Virtual FreightWeekSTL Connects, Informs, Educates
The first all-virtual FreightWeekSTL event was held May 18–22 in St. Louis, packing in a convention’s worth of content into five days. This year’s event was originally to have been given as part of the Inland Marine Expo in St. Louis (which has been rescheduled for September 29–October 1). FreightWeekSTL was moved to a virtual format shortly after COVID-19 restrictions were put in place.
The event was organized and hosted by Mary Lamie, executive vice president of multi-modal enterprises at Bi-State Development, who leads The Freightway. Lamie hosted the panels and fielded and directed questions to the lineups of expert panelists. Founded in 2014 as an enterprise of Bi-State Development, a seven-county regional development organization in the St. Louis metro area of Missouri and Illinois, The Freightway promotes transportation opportunities in this centrally located multimodal hub.
Virtual panel discussions by transportation leaders, movers and shakers ranged across topics from the floods of 2019 and how one lock and dam coped with them, to the myriad benefits of collaboration between ports and the effects of COVID-19 on supply chains.
Innovation Helped Lock Remain Open During Flood
During Day One, a panel including Courtney Wilson, assistant manager of the Kaskaskia Navigation Project for the Corps of Engineers, and Ed Weilbacher, general manager of the Kaskaskia Regional Port District (KRPD), discussed the innovative means developed by the Corps to keep the Jerry Costello Lock and Dam open during the worst of the flooding in 2019. The only lock on the Kaskaskia River, the Jerry Costello Lock is located at its mouth, just above its confluence with the Mississippi River. Innovative techniques allowed it to stay open at a water elevation two feet higher than originally thought possible. The measures included raising the lock arms safely while crews stood by to hose out large debris that might collect in the gates (WJ, September 3, 2019).
Although the lock had to be closed for 87 days, the measures added a crucial 11 operating days during the floods and saved Kaskaskia River customers who depended on it millions of dollars: including at least $1 million in shipping cost savings for the nearby Prairie State Energy campus, a multibillion dollar clean-coal facility.
Communication Is Key
Next came a presentation by outgoing Coast Guard Capt. Scott Stoermer, commander of Sector Upper Mississippi River, and the incoming commander, Mick Scott, who was formerly deputy commander. Picking up on the theme of good communication, Stoermer focused on the shared governance that guides the Coast Guard’s operations, with everyone involved, from the federal government, Coast Guard and the Corps, to state government, port communities and customers and even the public at large and recreational boaters.
“It really involves a collaborative approach to keep things moving as safely as possible,” Stoermer said. “When one considers how one user in Ed’s example spent more than $1 million to reroute necessary cargo because they didn’t have access to the efficiency, safety and security of the waterways, you can only imagine the impact across the system when things aren’t moving.”
Scott—who took over from Stoermer in a change of command ceremony May 27—said his top priorities to support shippers’ and carriers’ ability to transport freight safely and cost effectively are communications and operational flexibility, continuing his predecessor’s philosophy. Scott was involved in the decisions to reopen the St. Louis Harbor during the 2019 flooding.
All the participants said that while they have had to modify certain operations based on COVID-19, business basically continues uninterrupted by the pandemic.
Port Collaboration
May 19’s events began with “Missouri and Illinois Inland Port Collaboration,” featuring port directors from America’s Central Port in Illinois; PortKC on the Missouri River, Kansas City’s port; Jefferson County Port in Herculaneum, Mo.; and the KRPD.
All four ports have enjoyed recent growth, with more to come. All four port directors stressed the value of cooperation and a regional approach. Richard Grenville, executive director of PortKC, told the story of how it was only recently reopened and rebranded after being shuttered in 2007 by a previous port operator. When it was reopened in 2015, the port only moved 14,000 tons of cargo. Last year, it moved more than 100,000 tons, not counting 3.5 million tons of sand and gravel mined from the Missouri River. The port’s original property is only 9 acres, but it recently bought a 415-acre shuttered steel plant on which it is developing a multi-modal rail and truck hub.
KRPD began similarly 55 years ago, was similarly constrained and had to invest, diversify and develop to prosper. It now operates five terminals at different points. Expanding its business lines from a coal port originally, it now moves slag, frac sand, steel and fertilizer, as well as outbound fly ash and gypsum from the Prairie State Energy campus, the last permitted coal plant to be built in the U.S. and one of the few sources for those materials as other coal plants close.
Branding On Supply Changes To Come
When site selectors look at the St. Louis region, what do they see? That question, of great interest to all businesses and shippers in St. Louis and the surrounding region, was addressed in a video interview with David Branding, managing director for the St. Louis office of Jones Lang LaSalle (JLL), a commercial real estate services firm that is the second-largest of its kind on the world. As a national director and officer of the firm and a member of its Supply Chain & Logistics Solutions Team, Branding is uniquely qualified to address the topic. The interview was conducted by Doug Rasmussen, president and CEO of Steadfast City Economic & Community Partners, an economic consulting firm.
Branding said the St. Louis region’s industrial real estate market today tops 220 million square feet, among the top 20 list nationally. “As long as consumers continue to buy products online, and as long as we continue to expect delivery in a day or less, we’re going to see e-commerce as a trend for a long time,” said Branding, especially since the COVID-19 lockdown, which has only intensified this trend. Branding pointed to several large recent leases in the St. Louis region, most notably for World Wide Technology, General Motors (GM), Reckitt Benckiser and Amazon. He noted that World Wide Technology recently leased 2 million square feet in Madison County, Ill., the second largest lease in the region’s history.
