Memphis' dramatic growth as a rail hub has Chicago officials worried
By Peter Downs, Special to The Commercial Appeal
Photo by Alan Spearman
Memphis' growth as a major rail hub is getting Chicago city leaders and Illinois politicians to launch an ambitious program to remove rail transportation bottlenecks. Seems that while Memphis was busily investing in rail, Chicago wasn't. As a consequence, shippers who want efficient service increasingly look south. "We saw competition emerging from Memphis and looked at a potential loss of 17,000 jobs and $2 billion in economic activity a year," said Joseph Clary, who recently stepped down as director of public and intermodal transportation for the Illinois Department of Transportation. "I can't tell you how much I smile when I hear that," said Dexter Muller, vice president for community development at the Memphis Regional Chamber. "They used to say Chicago spilled more product than Memphis carried."
Memphis business and civic leaders began marketing the Bluff City as a freight hub and logistics center in 1979, but real growth really began only about 12 years ago. The turning point came as more and more manufacturing moved offshore to Asia, Muller said. Products arrived on the West Coast, but most of the population that would consume those products still lived east of the Mississippi River. The cheapest way to move product across the nation is by train and there are only four places where rails cross the Mississippi River, Muller said -- Chicago, St. Louis, Memphis and New Orleans, and New Orleans is too far south to efficiently reach many markets, he said.
With Chicago beset by traffic jams and more of the nation's consumer markets reachable in one day's drive from Memphis than from any other city, rail carriers picked Memphis as a place to begin building intermodal facilities -- yards with specially designed cranes for picking containers off the backs of rail cars and setting them on trucks or vice versa. Starting with Union Pacific Railroad's construction of an intermodal facility that could lift 400,000 containers a year and including the expansion earlier this year of the Burlington Northern Santa Fe Railroad's lift facility to handle 1 million lifts a year and the new 300,000-lifts-a-year yard that the Norfolk Southern Railroad is building in Fayette County, rail carriers have invested a billion dollars in intermodal facilities in the Memphis area, Muller said. And giant distribution centers have followed in the wake of those facilities, bringing 170 million square feet of warehouse space to Memphis, "way outsized for a city this size," Muller said. "Our strength is that we can move product through the city much more quickly than Chicago can," he said. "Chicago is No. 1 in rail and we're now No. 3, but we're poised for growth and we're working at it." That growth spurred city officials in Chicago to sit down with rail carriers and agree on 31 projects to speed rail transportation through the nation's largest rail hub. "You could see the traffic jams," Clary said, citing freight trains that took 36 hours to go from Los Angeles to Chicago and were getting stuck in the city for another 36 hours.
They call the list of projects the Chicago Region Environmental & Transportation Efficiency Program. The estimated total cost of the multiyear program is $2.6 billion. The rail carriers that serve Chicago -- save for the Canadian National Railroad, which is not a member of CREATE -- committed $115 million to the program contingent on Illinois committing an equal amount. Despite the state's fiscal crisis, Illinois Gov. Pat Quinn upped the state's commitment to $400 million in his budget proposal this year. What makes Chicago partisans especially joyful is the support they are getting from the federal government. So far, the Obama administration has committed more than $600 million to the CREATE program. "This particular administration is very open to and very supportive of the state of Illinois," Clary said. The federal support for Chicago doesn't seem to worry Muller. As Chicago eliminates its bottlenecks, "it still will make more sense to go through Memphis to get product to Savannah or Florida," he said.