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Port of Tampa prepares to unveil new railroad line to boost cargo, ethanol markets

TAMPA — The transformation of the Port of Tampa will start on land.

The port is nearing completion of the $11 million Tampa Gateway Rail Terminal, a 2-mile rail loop that will speed the unloading of ethanol-bearing trains and cargo-bearing ships.

It's the first port-based rail facility in Florida that will have the capability to unload 96 railroad cars right alongside the docks, according to the Port of Tampa. The project is a public-private partnership between the Tampa Port Authority, railroad operator CSX Corp. and oil and gas pipeline giant Kinder Morgan Energy Partners, L.P.

The loop was built on the southern end of Hooker's Point to serve both the port's cargo container facility along the East Bay Channel and Kinder Morgan's storage tank facility. The railway itself is done; the rest of the infrastructure should be finished next month.

The project could be the key to unlocking the lucrative cargo container market that the port needs to grow. The port has long relied on bulk cargos like phosphates, but that sector is shrinking.

"It really expands our reach beyond Florida to the entire CSX network," said Wade Elliott, the port's senior director of marketing.

The port's primary market is currently central Florida.

"Once you move beyond 400, 500 miles, you really need rail to be competitive," Elliott said. "To extend our reach to places like Memphis, Charlotte, Atlanta, and eventually Chicago, you have to have rail."

The port's rail partners believe it will allow them to transport cargo more efficiently, more reliably and more profitably by using "unit trains" — an industry term for any train of 50 or more cars transporting a single good to a single destination at one time. Shipping different cargos to different locations on one train is more costly and inefficient.

"It's very beneficial for shippers and railroads to be able to transport these commodities in a train dedicated to that commodity," said CSX spokesman Gary Sease. "It reduces costs. It improves the reliability of those deliveries.

"At CSX, we love unit train business."

For Kinder Morgan, the new rail line will allow the company to take advantage of the growing ethanol market and ship more of it throughout Florida.

"The EPA is looking at increasing the mandate for biofuels," said Tom Bannigan, president of products pipelines for Kinder Morgan. "So this unit train (facility) we're putting in there allows us to meet that growing demand driven by the expanding mandate."

A 96-car unit train can typically hold 66,000 barrels. Kinder Morgan has the facilities to handle that much ethanol in only four other states: California, Maryland, New York and Texas. The company spent $15 million to improve its facilities and extend its pipeline to the new railway. The port expects 31,000 rail cars a year to deliver 300 million gallons of ethanol annually.

Rail also gives importers and exporters a greater range for their goods from Tampa. The ability to quickly go from ship to train means cargo can be moved much faster.

But the new rail loop isn't the only project that may help transform the Port of Tampa. There's also the $600 million "Connector," the elevated toll road set for completion in 2013. It will link Interstate 4 and the Lee Roy Selmon Expressway and allow cargo trucks to drive straight from the docks onto the highway, bypassing Ybor City traffic.

For now, Zim Integrated Shipping Services is the only global cargo container company operating at the port. But Elliott said the port has been negotiating to bring in other global shipping companies intrigued by its new capabilities.

"This is allowing for a whole new conversation with the global container shipping companies," Elliott said. "They see lots of interesting potential to not only load and discharge containers from this market but also to extend their reach beyond Florida."

The port had initially hoped to attract new container shipping companies and then build the rail loop. But by teaming with private companies the port can now do the reverse — use the new on-dock railway to attract more customers.

Jamal Thalji can be reached at thalji@tampabay.com or (813) 226-3404.

Port of Tampa prepares to unveil new railroad line to boost cargo, ethanol markets 09/24/12 [Last modified: Monday, September 24, 2012 11:02pm]
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