Reprinted from CRAIN'S CHICAGO BUSINESS, December 6, 2004

Rail access to grow at intermodal hubs
Tenants at CenterPoint park near Joliet soon to have another option

Warehouse operators at the sprawling CenterPoint Intermodal Center near Joliet will soon have a choice of freight railroads serving the industrial park.

Owner CenterPoint Properties Trust is building a 2 ½-mile rail line to connect the park's network of train tracks and warehouses to the Union Pacific Railroad's line near the eastern edge of the park. Since the park opened in 2002 on the site of the old Joliet Arsenal, Fort Worth, Texas-based Burlington Northern Santa Fe Railway has been the only railroad serving it.

That left rail-dependent warehouse operators vulnerable to shipping rate hikes or service disruptions at Burlington Northern. CenterPoint considers access to multiple railroads a key selling point for the park, about half of which has direct rail access.

"The intent is to keep a competitive (rail) environment for the occupants of the park and keep a safety valve for getting goods in or getting goods out," says Sean Maher, senior vice-president for development for Oak Brookbased CenterPoint Properties Trust. "If you have more than one railroad, it's a valuable asset."

CenterPoint won't reveal the cost of the branch line, which should be completed by spring. Mr. Maher says the connection with the Union Pacific has always been part of the plan for the park.

CenterPoint and Burlington Northern together have invested more than $500 million in the park. About 1,100 acres is available for warehouse and light manufacturing buildings, with another 612 acres for rail yards. Some 3.4 million square feet of warehouse space has been built; that could grow to 12 million when the park is complete in about a decade, CenterPoint says. The center totals about 2,000 acres, of which about 45% has been developed.

Jeff Conover, vice-president of DSC LOGISTICS, a Des Plaines based freight forwarding firm with more than 1 million square feet of warehouse space at CenterPoint Intermodal Center, says Union Pacific service will enable DSC to reroute shipments away from congested rail yards and seaports on the West Coast.

"That'll open up Northern California ports to us, like the Port of Oakland," he says.

Union Pacific's branch line will carry only boxcars, a spokesman says. The railroad doesn't own land at the park for the cranes and other equipment it would need to provide intermodal service, he says. Burlington Northern will remain the only option for park tenants who ship and receive intermodal freight – containers transferred from rail cars to truck trailers.

Intermodal shipping is surging at the park. From January through October, intermodal lifts – the number of containers lifted off trains or trucks at the park – totaled more than 223,000, up 57% from the same period a year ago. An average of 20,000 automobiles a month also are unloaded or transferred from other rail lines at the park. A Burlington Northern spokesman says figures on boxcar, called "carload," volume are not kept for the park. But the railroad is interested in expanding that business.

"Carload freight represents a huge untapped opportunity out there," he says.
© Copyright December 6, 2004. Crain's Chicago Business. All rights reserved.

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