Are You On The Right Track?

It’s Time to Think Rail

Manufacturers want options. They want less touches and any efficiency they can get their hands on. Access to rail can provide those advantages.

If you manufacture anything that requires the transportation of bulk materials, there’s a good chance rail logistics is included in your plans to scale your business. If not, it should be. The key cost-saving benefits come in the form of fuel efficiency for long haul deliveries, as well as economies of scale when needing to ship or receive large quantity orders. For example, if your manufacturing plant needed petrochemicals for the production of your goods, U.S. freight railroads, on average, move one ton of freight more than 470 miles per gallon of fuel. Freight trucks on the other hand can only move one ton of freight just over 134 miles per gallon of fuel, thus creating a 350% fuel-saving advantage for rail users. In addition, on average, one rail car filled with product is equivalent to three freight trucks. Market conditions contribute to the equation as well, but when shipping bulk products regionally or to and from international markets, rail plays a critical role in providing manufacturers with a cost-effective alternative.

However, for rail to be a relevant answer for your operation, it is essential to have access to Class-1 railroads that serve your buyer and/or supplier network. Below is an illustrated map showing an overview of key cities and coastal ports served by the Class-I railroads.

Three Emerging Opportunities in Rail

1. Bulk Sourcing

If your business model requires a bulk supply of inputs in order to manufacture your product, rail can be an incredible asset to help you scale. The types of inputs typically more cost effective to ship in bulk supply by rail include plastic pellets, petroleum and chemical products, lumber and building materials, steel and other metallic alloys, minerals and aggregates, and agricultural inputs. Some example business models include:

• A manufacturer that uses dried distiller grains (DDGs) in the production of cattle feed, where one railcar can carry approximately 90 tons of DDGs.

• A building materials supplier that sources lumber and other materials in bulk for regional distribution needs, where one box car can hold approximately 204,000 lbs of lumber, and a centerbeam railcar can hold 223,000 lbs of dimensional product.

• A plastic manufacturer sourcing liquid petrochemicals or plastic pellets in the production of their final product, where one railcar can hold approximately 28,500 gallons of chemicals or 6,000 cubic feet of space for plastic pellets, depending on the type of railcar used.

• A steel processing manufacturer sourcing steel coils in the production of fabricated steel, where trucks are limited by highway weight restrictions and only allow one steel coil per truck, whereas rail gondola cars can hold up to 4 steel coils at a time.

(Capacity approximations provided by Port Harbor Railroad, a Class-III shortline railroad providing switching services to BNSF, CN, CSX, KCS, NS, & UP at America’s Central Port.)

2. Bulk Distribution

If your business produces a product that is shipped in bulk on a regular ongoing basis, rail can be an incredible advantage for your bottom line. The United States rail network comprises nearly 140,000 miles of rail, stretching from coast to coast, providing access to Canada and Mexico, and connecting major cities and buying centers across the United States. With every major coastal port having direct access to at least one Class-I railroad, rail users around the country gain the benefit of being able to transport their goods to these destinations at a more cost effective rate, thus opening the door to more effectively target international markets. Some examples of manufacturing industries that would benefit from access to rail for bulk distribution include the chemical, petroleum products, plastic pellets, wood products, steel products, and animal feed industries.

3. Toll Manufacturing & Co-Packing

Consider all of the multinational companies that need partners to sub-contract aspects of their manufacturing process. For example, a toll chemical manufacturing company might receive a product from a customer that requires a bulk shipment of liquid petroleum, which then requires further treatment, blending, or additives. Once the required additions have been made, the product is then shipped back to the manufacturer that requested the service, or to other entities, such as a liquid terminal, that exist throughout the manufacturer’s supply chain. In this instance, having direct access to rail can be an incredible asset to land multinational clients, as they know you can both receive and ship their product by rail when needed, thus providing them with a more cost-effective and scalable option.

These opportunities however only exist if you can find rail-served real estate. Now, if you hop on Loopnet, “rail-served” doesn’t quite mean what you might think. You might have a main line adjacent to the site you are looking at, but that means you’ll need to add your own spur, and keep in mind rail construction costs on average around $1.3 million per mile. You also need to convince the Class-I railroad that owns the line to serve your facility, which will cost additional time and capital.

The actionable opportunities in rail for small businesses are in locations with real estate options where rail spurs are already in place, and service is provided either directly by a Class-I carrier, or a short line operator.

