The Heartland Corridor

According to Norfolk Southern (NS), the Heartland Corridor is the most direct high-capacity intermodal route between the Mid-Atlantic and Midwest (see Figure 40). The result of a $397 million public-private partnership completed in 2010, the corridor connects the Port of Virginia to major destinations in the Midwest including Chicago, Detroit, Columbus and Cincinnati (Federal Highway Administration 2014). The partnership included NS, the Federal Highway Administration (FHWA), and the States of Virginia, West Virginia and Ohio.

The three-year project included the following major components:

The “Central Corridor Double-Stack Project” raised clearances in 28 tunnels and 24 other overhead obstructions to allow the transport of double-stacked intermodal trains between Roanoke, VA through West Virginia, to Columbus, OH; Additional track and intermodal capacity improvements made at the Rickenbacker Airport in Columbus, OH; and new intermodal terminals were built in Roanoke, VA and Prichard, WV.

Figure 40

Prior to the Heartland corridor, NS was forced to use the Norfolk & Western main line across Virginia, southern West Virginia and Ohio to carry double-stack trains through Harrisburg or Knoxville. The Heartland Corridor project cut nearly 200 miles from each double-stack container moved to Chicago and reduced Norfolk to Chicago transit times from three days to two. The corridor also enabled next-day service to Columbus, OH from Norfolk, VA. (Railway Gazette 2010).

Key benefits realized by the completion of the corridor include:

  • Reduced transit times and costs for shippers via the corridor;
  • Improved mobility for truck freight and passenger cars attributed to diverted truck traffic;
  • Environmental benefits from reduced truck emissions;
  • Economic development, tax and employment opportunities from the introduction of new intermodal facilities along the corridor; and
  • Improved access to global trade routes through Port of Hampton Roads for shippers and manufacturers in VA, WV, OH and eastern Kentucky (KY).

Project Policies, Programs and Motivations

The Heartland Corridor concept grew out of a combination of NS seeking to improve railway efficiency, and growing public concerns over rising demand for freight transportation, increased highway congestion, and diminishing truckload productivity.  Reduced truck productivity or efficiency is attributed to congestion-related delays, fuel costs, hours of service regulations and air quality requirements, and a growth in truck vehicle-miles traveled (VMT) outpacing highway lane capacity.

These issues pushed the Heartland corridor concept to the forefront of the surface transportation reauthorization process, and it became one of several “Projects of National and Regional Significance.”  In fact, the project is referred to twice in Public Law 109-59, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU).  At Section 1301(m)(2) it is described as the “Heartland Corridor Project including multiple intermodal facility improvements and improvements to facilitate the movement of intermodal freight from VA to OH.” Section 1702, Project No. 5072, describes the Heartland Corridor as “Double-stack clearance of tunnels on the Norfolk and Western Mainline in Virginia located on the Heartland Corridor.” (FHWA 2014)  SAFETEA-LU designated the FHWA as a sponsor agency, and three states, FHWA and NS formed a public-private partnership. This partnership affected the initial flow of over $191 million in project funding, including $83.3 million in Federal SAFETEA-LU funds, $9 million from the Virginia Rail Enhancement Fund; $0.8 million from a Ohio Rail Development Commission grant and $97.9 million from NS. The final total cost was around $320 million (Railway Gazette 2010).

Lessons Learned

The motivations for this project or policy encompass a variety of goals for which mode shift represents an overall proxy.  The goals include reductions in fuel use and emissions, easing of congestion, improvements in safety, increases in carrier efficiencies and concurrent reductions in shipper costs, and positive contributions to economic development. Three distinct areas of lessons learned include:

  • How and why did mode shift occur?
  • How did public policy influence this outcome?
  • How can this policy or program be transferred or adapted to other situations or locations?

The ability of the Heartland Corridor to cause mode shift is a direct function of the reduced cost that results from the ability to both double-stack containers and reduce travel distances by nearly 200 miles. As the Assistant Vice President of Government Relations for Norfolk Southern, Darrell Wilson stated in an interview for this case study, “On the Heartland Corridor, the freight usually has been on a ship for a couple of weeks. As such, the time sensitivity of these international shipments is lower than for domestic loads, so there is more flexibility. As a result, Norfolk Southern predicated the Heartland Corridor more on cost (Wilson 2014) .”

