D E C AT U R I N T E R M O D AL R AM P O P P O R T U N I T Y
F I N AL R E P O R T
AU G U S T 3 1 , 2 0 1 5
1
Agenda
Executive Summary
Terminal Overview
Shipper Opportunities and Requirements
Conclusions and Next Steps
2
Project objectives and approach
Purpose of Study Study Approach
• Soybeans and processed soybeans are major
export commodities in international containers
from central Illinois
• Railcars and empty containers are generally
brought into central Illinois to be loaded with
soybeans for export from locations such as
Chicago and the east coast
• Increasing the volume of imports coming
through the Decatur, Illinois intermodal terminal
would increase the local supply of containers
and railcars for outbound export soybean
shipments
• Having a larger supply of equipment locally
should result in lower costs and improved
equipment availability
• This study was performed in order to assess
importer interest in shipping through the
Decatur ramp and to better understand their
requirements
• Zubrod/Clair conducted an analysis of PIERS
data to assess overall import volumes to
central Illinois and to identify major importers
PIERS data is a product of IHS Company
PIERS data is based on import and export
shipping manifests
Analysis was conducted of the 4/1/2014 to
3/31/2015 period
Central Illinois considered to be zip codes
(at 3-digits) 615, 616, 617, 618, 619, 625,
626, 627, which includes Peoria, Normal,
Champaign, Danville, Decatur, Springfield,
and Mattoon
Analysis performed in May and June, 2015
• Zubrod/Clair conducted interviews of leading
containerized freight importers to central Illinois
to better understand their current supply
chains, interest level in shipping through the
Decatur ramp, and any requirements/inhibitors
Interviews were conducted by phone
between June and August, 2015
3
Key findings
The Decatur terminal is currently underutilized, and could provide a lower cost shipping
option for soybean exports
The Decatur terminal location could be a good option to ship to central Illinois locations
Based on PIERS data, there are an estimated 21,500 containers imported to central IL,
split across US port on both coasts
Most companies interviewed are very interested in having Decatur as a viable option for
container imports
Interviewees see the main advantage as being lower drayage cost versus Chicago
Many interviewees would be open to having longer transit times and less frequent
intermodal rail service
Caterpillar, the biggest container importer to central Illinois, has developed a transload
model in the Chicago-area, and is unlikely to shift to the Decatur terminal
ADM and the Midwest Inland Port team are trying to address barriers to Decatur ramp
usage and further educate potential customers
The ISA and Illinois soybean farmers should support efforts to increase import volumes
through the Decatur terminal
4
Agenda
Executive Summary
Terminal Overview
Shipper Opportunities and Requirements
Conclusions and Next Steps
5
The Decatur terminal is owned and operated by Archer Daniels Midland Company (ADM)
The intermodal terminal was developed by
ADM and opened in 2013
The terminal includes access to three Class
1 railroads – Canadian National Railway
(CN), CSX Railway (CSX), and Norfolk
Southern Railway (NS)
These three railroads connect to other
North American Class 1 railroads
Together, CN, CSX, and NS provide rail
access to Atlantic, Gulf, and Pacific coast
ports
Decatur has good access to major
roadways, including I-55, I-57, I-72, I-74,
and US Highway 51
Source: Google Maps
Arial View of Decatur Terminal
6
Soybeans and other agricultural products are key export commodities in intermodal containers
Soybeans are shipped in international
containers from central Illinois to Asia
Illinois accounts for 66% of containerized
soybean exports
Soybean exports take advantage of the low
cost “backhaul” move to Asia
The move from Asia to the US with consumer
goods is the high paying “headhaul” move
Containers from the US to Asia are inexpensive,
because a low paying load is better than
shipping the container back to Asia empty (with
no revenue)
Containers are attractive for some Asian
customers because of the lower shipment size
Intermodal containers hold about 20 tons
Containers are loaded and remain intact for
identity control
Intermodal transit times are typically faster than
via bulk transport
Top Central Illinois Export Commodities
Source: PIERS database of central Illinois exports, 4/1/2014 –
3/31/2015; Zubrod/Clair analysis
Commodity
Container
Volume
%
Total
DDG 14,465 26%
Seed Grains 12,899 24%
Soy Soybeans 3,616 7%
Corn 1,952 3.6%
Corn Gluten Meal 1,253 2.3%
Sugar Syrup 1,074 2.0%
Paper 1,018 1.9%
Better Yellow Corn 958 1.8%
Lysine Amino Acid 767 1.4%
Soybeans 742 1.4%
All Other 15,850 29%
TOTAL 54,592
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The Decatur terminal is currently underutilized, and could provide a lower cost soybean shipping option
