Economic Development and Life Science & Biotech and Manufacturing & Technology and Technology and Transportation, Distribution & Logistics

State eyes inland ports to bolster TDL: 'Dry' hubs under consideration in 3 parts of the state could be boon to transportation, distribution, logistics

June 13, 2005

The construction of intermodal hubs in Indiana could add thousands of jobs to the state's transportation/distribution/logistics industry, an area targeted by officials as an economic pillar to pursue.

The General Assembly gave the Indiana Ports Commission the authority two years ago to build the hubs-"dry ports" where cargo is transferred between train and truck. While the projects remain in the planning stages, supporters cite Indiana's central location as a primary factor to build the facilities.

At least three locations are under consideration by various groups. The Ports Commission is surveying potential sites in northwest Indiana and is assisting officials in Vanderburgh County who are exploring options in the southwest part of the state. And locally based Browning Investments Inc. has 1,200 acres secured near the Avon rail yard, which could help transform the rail operations into a full-fledged intermodal port.

"We've gone through a long process of analyzing the feasibility of this, and it looks like the market can support multiple facilities in Indiana," said Jody Peacock, spokesman for the ports commission. "We can really serve a strong market because we have 82 million people living within 500 miles of our capital city. That's a oneday drive for a truck."

Cargo arrives from both coasts at Chicago's inland port, the largest in the nation, which is operating at capacity. A new hub is under construction in Joliet, Ill., to alleviate some of the congestion. But enough traffic remains to warrant another in the Midwest, Peacock said. Moreover, the port is not expected to be finished for nearly a decade.

If built, the site in northwest Indiana would rival the Joliet port in size, cost and jobs created, Peacock said. Developing the 2,200-acre property in Illinois is estimated to cost $1 billion and create $27 million of annual tax revenue. Up to 12,000 jobs are expected by 2014, in addition to 20,000 union construction jobs.

Realizing those types of figures in Indiana would buttress the state's mission to include the TDL industry in its long-term economic plan. The other focuses are life sciences, advanced manufacturing and information technology.

TDL firms employ 258,000 Hoosiers and produce 10 percent of the gross state product, according to a 2002 Battelle Institute study commissioned by the Central Indiana Corporate Partnership.

The ports commission operates the state's three maritime ports that ship lowvalue commodities and raw materials such as grain and steel. The intermodal ports could transport automobiles and other consumer goods, which would aid Indiana's manufacturing sector, said John Schneider, assistant vice provost for industry research at Purdue University. Closer hubs would cut shipping costs and make the state's manufacturers more competitive, he said.

"It takes a train the same length of time to get to Chicago as it does to get through Chicago," Schneider said. "We're the crossroads of the world. There's no reason why we can't take advantage of this. Geographically, it's ours to win."

The legislation approved by the General Assembly two years ago allows the ports commission to issue bonds to raise funds for capital projects. Port users would enter into leases to pay off the bonds.

Because the northwest Indiana project would be dependent on private financing, construction cannot begin until there is enough interest. Thus, there is no timetable. The project might come together like an industrial park, one piece at a time, Peacock said.

"We have to work with a lot of companies that would be major players in the facility," he said. "We have to convince them this is a good thing for Indiana and line them up to participate. We don't want to create a white elephant that no one would use."

In Hendricks County, Browning Investments is developing its CentraLogistics Park in Avon. The industrial park could transform the adjacent rail yard that is only operating at a fraction of its capacity into an intermodal port, said Harold Gutzwiler, executive director of the Hendricks County Economic Development Partnership.

Much of the 1,200-acre tract north of Browning's Plainfield AirTech Business Park in Hendricks County is under contract. When finished, the decade-long project will boast 15 million square feet of space, almost equaling the entire Plainfield industrial park.

"With the industrial parks being so close to the airport, interstates and rail yards," Gutzwiler said, "it provides a tremendous opportunity for logistics firms to tap into a number of transportation modes for their products."

Brentwood, Tenn.-based Logisco Inc. occupies 1.4 million square feet of warehouse space at AirTech Park. The thirdparty logistics company recently lost a small contract worth about $500,000 a year to a competitor at the new intermodal port in Joliet.

Logisco could not match the cheaper bid due to the higher cost of transporting the freight farther to Indianapolis, said Mike Jones, Logisco's vice president of business development.

"We're sort of at a disadvantage in the Indianapolis area, with the main intermodal ports being in the Chicago area," Jones said. "If we could get an intermodal port in Avon, that would really solidify Indianapolis' position as a logistics hub."

In May, the Princeton Area Chamber of Commerce received a $146,000 grant to study the possibility of building an intermodal port in southwest Indiana. The chamber has hired Washington, D.C.-based consulting firm R.L. Banks & Associates to conduct the study.

The ports commission and the Indiana Department of Transportation, as well as railroad companies Norfolk Southern Corp. and CSX Corp., will provide input. The study should be completed within 18 months.
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