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VOL. 128 | NO. 3 | Friday, January 04, 2013

Norfolk Southern Increases Activity

By MICHAEL WADDELL

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Norfolk, Va.-based Norfolk Southern Corp. expects to continue increasing operations this year at its new Memphis Regional Intermodal Terminal in Rossville, just east of Collierville.

Following a soft opening for the $105 million, 380-acre facility last July, Norfolk Southern has now completed the transition of its domestic services to the hub and eyes increased business during 2013.

The yard is currently rated to handle about 200,000 lifts per year.

“We opened in July, and by the end of the year we were at a run rate of about 50 percent capacity utilization,” said Mike McClellan, Norfolk Southern vice president of intermodal and automotive marketing. “Beginning in January of this year, we are launching new services out of Rossville that we expect will increase our business, and they will all be rolled out in the first half of the year.”

New services will include a 36-hour schedule for shippers from Memphis to Greencastle, Pa., and a new direct service from the Northeast to Memphis that will be roughly a day faster than the current service available to the Memphis market.

When the rail yard held its soft opening last summer it was only running one service per day, but the company has now completed the transition of all of its domestic services from its Forrest Yard in Memphis.

“Our international services are going to remain at Forrest yard for the time being,” McClellan said.

A small amount of work still needs to be completed before the new yard is 100 percent finished.

“I would describe the work that needs to be done as clean-up work. There are some utility services that still need to be provided as well, but there is nothing there that impedes our ability to operate,” said McClellan, who explained that further expansion is planned for the yard. “The plan ultimately envisions more than doubling the capacity at the Rossville facility.”

The facility in Fayette County is the southern end of the Crescent Corridor, which runs from Memphis east through Tennessee and up into the Northeast.

“Memphis is part of a larger project called the Crescent Corridor, and we are expecting that to involve the construction or expansion of six facilities in Rossville; Charlotte, N.C.; Birmingham, Ala.; and Greencastle, Harrisburg and Rutherford in Pennsylvania,” McClellan said. “We expect to see a significant impact from those investments as well as from the line of road investments we’ve made.”

City officials expect the upcoming completion of the Interstate 269 loop around the city to be a boon for the rail yard.

“The Norfolk Southern railroad is going to benefit from the 269 highway,” said Dexter Muller, senior vice president of community development at the Greater Memphis Chamber. Interstate 81 in East Tennessee “connecting to I-40 contains the highest percentage of truck traffic of any highways in the country, and they are very congested. The belief is that by improving the rail corridor between Memphis and the Northeast it will remove roughly 1 million trucks from the road.”

William Adair owns thousands of acres adjoining the Norfolk Southern yard, and early last year he selected Sacramento, Calif.-based Panattoni Development Co. Inc. as the developer for the industrial component.

Adair’s WCA Land & Development and Panattoni formed a joint venture to develop nearly 1,500 acres of industrial property surrounding the intermodal facility, primarily on the east and south sides extending to Miss. 302 in Marshall County. Approximately 475 acres are designated for industrial use in Fayette County and another 1,000 acres are in Marshall County.

CB Richard Ellis Memphis represents both parties in the listing of the property, which has been named the Gateway Global Logistics Center.

“The Norfolk Southern yard and the access road that comes off of Highway 72 that feeds into the Norfolk Southern terminal were completed last year, and we are really just in the initial stages of starting to make the site ready for development,” said Tommy Jackson, CBRE Memphis senior vice president.

Companies can either buy acreage outright and build their own facilities or let Panattoni handle the construction of the buildings, which then can be either bought or leased.

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