Most import containers today travel to
Chicago-area intermodal terminals and are
then trucked to central Illinois
Containers also trucked from St. Louis and
Indianapolis terminals in smaller numbers
When empty, containers are trucked back to
Chicago terminal
Currently trains of empty containers are
brought to Decatur then loaded and put back
on the train for the rail move to the port
Increased import volume into the Decatur
ramp would create a supply of local
containers for soybean exports
A local supply of containers should lower the
intermodal transport cost
Source: Midwest Inland Port
International Container Unloading
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Agenda
Executive Summary
Terminal Overview
Shipper Opportunities and Requirements
Conclusions and Next Steps
9
The Decatur terminal location could be a good option to ship to central Illinois locations
Truck miles from the Decatur terminal to central Illinois receivers is much
lower than from Chicago-area intermodal terminals
Traffic congestion in and around Chicago can cause delays that magnifying
the mileage impact
Decatur
Terminal
Chicago-Area Intermodal Terminal Locations
LPC (BNSF) Landers (NS) 59th St. (CSX) Harvey (CN)
De
sti
na
tio
n
Cit
ies
Bloomington 47 90 131 136 121
Champaign 44 105 127 132 118
Peoria 87 121 162 167 153
Decatur <10 138 171 176 161
Springfield 49 157 198 203 189
Estimated Truck Drayage Miles (1-way)
Source: Railroad websites; Google Maps; Zubrod/Clair analysis
10
Based on PIERS data, there are an estimated 21,500 containers imported to central Illinois
An estimated 21,500 containers (36,500
twenty-foot equivalent units, or TEU’s) were
imported to central Illinois from 4/1/2014 to
3/31/2015 Average of less than 100 per day is less than
one double stack intermodal train per day
Volume is split across a range of ports Los Angles/Long Beach accounted for nearly
one-third of volume
Seattle/Tacoma was the second largest
inbound port, accounting for about 15%
Ports on the east coast account for more than
50% of import volume, but no single east coast
port accounts for more than 10% of import
volume
There may also be volume through
Canadian ports to central Illinois customers
Dispersion of volume could make intermodal
service to Decatur more challenging
Top Import Ports
For Central Illinois Imports
Source: PIERS database of central Illinois exports,
4/1/2014 – 3/31/2015; Zubrod/Clair analysis
Port
Container
Volume
%
Total
Los Angeles/Long Beach 6,982 32%
Seattle/Tacoma 2,934 14%
Norfolk 2,117 10%
Wilmington, NC 1,849 9%
New York 1,808 8%
Houston 1,477 7%
Chester, PA 1,328 6%
Charleston 1,125 5%
Baltimore 589 3%
Savannah 515 2%
All Other 785 4%
TOTAL 21,509
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Zubrod/Clair interviewed 10 of the top container importers into central Illinois
Companies Interviewed Topics Discussed
• ADM
• Anonymous
• BRG Sports/Bell Helmets
• Bunnomatic
• Caterpillar
• Komatsu
• The Libman Company
• Mitsubishi
• Rural King
• ThyssenKrupp
• Midwest Inland Port was also
interviewed
• Current import volume and lanes
• Interest in Decatur ramp and
potential benefits
• Requirements to make Decatur
ramp a viable option
• Potential inhibitors
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Most companies interviewed are interested in having Decatur as a viable option for container imports
Most interviewees were interested in the
potential for the Decatur terminal
One company ships intermodal inbound
today — as a part of manifest trains
Four companies have been in discussion
with ADM, brokers, or other stakeholders
about using the Decatur ramp
If Decatur terminal had competitive
offering, most interviewees would be
enthusiastic to use it
Interest Level in Decatur Ramp
Number of Interviewee Mentions
0
3
6
9
High Medium Low
Source: Interviews
13
Interviewees see the main advantage as being lower drayage cost versus Chicago
The primary Decatur terminal
advantage interviewees mention
was the lower drayage cost Shorter mileage
Less congestion
Less variability
Several other benefits were
mentioned by a single interviewee
Key Decatur Ramp Advantages
Number of Interviewee Mentions
0
3
6
9
Low CostDray
LowerCarbon
Footprint
Good forLocal
Economy
Better forDrayageProvider
LongerPickupTimes
Source: Interviews
14
The Decatur service has to be competitively priced on a total delivered cost basis
To be of interest to shippers, the Decatur service would have to be equal to
or less expensive than options through Chicago… …particularly if shippers have to give up some degree of service (transit time or
frequency)
There should be drayage savings due to shorter length of haul and less
traffic congestion
Rail rates to Decatur have been a sticking point. So far the railroads have
not offered rail rates that are competitive with their rates to Chicago Rail rates for interchange moves (involving more than 1 railroad) are likely to be
higher and add to the total transit time
