Shipping makeover in Alabama

New public-private partnership to beef up cargo transport capacity in Alabama

A Norfolk Southern train pulls cars through a junction point on the mainline in Birmingham, with the city’s historic Sloss Furnaces in the background.

In 2021, the flow of containers moving through the Port of Mobile rose nearly 19% from 2020, according to a Jan. 10, 2022 Alabama Port Authority report. And in February 2022 alone, volumes at the Mobile seaport climbed 33% higher than last February.

Alabama’s current rail lines and other infrastructure are not enough to handle the increasing volume of goods flowing to and from the Port, resulting in bottlenecks and a heavy reliance on 18-wheeler trucks, which hold considerably less cargo than trains, says Rob Legge, director of industrial development for Norfolk Southern Corp., whose subsidiary is Norfolk Southern Railway.

“From the Port of Mobile’s perspective in particular, they have limited rail services,” he says.

The answer, says Legge, is to construct more enhanced rail lines and services in the state.

So in January, the state of Alabama and Norfolk Southern announced a new $231.6 million program called the A-USA Corridor Project, which aims to improve the rail lines between the Port of Mobile and Jefferson County and build up economic/industrial development infrastructure in Etowah, Shelby, Washington and Mobile counties.

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Of the entire $231.6 million A-USA project, Norfolk Southern and the state of Alabama together will pay for more than half. The rest of the funding will come from federal Consolidated Rail Infrastructure and Safety Improvements Program grants.

 “This project will create a corridor that will move containers and provide intermodal service between the Port of Mobile and the Birmingham market via the facility in McCalla,” Legge says.

“That’s one of the big benefits for the Port,” he says. “They would have an expanded intermodal service offering and, in particular, be able to target products that would move within the state of Alabama and get trucks off the highways there on that route between Mobile and Birmingham in particular.”

Norfolk Southern maintains an intermodal facility at McCalla, near Birmingham – moving containers from truck to train and vice versa.

An initial phase of the project will involve linking the Port of Mobile to the intermodal facility in McCalla, with more enhanced rail lines that could support double-stack trains and larger container volumes. This phase of the A-USA Corridor Project will cost around $71.6 million.

Inland ports are noncoastal hubs where trains or ships deliver cargo that is then processed, handled and prepped for distribution to other locales. They generally meet two criteria: access to a seaport via Class 1 rail and major transportation infrastructure such as rail lines, a waterway or interstate, according to the CBRE Port Logistics Group.

To start, the Jefferson County Economic Industrial Development Authority sold 104 acres around the McCalla Intermodal facility to Norfolk Southern for $2.5 million last November, Jefferson County Commissioner Steve Ammons says.

Ammon’s chief of staff, Othell Phillips, says, however, that the JCEIDA will not be responsible for any infrastructure, utility, excavation or any other site development cost.

“Norfolk Southern has purchased some land from our Industrial Development Authority, and they will use that for spurs to help develop either distribution or manufacturing logistics to give more rail access on top of the intermodal,” Ammons says.

Spurs are short sections of track that split off from a main railroad track. They typically serve nearby facilities such as warehouses and loading docks.

“Companies that need larger volumes can buy into the warehouse structure, or they can continue to operate through the intermodal, and they’re basically across the rail from each other,” Ammons says.

“This will be a big opportunity. It also will give us relief on our interstate system, not having as many 18 wheelers up there,” he says.

Meanwhile in Etowah County, Norfolk Southern is already building up infrastructure at the industrial development site called the Little Canoe Creek Mega-Site. The goal is to attract industries that use rail service to the location. 

The Little Canoe Creek Mega-Site sits on 1,100 acres eight miles outside of the Gadsden city center and just over 60 miles northeast of Birmingham. 

Norfolk Southern officials hope to draw industry to the mega-site by clearing a portion of the site and developing a pad to speed up construction time for prospective companies wanting to build next to the rail lines. 

The site’s size and its close proximity to I-59 make Little Canoe Creek an ideal spot for rail expansion, says Etowah County Chief Administrative Officer Shane Ellison.

“Through our partnership with Norfolk Southern, Alabama Power and the Alabama Department of Commerce, everyone is working together to find a high-quality industry to locate on the site, one that needs to take advantage of that easy rail access,” Ellison says.

Even before the A-USA Corridor Project announcement, the county’s economic development team had already sought out a Growing Alabama tax credit, administered by the Alabama Department of Commerce, to help pay for the mega-site improvements.

The tax credit program gives companies and individuals a dollar-for-dollar tax credit up to half of their total income tax liability when they invest in projects approved by the Renewal Alabama Commission.

Norfolk Southern has so far invested $2.7 million to create a 70-acre, pad-ready rail-served property, relocate gas lines and pay for road construction, Ellison says. The work on this phase is near completion.

Now Norfolk Southern plans to invest another $3 million at the mega-site to increase the pad to 100 acres and build a new road on the site to improve access in preparation for further development.

Growing Alabama “has been an important tool that we’ve leveraged in Etowah County,” says Legge. “For a couple of years it has allowed us to help the Etowah County Mega-Site to become more attractive for new projects and prospective industries. Everyone these days is looking for speed to market, and they want to find a site they can develop as quickly as possible.”

Johnny Grant, Etowah County Commission president, says the county has struggled economically in recent years after several industries left the area. He hopes the A-USA Corridor Project will help.

“We lost the steel plant here. Goodyear Tire & Rubber closed their doors along with a couple of others. Hopefully, this is going to give us an advantage to draw some larger manufacturing companies,” Grant says.

“It’s going to be hard to replace what we’ve lost, but at least this gives us something to have in Etowah County not only for our workers, but also for economic development and our tax base,” he says.

Alabama Secretary of State Greg Canfield

Alabama Secretary of Commerce Greg Canfield says the A-USA Project will help forge more robust supply channels in the state.

“Building out the transportation infrastructure to spark commerce throughout Alabama and the Southeast will unleash economic growth potential in many areas of the state,” Canfield says. “We think the A-USA Corridor will be an engine for job creation for many years.” 

Gail Short is a freelance contributor to Business Alabama. She is based in Birmingham.

This article appeared in the June 2022 issue of Business Alabama.

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