The emergence of the Heartland Corridor as a project, and the influence of public policies in the project are complicated; there was no single owner of the concept. The finished project represented a concurrence of needs and ideas that gradually transformed into a viable infrastructure project that yielded substantial benefits to a wide range of public and private stakeholders (Wilson 2014).  The project was jump-started by the SAFETEA-LU legislation and the formulation of the public-private partnership, which laid the groundwork for a coalition of stakeholders to plan and administer the approximately $191 million dollars in initial funding. As the Senior Chairman of the Intermodal Transportation Institute Board of Directors, and former Federal Railroad administrator Gilbert E. Carmichael stated, “The Heartland Corridor has become a model of collaboration, cooperation, and innovation.  You have proven that our often-fragmented modes of transportation can work together, and you have demonstrated the potential of building successful new public and private partnerships.  Perhaps most importantly, you have participated in the creation of a powerful new link in the global supply chain that will stimulate economic growth and opportunity (Appalachian Regional Commission 2009).”

The transferability of the Heartland Corridor concept is somewhat limited in that the corridor itself is unique, and the opportunity to double-stack and reduce travel distance on that scale may not exist elsewhere in the U.S. On the other hand, the model of collaboration and cooperation, coupled with the public and private partnership model, may offer promise for other mode shift projects.

Epilogue – Recent Developments

This $320 million public private partnership between Norfolk Southern (NS), Virginia, West Virginia, Ohio and the federal government, opened in 2010, providing efficient double-stack rail routing from the Port of Virginia to the Midwest via Columbus. Double-stack container trains previously had to travel longer routes due to insufficient vertical clearances along the mainline rails. Some intermodal terminal facilities offered hi-tech ramps, weigh-in motion scales, advanced container stackers and enhanced security features. The Heartland Corridor reduced transit times from Norfolk, VA to Chicago by a day (from three or four days previously) and is 250 miles shorter than previous routes. This was the first time the private freight rail industry worked together with the U.S. Department of Transportation to develop and finance a rail improvements project.

The Heartland Corridor also included:

  • West Virginia’s first intermodal terminal, the Heartland Intermodal Gateway (HIG)
  • A mega-intermodal facility at the former Rickenbacker Airport in Columbus, Ohio (opened March 2008)
  • A new intermodal facility in the Roanoke, Virginia region
  • Relocation of the Commonwealth Railway in to the median of the Western Freeway in Portsmouth, Virginia
  • Corridor extension to include Norfolk Southern’s Columbus to Cincinnati line (operational December 2010)[1]

The Heartland Corridor project included development of West Virginia’s first intermodal terminal, the Heartland Intermodal Gateway (HIG), a truck-to-rail cargo transfer facility, which opened in December 2015 following a decade of planning and construction over five years.[2] HIG, a 100-acre facility, was strategically selected and is located one mile from the center point of the Norfolk Southern Heartland Corridor. It provides state-of-the-art equipment and services. A cost analysis report determined that companies that ship through HIG can expect savings of $670 per container compared to direct trucking to the Port of Virginia. The West Virginia DOT and Public Port Authority projected that HIG would reduce private-sector logistics costs by approximately $17.5 million annually by 2025.[3] [4]

Recently, DARCO International, a leading provider of post op, trauma and wound care solutions to the global foot and ankle community, became the first company since Toyota to utilize the HIG facility for the continuous shipment of its in-bound freight containers. Supporters saw this as proof of concept for containerized shipments to and from the Port of Shanghai, and a model for companies in the region.[5]However, some sources report HIG is off to a “slow start.”[6] The HIG has unused capacity and is searching for additional customers. According to a facility representative, one “bottleneck” up until recently was obtaining and maintaining sufficient numbers of chassis. Currently, trains run three times per week. For the latest quarter for which there are data, the HIG experienced 184 lifts from June to August 2018, a volume somewhat lower than previous quarters. Toyota has been the leader in volume since HIG commenced. However, for example, HIG also accommodates one-off shipments from independent shippers, such as a recent load of pianos handled by the facility.[7]

Expectations for the new facility were optimistic. The West Virginia Port Authority Director said that the expectation was that the facility would receive 30,000 container movements annually within 100 miles.[8] It guaranteed three-day-a-week service to Norfolk and three-day-per-week service to Chicago. To break even, the facility requires approximately 1,200 lifts per month. In February 2017, the facility had 100 lifts, demonstrating “progress” according to a local development council representative. [9]

The Rickenbacker Intermodal Terminal underwent a  $34 million expansion including upgrading the rail facility by adding a lift crane and lengthening existing lift tracks by thousands of feet. Lift capacity would increase to 300,000 per year from 210,000.[10] Construction would be completed in 2018.

