The Link: LINK

The Story:  According to the Kansas City Business Journal, BNSF Railway is slowing its efforts to build its intermodal freight hub in Gardner.  This freight hub is to be the centerpiece for the Kansas City Logistics Park – a 1,000 acre, $735 million industrial park.  Without the intermodal hub, the industrial park project is effectively dead in the water.  The projects developer, The Allen Group, had apparently been notified by BNSF at the same time as the city, county and Corps of Engineers.  BNSF maintains that progress has not stopped and they are still pursuing Corps approval for some wetlands issues.  However, the company is letting the economy dictate when the major construction will begin and end.  

In a rare mid-year budget session of the Commonwealth Transportation Board two new daily train services received funding approval.  There are still contract issues to be worked out with CSX, NS and Amtrak, but train service could begin as early as October.  The first of two services that received the funding are a daily run from Lynchburg to Washington DC, with stops in Charlottesville and Culpeper.  The second service will connect Richmond and Washington DC with an additional daily train.  Both projects will be funded for a three year trial period.  After that, a decision on whether to keep the lines operational will depend on actual and anticipated ridership.  While not a convenient as a commuter line, the new services will enhance to connection between Lynchburg, Richmond and Washington and should help keep more cars off the roads.  

I am a big proponent of an improved (and therefore useful) rail system in the US, so this is good news for me.  Hopefully, the citizens of Richmond and Lynchburg will use the services and they can be extended beyond the three year trial period.

Despite a 2% decline in the number of container ships using the canal in 2008, the Panama Canal Authority has announced that they will implement an increase in the transit toll on May 1, 2009.  The 14% increase in the per TUE charge has been expected since the Authority laid out a schedule of increases in 2006.  However with world trade declining, it was thought that the Canal Authority might suspend the increase in an effort to retain business.  For a typical 4,000 TEU vessel, it will cost approximately 36,000 more per transit.

In response to the increase in fees at the Panama Canal and the piracy concerns around the Suez Canal (and overall high fee structure), shippers have been analysing their shipping routes to find the most cost efficient transits.  Several carriers have opted to go around the Cape of Good Hope and Cape Horn in an effort to reduce tolls.  Typically, this has been for the return trip when transit time is not as critical.  The increased time on the return leg requires the addition of extra vessels into the rotation.  However, with previously idled ships available finding ships to add to the rotation is not a problem.  Some shippers are also considering an all water Eastward transit from Asia to US East Coast ports.  Efficiency will be the keyword in 2009/2010 and if increasing tolls make one route less viable, then shippers will take their vessels elsewhere.