In June, the Port of Toledo announced that it had reeled in a big fish. Cliffs Natural Resources, a large mining and natural resources firm, is locating its first hot briquetted iron production plant at the port’s Ironville terminal. The $700 million investment will occupy a vacant 100-acre site that the port acquired in 2008 and equipped with a cargo warehouse, some road infrastructure and a direct-rail spur with a loop of some 20,000 feet in length to allow full unit trains at the terminal.

Joe Cappel, director of Cargo Development at the Toledo-Lucas County Port Authority, reckons that the rail infrastructure to the dock was vital in Cliffs’ decision to locate its new plant at the port. “I think the on-dock rail is a really important part of the project,” he says, adding that the new tenant will build more rail infrastructure at the site as well as laydown area for cargo and other infrastructure.

From coast to coast ports are investing in on-dock rail facilities. The Port of Los Angeles recently completed a $71 million intermodal container transfer facility at its TraPac terminal, which includes a semi-automated on-dock rail yard. Next door, the Port of Long Beach unveiled a draft environmental study last December for an on-dock rail facility at one of its container terminals. The port authority wants to redevelop the existing rail yard to accommodate longer trains on the site. The plan calls for a set-up that will be served purely by rail, with no access for trucks. According to the port authority, the project will enhance the port’s efficiency and is vital in its push to modernize it and lead the way in environmental sustainability.

Over the longer term Long Beach intends to spend as much as $1 billion on rail facilities, and much of this investment will go to on-dock rail. The percentage of containers shifted directly between vessels and trains at the port is set to increase from currently 26 percent of container throughput to 35 percent in 2020 and climb to 50 percent later on. The Port of Los Angeles aims to boost its share of on-dock transfers between rail and vessels from 26 percent in 2015 to 40 percent.

On the East Coast, the port of Virginia has embarked on a $320 million expansion project that will boost container capacity by 40 percent and double on-dock rail volume. Up the coast, the port authority of New York & New Jersey is spending $149 million to set up an intermodal transfer facility at its Bayonne container terminal, the only container facility in the port that currently does not have on-dock rail.

As much as two-thirds of the containerized cargo that passes through the West Coast ports is intermodal, so on-dock rail facilities can make a significant difference in speeding freight through these ports. Patrick Burgoyne, head of Ceres and Yusen terminals in North America, recently referred to on-dock rail as a recipe to tackle port congestion. “You can quickly move inbound cargo off the docks to make room,” he says. “It helps with congestion and storage issues.”

However, on-dock rail on its own is no guarantee for less congestion, notes Albert Saphir, president of ABS Consulting, a Florida-based shipping consulting firm. “It depends,” he says, “on the layout of the terminal.”

“Newer ports often have a more efficient setup,” remarks Bob Imbriani, executive vice president, International at forwarder Team Worldwide. On-dock rail eliminates an extra handling step and reduces transit time, he adds, which can result in delivery one or even two days faster.

Theoretically on-dock transfers should also reduce costs, but shippers and importers should always look at the total transportation cost, Imbriani advises. “A port with a railhead is not necessarily cheaper.”

The price element is opaque, as shippers and importers are seldom billed for terminal transfer charges per se. Often ocean carriers make their own arrangements for the rail portion and offer their customer a packaged service with one all-inclusive price, Saphir points out.

Still, on-dock rail usually is an advantage. “There is no question if a port has good rail service on dock, that’s a good thing to everyone,” says Imbriani, adding that his company has had positive experiences with the concept.

On the flip side, shippers have little ability to choose and control this element. As the rail companies rarely work directly with shippers and forwarders, the ties are between railroad and shipping line, and they control the process, Imbriani says.

“From a shipper perspective it is close to invisible,” agrees Saphir. “The shipper, and even the forwarder, usually has no influence.”

As such, on-dock rail is not a major factor in shippers’ and forwarders’ decisions on routings, notes Imbriani. “It goes back to carrier routings and transit times. If all is equal, we would prefer on-dock rail, but it’s not a decisive factor.”

For the most part, ports emphasize on-dock rail in their efforts to draw in shipping lines, Imbriani finds. If successful, it brings benefits to shippers as a port’s network of destinations is more important than on-dock rail, he says. He points to the Port of Mobile, where on-dock rail is very efficient in handling cargo, but it does not have a lot of container vessels coming in.

Connectivity is also a more important factor on the land side. “Maybe a port has good on-dock rail but the rail company does not have the connections to various points around the country,” Imbriani says.

This aspect could be of big interest for the ports in the Gulf region as more vessels move through the Panama Canal, he reckons. The ports on the East and West coasts have excellent connectivity, but transit times are fairly long. If a Gulf port has good access to markets in the interior, this could be a significant benefit, he reflects.

When propagating on-dock rail, ports are wont to emphasize the green credentials, pointing out how many trucks a single train can replace. For Cappel, this misses the point. “Some people look at rail as a competing mode to ships and trucks. We don’t view it that way. I think you can’t have enough rail at your terminals. It gives customers more options,” he comments.

For the Port of Toledo, the Great Lakes-St. Lawrence Seaway complex closes between Christmas and March, but the port remains open throughout the year. During those winter months it is rail and trucks that keep Toledo’s traffic going.