Going back to the idea that smart business owners know the value in having options, the more Class-I railroads your facility has access to, the more competitive your business can be. Illinois has a unique advantage over the rest of the United States in that we have multiple locations served by rail, with access to more than one Class-I railroad. Chicago, home to various logistics parks and facilities with rail-served real estate, has access to all seven. In concert with Terminal Railroad, America’s Central Port, a multimodal facility with warehousing and shovel ready sites located in Granite City, IL, just ten minutes from downtown St. Louis, has access to six, as do multiple sites and facilities in the surrounding Southwest Illinois region. Milano Railway Logistics Services out of Mount Vernon, IL has access to four, as does the Tazewell & Peoria Railroad (TZPR) located in Peoria, IL.

The access to suppliers, buyers, and international markets that these industrial corridors provide make for incredibly valuable and strategic locations for small manufacturers, providing a unique opportunity to locate manufacturing operations throughout the State of Illinois.

Originally published in "The Illinois Manufacturer: Fourth Quarter 2020 Edition."

https://ima-net.org/wp-content/uploads/2020/11/Fourth-Quarter-TIM-2020-1.pdf

CARES Act Funding Available for International Trade & Business Development Costs

The Illinois SBDC International Trade Center at Southern Illinois University Edwardsville has been awarded CARES Act COVID-19 funding to increase professional business advising, and provide additional resources for education and training to small businesses experiencing challenges, including impending closure as a result of the pandemic. Outreach efforts for use of the funding is being focused on businesses owned by minorities, women, persons with disabilities, veterans and those located in rural areas.

The Illinois SBDC International Trade Center at SIUE serves businesses in Southern Illinois by providing individualized, no-cost export advising, identification of foreign buyers, agents and/or distributors through trade leads, international market analysis, and more.

Whether you are currently working to grow your international footprint, or have yet to consider international markets, their are multiple funding opportunities now available through the local SBDC's International Trade Center.

• Website translations and search engine optimization for foreign markets

• Translation services for marketing materials, such as brochures

• Consulting firms to identify new international customers and distributors

• Certification services for your products such as UL, CE Marking, etc

• Current virtual trade shows and missions around the globe

• International travel as travel abroad restrictions are lifted

• Employee training for international business and export-related areas

For more information about CARES Act funding, contact the ITC by email International-Trade-Center@siue.edu or phone at (618) 650-3851, or visit siue.edu/business/itc.

Upcoming Webinars

Start & Grow Your Export Sales During COVID-19 Times

Tuesday, October 27, 2020 | 11am - Noon (Central Time)

Register here: (click here to register)

Roundtable Discussion: 6 Key Actions for Exporting

Thursday, October 29, 2020 | 10:30am - Noon (Central Time)

Register here: (click here to register)

The Story Behind the Sculptures at America's Central Port

America’s Central Port has four art installations along Illinois Route 3, all located within Granite City and Madison, marking the boundaries of the Port property. The four sculptures include the Wake of the Flood, the Wayfinder, the Oculus, and the latest addition Intermodal Powerhouse No.1. Together they are visible to over 18,000 motorists daily who transit Illinois Route 3 from the McKinley Bridge to I-270.

Wake of the Flood,

by Scott Ross (Lucas Coffin assisted in the assembly and co-fabrication of the piece)

Inspiration for the Piece: America’s Central Port, located along the Chain of Rocks Canal, is protected by a 500-year U.S. Army Corps of Engineers levee. Prior to the levee, the region would flood when the Mississippi River would rise. The artist's inspiration for this particular piece, which can be found at the corner of Bissell & Rt 3, was to create something that made reference to what’s left behind after a flood. When the water recedes, the high water mark leaves behind this jumble of linear elements (typically trees) on the bank of the river. This site specific piece signifies the resilience of America’s Central Port and the permanent mark it has made in helping advance the economic development of the region. It is a narrow and horizontally positioned piece by design, meant to complement the vertical nature of the surrounding space, including the various tall buildings and structures, trees, phone poles, and other infrastructure elements. As for the name of the piece, Scott Ross has been known to incorporate Grateful Dead references into his work, and for this piece he felt Wake of the Flood, the 6th studio album from 1973 was a perfect fit. The wake is what’s left over; it’s the after. America’s Central Port is the after, it’s the mark that reminds the region of how far we’ve come and inspires us to keep moving forward.

Scott Ross Bio: Scott Ross was born and raised in Union Lake, MI and earned BA (1997) degrees in Ceramics and Creative Writing from Eckerd College in St. Petersburg, FL. He then earned his MFA (2012) in Sculpture from Southern Illinois University Edwardsville (SIUE). Since 1997, he has been building and firing wood-kilns at his home studio in Union Lake, MI. During the last ten years he has participated in 46 exhibitions (13 solo and 33 two person/group with 3 international), including exhibitions at the Museo del Vino, Laumeier Sculpture Park and The Tarble Arts Center. These exhibitions are representative of his continued interest in sculpture, installation and ceramics as vehicles for self-expression.