Branding cited labor as a major driver of these transactions. “The St. Louis region is able to supply all of that labor [from executive to skilled], and I don’t think every metro in the U.S. could make that claim,” Branding said. “That’s a critical part of why World Wide Technology is here and remains here, I believe.” He added that Amazon, with 4 million square feet in the region, also needs a lot of employment. “It’s estimated there are 5,000 employees at Amazon facilities in the St. Louis region, and you have to have a deep labor pool to support that. We have that in St. Louis.” Branding believes e-commerce is going to accelerate both nationwide and in the St. Louis region.
“COVID-19 creates a really interesting situation and certainly an inflection point for industrial real estate here as companies turn away from a reliance on China and an ‘all eggs in one basket’ approach to manufacturing,” Branding said. He believes those supply chains will move and that some will come back to the U.S. “Those companies will look for markets that support multiple modes of transportation, such as rail and interstate, coupled with a large enough population to support labor requirements,” Branding said. “We are in the midst of a significant change in the U.S. for demand of distribution space and labor. I think the St. Louis region is uniquely poised to take advantage of that change.”
Port Projects Among Freight Priorities
Lamie next presented The Freightway’s project priority list for enhancing and improving transportation in the St. Louis region. The agency’s top priority is replacement of the Merchants Rail Bridge over the Mississippi River at Mile 183. Construction began in 2018; the project’s estimated costs currently stand at $222 million, fully funded. The bridge is the second largest freight rail interchange in the nation (third largest by tonnage). Linking America’s eastern and western freight rail networks, the bridge carries more than 40 million gross tons annually and serves six Class I Railroads and Amtrak. The new double-track structure will provide additional capacity for increased freight and passenger rail. The double track will also provide more reliable movements and reduce grade delays for motorists and emergency vehicles. (A video of the conceptual construction is available at www.youtube.com/watch?v=SiUTyQWZn6Y.)
The remaining priorities are a mix of rail, airport highway and marine projects. Two riverport projects that stand out are a collection of $21.3 million worth of improvements at America’s Central Port, which is seeking several improvements to enhance its recent expansion of its Madison harbor in 2016. The port recently completed the revitalization of its Granite City Harbor General Cargo Dock and is working on expanding its rail network. It’s also building a new port entrance at Illinois Route 2.
These improvements support the port’s recent alliances with the Port of New Orleans and the Port of Plaquemines, both located in Louisiana along the Gulf of Mexico, to promote international and inland trade routes along the Mississippi River. America’s Central Port is part of America’s Agriculture Coast or “Ag Coast” that supports a 15-mile section of the Mississippi River with the highest level of barge handling capacity for agricultural products anywhere along the river. The St. Louis region’s port system was ranked as the most efficient inland port district in terms of tons moved per river mile during 2015, the most recent year for which data is available. The St. Louis region’s port system plays a critical role in the nation’s global supply chain.
The other port project on the priority list is a mix of $40 million worth of improvements at the various locations of the Kaskaskia River Port District. The ambitious plan includes upgrades to the lead rail track and the addition of a second rail loop track at Port Terminal #1 in New Athens, Ill.; the addition of a second entrance and third dock at Port Terminal #2 in Baldwin, Ill.; and the development of a grain port at Fayetteville Terminal. The latter includes improvements associated with Phase 1 of the Fayetteville Terminal Master Plan, which also includes access road construction from Illinois Route 15.
Together, the projects will enhance economic development opportunities on the Kaskaskia River, the fastest growing tributary in the inland waterway system. Tonnage on the Kaskaskia River is expected to double by 2022.
Post-COVID Supply Chains
The last presentation was an interview with Doug Rasmussen, of Steadfast City Economic and Community Partners, who earlier had interviewed David Branding. Rasmussen, who has worked both sides of site selection, talked about the St. Louis region’s many advantages to companies scouting for locations, which he believes are increasing.
Rasmussen spoke of two post-COVID trends he thinks favor St. Louis. One is what he called the disaggregation of corporate headquarters, which no longer need to be near a major airport to the same extent in the post-COVID era. When St. Louis’ Lambert airport was downgraded from a “hub” to a “spoke,” many at the time assumed it would decrease the region’s attractiveness as a destination for businesses and corporate headquarters. But now that air travel is becoming less attractive and that restrictions are likely to remain in airports and planes even after air travel picks up again, St. Louis’ central location with good driving access to all four quadrants of the U.S. makes it more attractive, Rasmussen said.
St. Louis has always had a strong, affordable talent and labor base, he said, with many first-class universities and a strong industrial history. Its low-cost good quality of life, with much lower housing costs than comparable urban areas on either coast, have helped companies attract talent. Now that companies are rethinking the need to disperse talent overseas, the idea of keeping as many employees as possible in one central location may prove attractive.
St. Louis also has a strong, reliable telecommunications infrastructure, meaning teleconferencing is well supported for those companies that choose to rely on it more even after the end of the COVID emergency. Rasmussen cited the recent move by Bunge of its corporate headquarters functions to St. Louis from New York. This happened before the coronavirus hit, boosting its advantages. Bunge has a grain facility in Fairmont City, Ill., and some corporate offices in St. Charles. Keeping as many functions close together as possible may be a trend on the post-COVID environment, he said, even if you serve a global market. “Some companies will continue to keep employees overseas close to customers,” he said. “But if they don’t have to, they may choose not to.”
All of the event’s content is now available on the website at https://freightweekstl.thefreightway.com/.
