Transloading links trains, trucks moving ethanol, freight

To some extent, it's a numbers game.

But as  Iowa businesses look to lower the cost of shipping commodities and finished products across the country, transloading is getting a closer look.

Transloading involves transferring a shipment of product from one mode of transportation to another. In Eastern Iowa, a shipment of grain might originate with a truck, move to a train that will carry it to the Port of Dubuque, where it will be loaded onto a barge that will transport the commodity down the Mississippi River.

Trucks efficiently transport goods and commodities over fairly short distances, whereas railroads offer more efficiency and lower costs for long distance shipping. While great strides are being made to improve the fuel efficiency of trucks, today's average train has an efficiency of 500 ton-miles per gallon whereas trucks currently hover around 130 ton-miles per gallon.

"We can carry a ton of freight 500 miles on a gallon of diesel fuel," said William Rhodes, director of reload for the Cedar Rapids-based Iowa Northern Railway. "A railroad hopper car holds the equivalent of three and a half truckloads of grain. A 100-car train has an engineer and a conductor on board, as opposed to 350 trucks that would require 350 drivers."

With Midwest ethanol plants needing a way to get their product to eastern markets, the Iowa Northern became a 35 percent investor in the construction of significant transloading facilities in Manly to handle the transportation, storage, and trading of ethanol and other commodities such as chemicals, food ingredients and oils.

"A lot of the ethanol plants are built on a particular railroad," Rhodes said. "In the case of the Union Pacific, their markets would be going west because that's where their tracks go. If an ethanol plant's market is located in the east, it might be too expensive for them to use the Union Pacific to go east and interchange with other railroads.

"They can truck the ethanol to Manly and get into our network. We interchange with Canadian Pacific, Union Pacific and the Canadian Northern."

Rhodes said a lot of product moves through the Manly terminal into Canada and the eastern half of the United States by way of Chicago. The Iowa Northern broke ground for the Manly terminal in October 2006 and constructed the facility in 2007.

While the ethanol industry pullback has altered the terminal's customer mix, Rhodes said there has been fairly consistent growth in the volume of product handled by the facility.

"When we built it, we thought that ethanol would be about 90 percent of the product in the terminal, but it's probably about 55 percent to 60 percent," he said. "We get a lot of in-bound chemicals that go into the production of ethanol. They are railed in and trucked to the ethanol producers.

"We also have some chicken feed and corn oil that's extracted from the ethanol. That's typically trucked to the terminal and railed to biodiesel producers."

With an eye on the future, Rhodes said Iowa Northern constructed a 25-acre transloading and distribution facility adjacent to the Manly terminal for another form of "green" energy -- wind turbines.

"This basically was open ground that was planned for future development," he said. "Union Pacific Distribution Services leases this property.

"The Union Pacific rails in components from all over the world and stores them on the ground until they are trucked to the wind turbine construction sites. The distribution center fills up with various components being manufactured during the winter months.

"It gets very busy in the spring. There will hardly be enough room for trucks to get through the yard."

Rhodes said the wind turbine component distribution facility, which opened in early 2008, was the only area of the Iowa Northern that was not affected by the June 2008 floods.

"The wind turbine components come in from the north," he said. "The wind turbine business really helped our financial situation. We got chopped in half when we lost a bridge in Waterloo."

Rhodes said the Iowa Northern is developing a refrigerated cross dock across the tracks from the Flint Hills Resources ethanol plant in the Butler County community of Shell Rock.

"It will be used for food that will be trucked in from all over Iowa, railed to southern California and distributed by truck to its final destination," he said. "We also will be able to bring food from southern California and rail it to the east where it will be distributed by truck.

"We're building our partnerships and getting our documentation together. We expect to start construction in the spring."

Rhodes said the Iowa Northern also is developing Manly Logistics Park, a 142-acre industrial area adjacent to the Manly terminal.

"We received state and county grants to build a loop track with the first cross diagonal tracks, which makes everything continuous throughout the terminal," he said. "If the tracks are blocked at one end, we have the redundancy built in to get a company's train out through another part of the loop."

Transfer Services Inc., a unit of Alliant Energy Transportation in Cedar Rapids, provides rail-to-truck transload services to Eastern Iowa industries. Jeff Woods, marketing manager for the Cedar Rapids and Iowa City Railway Co. (CRANDIC), said a self-serve facility is available to shippers off Wilson Avenue SW.

"Suburban Lumber uses that facility to offload lumber from railcars to trucks," Woods said.

With lift capabilities up to 25 tons, products handled by Transfer Services include appliances, copper cakes, metal coils, rebar, aluminum billets, paper, newsprint, lumber, shingles and wallboard.

As late as April 2009, Iowa had an intermodal facility in Newton capable of transferring containerized cargo from trucks for rail shipments to domestic and international destinations. The closing of Maytag Corp. headquarters and plants in Newton after the company was purchased by Whirlpool Corp. led Iowa Interstate Railroad to close the facility on May 1, 2009.

Rhodes said Iowa lacks the consumption of goods required to support an intermodal facility.

"Your intermodal yards are Chicago, Kansas City and Minneapolis," he said. "Intermodal is very specific to the Class 1 railroads like the Union Pacific and Burlington Northern Sante Fe. The containers come off ships loaded with merchandise from overseas for distribution in the United States and they are replaced with shipping containers loaded with products that U.S. companies export overseas.

"The ships don't want to wait for those trains and containers. That's why you don't see them coming to Iowa."