Wayfinder,

by Noah Kirby

Inspiration for the Piece:

The Wayfinder sculpture, which can be found at the corner of W 20th Street and IL Rt 3, was designed to address three areas of interest to the Port. To use steel as a primary material, signify the relationship between the Port and the local community, and to capture the significance of the Mississippi River. The boundaries of America’s Central Port property spans the communities of Madison, Venice, and Granite City. This steel sculpture is composed of three individual elements that are interrelated with one another. Each element in the sculpture is its own structure, self-supporting, and individual. When the composition of these three elements come together it creates a whole that interacts and interrelates with one another in a way that is visually dynamic. In both a literal and figurative way, the sculpture speaks to the Port as a place where parts of the community come together as a whole. The choice to paint the piece red is in reference to a theme found in river navigation. All along the Mississippi River lie red and green buoys that mark the navigable channel, directing north and southbound barge traffic. “Red right returning” is a phrase used to help remember how the system of navigational aids work in way-finding. When traveling upstream, or in the Port’s case towards home, you keep the red markers on your right. In a subtle way this choice to paint the sculpture red alludes to the idea of the river as a way home as well as being a symbol of finding direction, hence the title “Wayfinder.”

Oculus,

by Noah Kirby (Contributing artists: Alison Ouellette-Kirby, Elizabeth Kronfield, Matt Wicker)

Inspiration for the Piece:

This piece, which can be found along IL Rt 3 and the Confluence Bike Trail between Rock Road and W 20th Street, is part of the Six Mile Sculptureworks series and was designed to highlight the significance and creativity within the manufacturing process of steel, which is prevalent throughout the region. The challenge behind this piece was activating the landscape adjacent to IL Route 3, incorporating the river and road, all while maintaining a commitment to steel as the key material. The overall design incorporates multiple references to the surrounding landscape and river elements. The form makes reference to riverboat paddle wheels, locally manufactured steel coils, the wheels and tires of the trucks that move along IL Route 3, as well as being a sort of wild flower within the landscape. The title “Oculus” came about in reference to the idea that these things are critically significant parts of the Ports activity. They are a sort of lens through which to see the region and to bring into focus the Port’s role as a valued participant.

Intermodal Powerhouse No.1,

by Noah Kirby

Inspiration for the Piece:

The focal point of design for this piece are the two 20’ tall smoke stacks that were salvaged from the boilers of the former Granite City Army Depot power plant on property at the Port. The theme of this piece revolves around the nature of the Port as an economic engine and powerhouse of sorts. The stacks were the focal point of the design, along with the use of a grain silo and structures that make reference to shipping containers and the curved tops as seen on various Mississippi River barges. Beyond the two salvaged smoke stacks, at the center of the composition is a partial grain silo connected with a shipping container/barge lid. It is intended to look like a purpose-built functional structure, though not so specific as to be dismissed as “just another Port building”. The color scheme was chosen to align with the green and blue accents of the America’s Central Port logo, where the color blue represents the river, green represents the road, and grey represents access to six Class-1 railroads. The camouflage-like design is both a tribute to the history of the Port as the former U.S. Army Melvin Price Logistics Depot, as well as the nature of the Port as a crucial component in the region’s economic engine, camouflaged in plain sight.

Noah Kirby Bio:

Noah Kirby produces both public and private commission work and is currently Artist-in-Residence for America’s Central Port in Granite City, IL. In addition to his time spent as a sculptor, he is a Senior Lecturer in Sculpture for the Sam Fox School of Design and Visual Art at Washington University, where he teaches courses on sculpture, public sculpture art practice, 3D design foundations, blacksmithing, foundry, and metal fabrication. His art practice utilizes conventions of both industrial manufacturing process and hand craft traditions to build objects that offer subjective experience within shared spaces. Deeply invested in manufacturing processes, he founded and is the Co-Director of the Six Mile SculptureWorks program of Alfresco Productions in Granite City, Illinois, whose mission is to rebrand the town as a place where Art and Industry Meet. He has served on the International Conference on Contemporary Cast Iron Art, and is a standing member of the Western Cast Iron Art Alliance. In addition, he has served on the Board of Directors for Saint Louis Artworks, and is a Board Member of Sculpture Works Ferguson. His work has been displayed across the nation in outdoor and gallery exhibitions, as well as internationally in Canada, China, Great Britain, and France.