Conversations continue between the railroads and ADM/Midwest Inland Port
Source: Interviews
15
Many interviewees would be open to having longer transit times and less frequent intermodal rail service
Decatur Terminal Service Requirements
Number of Interviewee Mentions
0
3
6
9
Requires EqualTransit Time
Requires HighFrequency
Yes No
Most of the companies interviewed
would support the Decatur service even
if it required a longer transit time than
Chicago
Typically one to two days longer was
acceptable
Interviewees were split as to whether
they needed high frequency of trains
Three require high frequency to support
container flow and consistent
shipments
Three are okay with service two to
three days/week
Source: Interviews
16
Interviewees also suggest that having ship lines on board and a supply of draymen are important
Other Potential Success Factors
Number of Interviewee Mentions
0
2
4
Having supply chain partners and
supporters in place will be important to the
Decatur terminal’s success Several interviewees suggested that a
drayage network will have to be
developed in Decatur as well as a chassis
pool (chassis are the frame and wheels
that the container is placed on for truck
transport)
Ship lines control the routing of many
international shipments (international
containers are controlled by the ship lines)
so will have to support shipping to Decatur
Shipper-friendly rules around storage and
free days was mentioned by one
interviewee
One interviewee suggested the facility
should have customs clearance
capabilitiesSource: Interviews
17
Caterpillar accounted for 40% of import container shipments to central Illinois
Caterpillar accounts for about 40% of
central Illinois imports
After Caterpillar the import volume is
relatively widely distributed among a
large number of companies
There were only four companies with
more than 1,000 container imports in
the 12-month period assessed
Based on interviews, several
companies have more containers/ year
than the PIERS data would suggest
Cumulative additional 2,700
container imports
Top Importers to Central Illinois
Note: Zubrod/Clair combined similar company names where
applicable
Source: Interviews; PIERS database of central Illinois exports,
4/1/2014 – 3/31/2015; Zubrod/Clair analysis
Company
Container
Volume
%
Total
Caterpillar 8,680 40%
Mitsubishi 2,739 13%
ThyssenKrupp 1,123 5%
BRG/Bell Helmets 1,078 5%
Komatsu 764 4%
Vesuvius USA 569 3%
Rural King 539 3%
Horizon Hobby 264 1%
ADM 210 1%
C Preme 10 186 1%
All Other 5,359 25%
TOTAL 21,509
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Caterpillar has developed a transload model in the Chicago-area that it expect to continue to use
Caterpillar has developed a supply chain
model based on shipments to Chicago Transload freight from containers to
trucks near Chicago
Match import and export loads to
maximize truck utilization to and from
the transload facility
Keep containers near Chicago, rather
than at production facilities
They have assessed the Decatur option
in the past and found that it was not as
attractive as their current transload
model
Resulting import volume to central Illinois
excluding Caterpillar is about 13,000
containers/year, or about 50/day (based
on PIERS data)
Source: Interviews; PIERS database of central Illinois exports, 4/1/2014 –
3/31/2015; Zubrod/Clair analysis
19
The Midwest Inland Port and ADM team are trying to address barriers to Decatur ramp use
Working to get additional rail service Discussions for rail from the west coast
Obtaining ship line support Many of the large ship lines are supportive
ADM has program to guarantee a load outbound for a loaded inbound container
Improving drayage network ADM drayage company provides service and has a chassis fleet
ADM Logistics has relationships with many other drayage companies
Planning to obtain customs clearance capabilities Filing for customs port of entry status
Can provide service to support even flow of containers Capability to store containers at the terminal and send to customer over several days
Source: Interviews
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Potential next steps
The ISA, its member farmers, and the agricultural community in the state of
Illinois should support efforts to increase import volumes through the Decatur
ramp to facilitate lower cost agricultural products container exports Educate and publicize the importance of export intermodal to the soybean and general
agricultural supply chain from Illinois
Provide support to Midwest Inland Port and ADM in their efforts to solicit involvement
from partners and stakeholders, including not only shippers, but also potentially
railroads
Provide support to Midwest Inland Port and ADM in their efforts to obtain customs
clearance status for the facility
Provide support to Midwest Inland Port and ADM at events involving stakeholders and
other influencers (e.g., tour of facilities for members of foreign consulates the week of
October 19, 2015)