www.dcvelocity.com FEBRUARY 2019 DC VELOCITY 47
WHY GO INLAND?
Seaports typically develop inland ports to help them address
several common challenges. Some are operational, while
others are related to business development. The reasons
include:
One way to address that, Kemmsies says, is by quickly
moving containers out of the terminal. But waterfront
space is scarce, expensive, and subject to numerous restric-
tions on development. Moving some containers inland,
where land is not only available at lower cost but may also
be closer to the consignees, provides cost and efficiency
benefits for both the seaport and importers. (Kemmsies
notes that it’s not always necessary to be far away; some sea-
port-owned “inland” ports, such as Baltimore’s Tradepoint
Atlantic, are quite close to the docks.)
b They need to be competitive. Shippers can choose from
any number of seaports as gateways for moving their con-
tainers, so ports have to compete for their business. By
operating an intermodal facility at an inland location, port
authorities say, they can help shippers use rail to bypass
congested roads in urban seaport districts; shorten the
distance between the plant or distribution center and the
container pickup/dropoff location; and access scheduled,
predictable service with large-scale capacity. All of this
reduces shippers’ transportation costs and uncertainty,
which in turn enables port authorities to attract new busi-
ness and potentially capture additional volume from exist-
ing customers.
b They need to protect their geographic market share. In the
crowded East Coast market, seaports’ hinterlands overlap.
Depending on their product and location, importers and
exporters in the Midwest could ship through multiple
seaports at comparable costs. “Bringing the port to the
customer” helps seaports compete for hinterland traffic,
according to New Harbor Consultants’ 2016 report Inland
Ports: On Track for Growth.
b They need to reduce congestion and environmental
impact. Road congestion, which clogs streets and increases
air pollution, is a problem around many U.S. seaports.
Moving inbound and outbound freight by rail reduces
both impacts. That’s the thinking behind the Georgia Ports
Authority’s new Chatsworth facility, which will reduce
the need for northwest Georgia shippers to route exports
bound for Savannah, located in the state’s southeast corner,
through metro Atlanta by truck.
WHAT’S IN IT FOR SHIPPERS
For an inland port to be successful, the economic value
proposition must be strong for all parties: the seaport that
owns and operates it, the railroad that connects the inland
and marine terminals, and the importers and exporters that
move their containers through the inland port.
“Everybody should be able to jointly see a true growth
opportunity,” Kemmsies says. But shippers may be the
linchpin. Commitments from large importers or exporters
with consistent container volumes—what he calls “anchor
tenants”—are critical to ensure that the facility has the
minimum number of “lifts” needed to cover the railroad’s
operating costs, he says.
There are several reasons why importers and exporters
might want to make those big commitments. Being able to
pick up and deliver containers to a facility that may be just
a few miles or minutes away, rather than travel 200-plus
miles and several hours to a seaport, produces cost and
time savings that are hard to overlook. There’s also less
traffic congestion out in the country, and some intermod-
