Cargo-Oriented Development

photo by Brandon Townley

Cargo-Oriented Development promotes the greenest, most efficient way to move freight as a strategy to re-energize the economies of American cities.

Why is COD Important?

Cargo-Oriented Development (COD) helps communities capture the jobs and economic vitality that can be generated by a more balanced and efficient freight system.

The US has over 200 intermodal terminals. Each one is a magnet for logistics, manufacturing, and other industries that rely on rail transportation.

    The potential of Cargo-Oriented Development:
  • COD anchors industrial business sectors. COD can attract and retain logistics and manufacturing operations that depend on proximity to rail lines, transload facilities, or intermodal terminals to minimize transportation costs while gaining ready access to urban markets. These benefits can catalyze the cleanup and reuse of vacant land, restoring jobs to communities eroded by decades of industrial contraction.
  • COD improves regional competitiveness. A strong multimodal freight transportation system is a prerequisite for the development of industrial clusters in a region and a key to energy-efficient transportation. COD can enable a region to create more effective national freight transportation networks, with the benefits of COD in multiple regions flowing up to strengthen the national economy.
  • COD reduces environmental impact. The pollution and congestion that often stem from the interface of heavy truck volumes with intermodal rail are reduced with COD strategies. COD can reduce noise pollution, improve safety, and lead to more stable property values. These impacts are felt immediately in communities with intermodal facilities, and like the economic benefits of COD, these improved results aggregate up to regional and national results.
  • COD creates jobs. Freight rail, related logistics industries, and the manufacturing businesses served by freight rail offer good entry level jobs with career potential and more skilled jobs for which community colleges are well suited to provide training.

COD Implementation

CNT’s Cargo-Oriented Development Program helps railroads and related industrial developments become greener, more efficient, and better neighbors.

Using the renewed interest in rail, and the new realities of higher priced fuel and increased rail industry investment, we seek to secure greater economic and social return for communities. Rising fuel costs and increased competition in the global economy demand that America’s freight system become more efficient, reliable, and flexible. An environmentally conscious public demands a greener supply chain. These demands are spurring a resurgence for rail.

Railroad companies, manufacturers, and shippers are investing billions in new and improved systems, such as direct connections to industrial plants and intermodal transportation, where containers from trains or ships are transferred to trucks for local distribution.

All of this makes freight rail a large – yet still undervalued – driver of economic development.

Case Studies

CHICAGO’S SOUTH SUBURBS

Cargo-Oriented Development (COD) was born as a community development strategy through CNT’s engagement with Chicago’s South Suburbs. In 2004, while pursuing transit-oriented development (TOD) strategies as a method of sustainable job creation, we found that these traditionally industrial towns were thick with high-volume freight rail lines close to expressways and intermodal freight terminals. These assets were anchoring new industrial parks in exurban areas, but were not leading to the redevelopment of vacant industrial districts. In collaboration with the South Suburban Mayors and Managers Association (SSMMA), we rolled up our sleeves and began to invent ways to bring COD to older industrial communities.

We conducted a GIS scan of the communities and identified over 3,000 acres of vacant industrial land with excellent access to freight transportation assets, in blocks large enough to attract investment. Finding that most of these properties were brownfields, we helped SSMMA connect with USEPA resources to remediate or fully assess over 800 brownfield acres in potential COD sites.

To guide our work with SSMMA, we established the Green TIME Zone, a holistic strategy for using TOD and COD in tandem to bring community development and job growth to disinvested towns. The Green TIME Zone was awarded a federal Sustainable Communities Challenge Grant, which we used to seed a development loan fund and a land bank that now plays an important role in site assembly. Our advocacy secured over $30 million in public and private infrastructure investments that are making COD sites more developable and more sustainable.

In partnership with four community colleges, we established a growing program to train area residents in certified manufacturing and logistics skills in demand by local employers. In 2013, the State of Illinois enacted the Brownfield Redevelopment and Intermodal Promotion Act (BRIMPA), a CNT-SSMMA proposal, which established a $21 million fund to spur private investments in south suburban COD. To take advantage of these new resources, we created a pipeline of potential COD projects at various stages of site or financing preparation. Several businesses employing approximately 300 workers have recently emerged from this pipeline.

OHIO

Ohio has always been the crossroads of America. Today, 47% of the US population and 52% of its manufacturing capacity are within a day’s truck drive of Columbus. And as container traffic increases from East Asia through the Panama Canal and from Southeast Asia through the Suez Canal, Ohio stands to grow again as the inland distribution point for these global connections.

Major investments are underway to capture this opportunity. In 2010, Norfolk Southern (NS) completed the $290 million Heartland Corridor project to clear bridges and tunnels for double stacked containers from Norfolk to Virginia. NS partnered with public actors in the Columbus region and the state to construct the Rickenbacker Inland Port, including a new terminal and complimentary logistics campus.

As part of its National Gateway expansion, CSX developed a hub for intermodal trains in North Baltimore and a “spoke” for that hub at Buckeye Yard in Columbus. This $850 million public and private investment will expand bridge and tunnel clearances to allow double stack containers between several Atlantic deep water ports and the Midwest. CNT helped stakeholders across Ohio understand how and where to unlock the economic development potential of freight rail investments.

