Monday, September 17, 2012

Virginia sorts out port's rail jam; pushes out proposal deadline for private terminal operations

Executives from the Virginia Port Authority and port operator Virginia International Terminals recently met with Norfolk Southern and CSX, the two big East Coast freight carriers that serve APM's facility, along with officials from Commonwealth Railway, the shortline railroad whose locomotives pull Norfolk Southern and CSX trains in and out of the Hampton Roads' APM terminal.

They were discussing the rail traffic back-up on the weekend of Aug. 11-12, when APM's major container facility in Portsmouth was hit with an unprecedented railroad backup. The Monday after the weekend, a two-and-a-half-mile-long empty intermodal train still sat unmoving on one of the two tracks along Va. 164 and nothing near APM's terminal was moving by rail.

In fact, CSX had to reroute a train to Portsmouth Marine Terminal in order to unload it and truck the containers to APM.

"It's the first time we reached a point of gridlock," said Joe Harris, a Port Authority spokesman.

Rail is paramount to the Hampton Roads terminal's potential growth, vital for transporting cargo to and from inland markets such as the Ohio Valley and Chicago. APM is the sole terminal at the port with on-dock rail connections to both Norfolk Southern and CSX, via Commonwealth.

One of the solutions to come out of the meeting is Commonwealth's strategy to store Norfolk Southern and CSX locomotives at an offsite location, freeing up an 8,000-foot stretch of railcar storage track.

The growth of APM's facility, including increasing its railyard to twice the size it is now, is one of the provisions in an unsolicited proposal APM submitted to the state in the spring, offering to take over the operations of the port for 48 years.

APM is just one proposal the Virginia Port Authority is considering. Several private companies are bidding to take over Virginia's port operations. Although a decision was originally expected in mid-October, Gov. Bob McDonnell and Secretary of Transportation Sean Connaughton have decided to extend the deadline so they can properly evaluate the proposals instead of rushing to choose the preferred operator.

Detailed proposals, expected from APM, VIT, the Carlyle Group, a private equity firm, and RREEF, a unit of Deutsche Bank, are due Nov. 1. The preferred operator or operators will be recommended at a port authority meeting on Nov. 27, and the final deal, which could be with one or a combination of providers, won't be cemented until next year.

For more of the Virginia-Pilot stories: hamptonroads.com

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