In other developments, CSX Transportation in 2018 filed a complaint against NS and a terminal railroad claiming a conspiracy to block CSX access to the intermodal terminal at Virginia Port Authority’s Norfolk International Terminals. This blocks CSX access to the Heartland Corridor owned by NS.[11] Also, to increase efficiencies, in 2016 Norfolk Southern combined divisions, consolidating its Virginia and Pocahontas divisions to form a new Pocahontas Division that merged operational control over the Heartland Corridor. It will be located in Roanoke, Virginia.[12]

NCFRP included a case study of the Heartland Corridor in its Guide for Conducting Benefit-Cost Analyses of Multimodal, Multijurisdictional Freight Corridor Investments.[13]This retrospective analysis examined the existing alternative routes for three origin-destination pairs. It walks readers through the steps required to conduct a BCA from defining the project to the final presentation of results. The authors state the purpose of the case study is “to showcase the methodology and development of a conceptual analysis of a multistate endeavor and the ability to extract the most value from available public domain data.” They conclude that for all three O-D pairs combined, the realized benefits through shipping cost savings and reduced inventory costs are significant. Overall, they report, the benefits are greater than the capital cost and operating cost incurred. However, they note that all analyses are purely illustrative.

Epilogue – Lessons Learned

The primary purpose of the Heartland corridor was to improve intermodal efficiency by allowing double stacking of containers, thereby reducing transit times and rail shipping costs. The focus was less on mode shift, as the share of intermodal shipments for the origin/destination pairs that the corridor would serve were already extremely high. Figure 41 provides intermodal and truck market shares for a variety of origin/destination pairs for different NS corridors. As Figure 41 shows, the corridors that the Heartland served already had intermodal shares of over 80 percent.

Figure 41

Despite these already high shares, available evidence indicates that the Heartland was still able to attract additional intermodal volume. Figure 42 provides data on annual intermodal units on the Heartland (and Crescent) Corridors. Intermodal units on the Heartland corridor doubled in that time, from approximately 175,000 to 350,000 units.

Figure 42

It is unknown to what extent these increases are due to mode shift and how much they are due to an improving economy and new business. However, there is a lesson learned in that policymakers should explore investments that greatly improve efficiency at a reasonable cost and implement them where they appear feasible and efficient.

However, there is also a cautionary tale in the case of the HIG. Federal and state agencies spent over $30 million on the HIG, while NS provided only $1 million. In the third quarter of 2018, the facility only moved 184 containers, well below the forecast of 30,000 a year and the breakeven of 14,400. While this may be a slow quarter and the facility is less than three years old, operating at five percent of breakeven portends a difficult situation. Siting a speculative intermodal facility in a rural area outside a smaller city is risky public policy, especially with such a modest contribution by the railroad company. In this case the facility was fully built out. It might have been wiser to phase the investment as the volume grew, and as major shippers committed to the region.

[1] Project Profile: Heartland Corridor. FHWA – Center for Innovative Finance Support – Project Profiles

[2] National Association of Counties Website, “Keeping Counties Moving: Freight transportation as an Economic Engine – Gateway to the Heartland and Globe.”

[3] West Virginia Department of Transportation.

[4]  West Virginia Public Port Authority. Heartland Intermodal Gateway Rail Service Cost Analysis. Final Report. Prepared by WSP/Parsons Brinckerhoff. December 4, 2015.

[5] Lieving, David. Heartland Intermodal Gateway provides trade advantage. West Virginia Gazette Mail website. July 26, 2018.

[6] Castro, James. Metro Valley’s I-64 corridor ripe for big economic growth, Local teams identifying ‘shovel-ready’ sites. WV State Journal. February 11, 2018.

[7] Personal communication with unidentified HIG company representative on 10/26/2018.

[8] Cited in W. Va. Opens first train-truck terminal. Railroad News. Akron Railroad Club. December 28, 2015.

[9] Pace, Fred. Facility offers W. Va. Potential for diversification. The Herald Dispatch. March 26, 2017.

[10] Weese, Evan. Exclusive: #34M Rickenbacker intermodal expansion planned. Columbus Business First, June 30, 2015.

[11] Edmonson, R.G. CSX claims Norfolk Southern, shortline in cahoots at Norfolk container terminal. Trains Industry Newsletter. October 9, 2018.

[12] News. Norfolk Southern combines divisions to streamline operations and support growth, Norfolk Southern Corporation website, News page, January 12, 2016.

[13] Appendix L: Heartland Corridor Case Study. National Academies of Sciences, Engineering, and Medicine. 2017. Guide for Conducting Benefit-Cost Analyses of Multimodal, Multijurisdictional Freight Corridor Investments. Washington, DC: The National Academies Press.

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