CNT was a key partner with former Governor Ted Strickland on the BUILT (Broadening Urban Investment to Leverage Transit) in Ohio project, created to develop strategic investment scenarios for COD and TOD in Columbus and Cleveland, as well as TOD in Cincinnati. The COD scenarios analyzed underutilized and environmentally degraded development sites where public action could support reuse as logistics or value-added manufacturing.

More recently, CNT worked with private and public stakeholders in Central Ohio to assess the impact of in-yard technology, public-private planning, and infrastructure upgrades on freight efficiency, economic development, and the environment. Photo

MEMPHIS

Memphis is a city of contrasting problems and opportunities. While the city struggles with an unemployment rate of 11% and more than a quarter of residents live in poverty, Memphis also boasts an expanding, nationally significant industrial sector, driven by freight transportation.

Widely known as the home and central depot of FedEx, Memphis is also one of the few gateways where the eastern, western, and northern segments of North America’s Class I railroad system converge. The five intermodal freight terminals of metropolitan Memphis shift more than a million truck-size cargo containers annually, and their volume is rapidly growing to two million; only Chicago plays a larger role as an inland intermodal port.

Industrial parks are growing up around three of the region’s intermodal terminals, creating thousands of jobs, and a recently renovated terminal of the BNSF Railroad sets the current national standard for a highly efficient and environmentally friendly freight terminal in an urban community. However, two terminals stimulating new growth sit in outlying areas, without public transit access for the unemployed workers of the central city. BNSF’s terminal serves some of Memphis’ premier companies, but in much of its surrounding industrial district land fragmentation, deteriorated buildings, and brownfields discourage redevelopment. This is a situation that cries out for Cargo-Oriented Development!

In 2013, CNT helped Memphis Mayor A C Wharton craft his Blueprint for Prosperity – a bold plan to reduce poverty in Memphis by 10% in 10 years. CNT’s contributions to the Blueprint include recommendations to connect the city’s unemployed to job centers through more robust public transit and to build more consistently on the city’s assets. COD is one focus of this strategy, land use strategies that take advantage of Memphis’s freight, logistics, and manufacturing assets can help the city capture the economic value of regional growth. CNT is conducting a targeted study that will provide the cornerstone for Memphis’s COD action plan.

NEW ORLEANS — BATON ROUGE

The Greater New Orleans – Baton Rouge area, home to some two million people, is the latest region to explore Cargo-Oriented-Development strategies with CNT.

New Orleans has been a center of international trade from its earliest days, and recent developments indicate that the role is expanding. The Port of New Orleans is the country’s only international port served by six of the seven major US railroads. More than half of American grain exports (not to mention a large share of Canadian) move through the port. But it is the energy and chemical industry that make the port complex between the Big Easy and the state capital one of the largest in the US. And, unlike the Port of Los Angeles, the traffic moves more by water and rail than by less-efficient trucks.

The energy and manufacturing boom that began in 2011-2012 will greatly expand trade and transportation jobs, providing opportunity to put the long-term unemployed back to work. But this opportunity will also challenge the region to make major investments in infrastructure, workforce development, and other services. The Louisiana Economic Development agency expects a $21 billion investment in new manufacturing facilities in the next five years in the corridor between New Orleans and Baton Rouge. And the Greater New Orleans Data Center tallying up the jobs prospects from these new investments sees 42,000 new jobs in Southeast Louisiana in the next seven years.1

Despite these exciting prospects for economic renewal, long-time observers are concerned that current residents who are unemployed and underemployed may miss the prosperity wave. Especially in New Orleans neighborhoods such as Hollygrove, the unemployment rate is stubbornly higher than parish or state averages.

To manage the new demand and to minimize environmental impact, investment in new, more efficient rail and water infrastructure is essential. Planned investments for freight and passenger rail over the next five to eight years are estimated in the $800 million range. Several hundred million in port investment also is on the drawing board. The challenges to plan for an orderly and sustainable growth in this suddenly booming economy are huge.

CNT is working with local partners and a broad range of officials, business and citizen interest groups to help the region develop and capture the long-term community benefits of increased freight movement through Cargo-Oriented Development.

1 See The Transformative Possibility of the New “Energy Boom” in Southeast Louisiana at: http://www.datacenterresearch.org/reports_analysis/the-transformative-possibility-of-the-new-energy-boom-in-southeast-louisiana/

Resources

Cargo-Oriented Development: Analysis and Implementation

In a growing number of cases around the country, highlighted by the examples in this report, civic and economic development organizations and local governments are collaborating with private freight companies to realize the potential of COD for sustainable development. These collaborations will improve economies and the quality of life in regions and in established communities.

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Cargo-Oriented Development: Concept and Opportunity

Class I railroads are investing more than $20 billion annually in facilities and equipment. This creates a tremendous opportunity for mutually beneficial partnerships among the rail industry, logistics firms, and state and local governments. The benefits of this investment can be captured in substantially more efficient operations, environmental improvement, and job retention and creation through promotion of Cargo-Oriented Development (COD).

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