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Norfolk Southern pins hopes on intermodal yards

Rail yards where freight is transferred between trains and trucks are a major part of Norfolk Southern’s growth strategy.

Charlotte’s intermodal yard and others that have recently opened are part of the railroad’s $2.5 billion Crescent Corridor project, intended to enhance the railroad’s north-south shipping and distribution capabilities with 2,500 miles of upgraded tracks between New Jersey and Louisiana.

In January, the railroad opened new intermodal yards in Birmingham, Ala., and Greencastle, Pa. Last year, the railroad opened an intermodal yard in Memphis, Tenn., that is twice the size of Charlotte’s at about 400 acres.

In Memphis, officials say they are seeing benefits from their Norfolk Southern facility, about 30 miles from Memphis International Airport.

Dexter Muller, the Greater Memphis Chamber’s senior vice president of community development, said chamber officials use Norfolk Southern’s new, expanded intermodal yard as a selling point when they recruit businesses. They tell companies that shipping finished goods by truck or train will be simple from Memphis, which is also a major air-cargo hub.

“We think it’s not just a case where people are coming and thinking about locating in Memphis, and then once they’re here they see the Norfolk Southern” facility, he said. “We think it’s the other way around.”

Electrolux, which has its North American headquarters in Charlotte, is building an oven and stove factory in Memphis that’s expected to employ more than 1,200 people. The company was lured in part by ease of access to shipping.

And next to Norfolk Southern’s Memphis intermodal yard, a developer is working to create a 1,500-acre industrial development called the Gateway Global Logistics Center. The developer also hopes to build residential, office and retail space near the site.

Charlotte’s new 200-acre yard will initially be able to handle 200,000 lifts, or cargo container transfers, per year, according to Norfolk Southern. That compares with 130,000 a year at the company’s current Charlotte location.

The facility will employ about 160 people, including truck drivers who handle local shipments; this is about the same as the current site. The total could grow to 280 over 10 years if the project is expanded to handle 250,000 lifts per year, Norfolk Southern’s company spokesman Robin Chapman said.

In 2012, Norfolk Southern’s intermodal revenues increased 5 percent to $2.2 billion from 2011, helping to offset a decline in coal-related revenues. Intermodal accounted for about 20 percent of the publicly-traded company’s $11 billion in revenue, which was down slightly from a record $11.2 billion in 2011.

CSX, one of Norfolk Southern’s chief competitors, also is expanding its Charlotte intermodal facility near Rozzelles Ferry and Hovis roads. The company is increasing its lift capacity from 105,000 to 120,000 annual lifts in Charlotte.

Like Norfolk Southern, CSX is also expanding its rail and intermodal network through an $850-million National Gateway project. In 2012, the company’s intermodal revenue grew 11 percent, to $1.6 billion.

Portillo: 704-358-5041; On Twitter: @ESPortillo
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