Kansas rail hub to profit carriers

New park serves intermodal firms

A new $250 million logistics park operated by BNSF Railway Co. near Kansas City, Kan., holds the opportunity to make intermodal shipping more efficient for companies like J.B. Hunt Transport Inc.

Logistics Park Kansas City has 443 acres with an annual lift capacity of 500,000 containers, making it ideal for companies like J.B. Hunt that rely on intermodal shipping to serve customers. Intermodal is a method of shipping containers via multiple modes of transportation, including railroads and ships.

Before opening the new park, the railroad was operating out of a nearby facility with a maximum annual capacity of 370,000 containers. BNSF’s new intermodal hub could one day handle 1.5 million containers.

“It provides tremendous growth for us to harness over the next 10 years,” said Chris Gutierrez, president of Kansas City SmartPort Inc., part of the Kansas City Area Development Council. “J.B. Hunt and a number of intermodal companies are actively engaged in our market already. I think you’ll see some of those companies continue to grow their footprint.”

J.B. Hunt, a pioneer in intermodal shipping, declined to comment on its use of the new Edgerton, Kan., facility. Intermodal shipping has been the top performer among J.B. Hunt’s divisions, and the company reported third-quarter operating income of $118 million for that segment. It was a 21 percent increase from the same period in 2012.

BNSF already moves more intermodal containers than any other railroad. Typically, the company said, it handles 40 percent of the nation’s intermodal freight, and this year it is on pace to ship 5 million containers. The railroad and J.B. Hunt have a relationship that stretches back more than two decades.

When built out, the Kansas facility could cover 1,550 acres and feature a mix of intermodal shipping, distribution space and an international trade zone. Demdaco, a home decor company, has already occupied a 326,000-squarefoot distribution center. De-Long Co. has set up a grain distribution operation in the park, and North Point Development, a partner in the park with BNSF, is building a 500,000-square-foot warehouse that will be leased to tenants.

Today, the park features five cranes with space to stack 4,300 containers. This alleviates the need for off-site storage that happened whenever the railroad exceeded capacity at its old facility. The ability to move 500,000 containers a year gives the park a capacity similar to BNSF’s intermodal facility near Memphis.

BNSF, which operates on 32,500 miles of track in 28 states and two Canadian provinces, opened its first logistics park in Fort Worth. It also operates one in Chicago. What makes the parks unique from other intermodal shipping operations is the land available for warehousing and distribution development and the potential to nearly triple the container-handling capacity.

“It’s a greenfield opportunity,” railroad spokesman Steve Forsberg said. “This park is surrounded by undeveloped acreage. BNSF helped pioneer that concept.”

“What this park does for J.B. Hunt and others is it allows them to continue growth in the intermodal portion of their business,” Forsberg added. “This creates capacity for growth.”

Business, Pages 31 on 11/02/2013

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