Norfolk Southern proposes $2 billion-plus rail corridor

By Gregory Richards
The Virginian-Pilot

Norfolk Southern Corp. is proposing a $2 billion-plus rail corridor stretching from Louisiana to New Jersey to capture more cargo being moved by trucks on highways.

The project, called the I-81 Crescent Corridor, would speed cargo shipments while reducing congestion on such highways as Interstate 81 in western Virginia, the Norfolk-based railroad said. The plan involves upgrading and expanding existing rail lines to accommodate more, faster trains; purchasing new locomotives and railcars; and building new terminals in Maryland and Tennessee and improving others.

It is far more ambitious than the roughly $253 million Heartland Corridor that Norfolk Southern is building to shave a day's transit time off cargo shipments between the port of Hampton Roads and the Midwest.

"This is exciting, this is a big deal," said Michael R. McClellan, vice president of automotive and intermodal marketing for Norfolk Southern, the nation's fourth-largest railroad.

The company announced the plan Wednesday at an analyst conference in New York.

As with the Heartland Corridor, Norfolk Southern says public dollars are necessary for the Crescent Corridor. The federal government and several states are bankrolling $163 million of the Heartland Corridor's cost, including $22 million from Virginia.

"NS is fully prepared to invest, invest a lot of money in fact, up to a point where we earn reasonable rates of return on the projects," McClellan said. "But there will be a gap between that number and what the entire project costs. We're looking for the public to recognize the benefits associated with this project... and contribute accordingly."

The Crescent Corridor's public benefits include improved roadway safety and air quality, stemming from the projected reduction of trucks on highways, he said. One million truckloads of freight may be taken off highways every year by the project, he said.

Norfolk Southern hasn't decided how much it will ask various governments to contribute, McClellan said. But, he said, Virginia has agreed to pay $40 million.

The Commonwealth Transportation Board, which sets Virginia's transportation policies, will meet June 21 to formally consider the $40 million as part of its six-year transportation plan, said Jennifer Pickett, a spokeswoman for the state's Department of Rail and Public Transportation.

The state's contribution comes out of $65 million approved by the General Assembly in April to upgrade rail corridors along Interstates 95 and 81 to reduce congestion, she said. For years, Norfolk Southern and the state have been examining ways to improve its rail line that parallels I-81.

If the project's financing all comes together, construction would begin next year.

McClellan would not discuss what work it would entail in Virginia, saying the railroad first wanted to have detailed discussions with public bodies. The plan involves two parallel north-south routes through Virginia, extending between Roanoke and Front Royal and between Lynchburg and Manassas.

The Crescent Corridor came about as Norfolk Southern was looking for ways to expand its intermodal business - the movement of truck trailers and international shipping containers - beyond such routes as its core "Golden Triangle" between Atlanta, Chicago and Harrisburg, Pa., McClellan said. The rail routes encompassed by the Crescent Corridor have little or no intermodal competition while highway congestion on interstates near the rail lines is "increasingly severe," he said.

The projects may even be supported by such large national trucking companies as J.B. Hunt Transport Inc. Hunt and several other big truck operators provided "unprecedented" levels of help to Norfolk Southern as it formulated its corridor plan, McClellan said.

A Hunt spokeswoman did not return calls for comment Wednesday. McClellen would not name the other companies.

Trucking companies use railroads to move freight for portions of long hauls where it makes sense, said Clayton Boyce, an American Trucking Association s spokesman.

However, Boyce questioned the use of public dollars to improve privately owned rail lines, rather than investing in highways.

"One should not automatically assume that freight rail investments would produce more positive results than the highway investment alternative," he said.

Gregory Richards, (757) 446-2599,

gregory.richards@pilotonline.com