exporters of grain and other agricultural products in the world, U.S. shippers and carriers benefit tremendously from an efficient transportation and logistics system.

Low transportation costs and efficient transit are vital to the success of U.S. agricultural exporters because their products face highly competitive international markets that can be easily lost to rivals around the globe.

Historical and projected growth in international trade creates the need to increase seaport capacity, improve terminal efficiency, and lessen congestion and delays.

One way that shippers and carriers are coping with congestion is by incorporating inland ports into the supply chain to a greater degree over time.

Inland ports help boost efficiency in the supply chain by diverting some seaport terminal operations and functions to interior locations and by shifting traffic from surface transportation (e.g., truck and rail) to inland waterways.

This article briefly discusses patterns in surface congestion and inland ports.

It also highlights some inland port projects as examples of efforts to reduce congestion by offering new transportation options for agricultural and grain shippers.

Surface Transportation, Congestion, and Inland Ports

The United States relies heavily on surface transportation to ship freight.

In 2015, of the 18.1 billion tons of goods moved over the Nation’s highways, pipelines, railways, and inland waterways, over 73 percent went by truck and railroad.

The U.S. Department of Transportation (DOT) projects total freight traffic could increase to 25.3 billion tons (a 40 percent increase) by 2045.

Without operational improvements or additional capacity, such growth in freight demand increases congestion, especially in bottleneck areas where freight and passenger service overlap.

As busy centers of commerce, inland ports help lessen overall congestion in the transportation system. They act as hubs, providing additional markets to collect and ship products; help accumulate shipments for further distribution; and move traffic between modes.

The examples below discuss inland port investments and ingenuity to improve facilities and services to reduce congestion at busy land-locked seaports.

These efforts represent innovative ways that mitigate congestion and provide additional options for agricultural and grain shippers.

Snapshots of Projects and Characteristics at Inland Ports Container-on-Barge on the Mississippi River: With funding from DOT’s Maritime Administration (MARAD), several inland ports along the inland waterway are involved in projects to implement “container-on-barge” services (see figure 1).

These efforts make use of the Mississippi River system and its many tributaries, such as the Illinois, Ohio, Missouri, and Arkansas Rivers, which can lessen surface congestion by moving containers over water instead of by truck or rail.

To highlight one example, in October 2016, MARAD awarded America’s Central Port (located in Granite City, IL) $713,000 for an 18-month demonstration project to provide shuttle service for agricultural customers moving containerized exports between southern and northern Illinois to access the Union Pacific and BNSF rail ramps.

The shuttle service operates on the Illinois and Mississippi rivers between Channahon, IL, and Granite City, IL, with an option to extend container-on-barge service to Gulf of Mexico ports.

The project, which runs along the Interstate-55 (I-55) corridor, has potential to reduce highway congestion. According to MARAD, “The I-55 Corridor has about 35,000 trucks daily in Illinois.

"This project would provide relief between Peoria, IL and Chicago, IL as about one-third of the containers move between these points along I-55 to/from rail heads.”

Furthermore, covering more territory on the Mississippi River system, the “M-55/M-35 Container on Barge Project” (sponsored by the City of St. Louis Port Authority and several other partners) aims to facilitate containerized shipping along much of the Mississippi River, between New Orleans, Minneapolis, and Chicago, with scheduled stops along the proposed route in Memphis and St. Louis.

United States Army Corps of Engineers’ data indicates that more than 20 million tons of grain passed through St. Louis by barge in 2016.

As the northernmost point on the Mississippi River that is ice-free all year, the Port of St. Louis is a key facilitator of up- and down-stream traffic.

The port can utilize its facilities and network to handle large amounts of grain and container shipments, warehouse, and transfer containers to other modes of transportation.

St. Louis has access to six major rail carriers and interstate highways.

Inland Empire: A Satellite and Logistics Center for the Southern California Ports: The Port of Los Angeles and nearby Port of Long Beach (LA/LB) are major seaports for waterborne agricultural trade.

In 2015, these two ports moved more than 15.6 million metric tons (mmt) of agricultural cargo (imports and exports), almost all containerized.

The area has long faced heavy congestion with limited space to expand.

At the same time, increasing vessel size and growth in international trade put additional pressure on the ports to add capacity.

Both ports are actively working with terminal operators, harbor truckers, railroads, and the shipping industry to arrange new services, incorporate locations, and shorten times to move containers inand-out of terminals.

Busy seaports have been able to increase capacity through the expanded use of inland facilities and services.

The Inland Empire, located 50 miles east of the Port of Los Angeles, is a metropolitan area (more than 27,000 square miles) with a population of approximately 4 million.

The region functions as “satellite” inland ports to lessen congestion at the seaport terminals.

It does this through cost-effective facilities, an abundant labor pool, certain value-added functions (e.g., customs and inspection, sorting, and re-packing, etc.), and connections to highways and major railroads (e.g., Alameda Corridor, BNSF Railway, and Union Pacific Railroad).

With truck-based container operations continuing to grow, the Inland Empire’s logistics zones, intermodal facilities, and transloading distribution centers ease surface congestion for the Southern California seaports.

Periodically, studies have examined the feasibility of creating short-haul rail service to shuttle containers between Inland Empire facilities and the ports of LA/LB.

Inland Ports Expand Options in Pacific Northwest (PNW): The PNW is another important location for grain exports, accounting for over 28 percent of all grain inspected for export in 2016.

Its inland ports help ease and re-route (when necessary) possible congestion in the area.

The Columbia/Snake River system and its adjacent grain facilities help accumulate and move regional grain production from Washington, Oregon, Idaho, and other States.

The tributary, along with rail and truck, create a supply chain network that connects seaports, inland ports, and other facilities to transport bulk and containerized cargo, allowing shippers to mitigate potential bottlenecks with ingenuity and adaptability.

For example, during the 2015 port disruptions, some traffic in the PNW had to be re-routed in order to mitigate congestion and ensure delivery.

In one case, the inland port in Lewiston, ID, typically sends some traffic via the Columbia River to the Port of Portland.

With the Port of Portland affected by the disruptions, Lewiston facilitated a connection to the inland Port of Morrow, which then used its railroad access to reach export facilities in Puget Sound.

New Container Rail Ramp at Minnesota and Wisconsin Twin Ports: Late last March, the Canadian National Railway (CN) opened the first intermodal container rail ramp in the Twin Ports of Duluth, MN, and Superior, WI, boosting the area’s intermodal capabilities and container shipping.

A collaboration between CN and Duluth Cargo Connect (a partnership of the Duluth Seaway Port Authority and Lake Superior Warehousing), the project could result in savings to agricultural and forest product exporters, reduce congestion, and expand markets for shippers.

This new option could lower costs for regional Midwest shippers, because of its shorter distance compared to longer-distance truck hauls to hubs in Minneapolis/St. Paul and Chicago.

In addition, the Duluth Seaway Port Authority has seen tremendous growth in truck traffic in recent years; thus, the effort could mitigate congestion by shifting traffic from truck to rail.

According to the Midwest Shippers Association, “[f]ood grade soybeans destined for Southeast Asia…were among the first containers shipping from Duluth.”

Conclusion

Low transportation costs and efficient transit times are vital to the success of U.S. agricultural trade.

This article introduced examples to show that, through diligent collaborations among stakeholders, inland ports can provide an effective means to lessen congestion.

For instance, they divert seaport terminal operations and functions to alternative interior locations.

Through a variety of innovative projects, inland ports can also improve and refine the current transportation system, creating a well-designed supply chain network.

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