Streamlined shipping

Transload terminal provides means to avoid traffic congestion in transporting goods

Posted on Mar 12, 2019 :: Global
Jessica Thiel
Posted by , Insight on Manufacturing Staff Writer

An Oshkosh rail facility that opened last June provides companies shipping their goods globally — or domestically — another avenue for doing so.

The City of Oshkosh and Watco Companies funded the $2 million, 11-acre Oshkosh Transload Terminal development with the assistance of a $1 million Transportation Economic Assistance grant from the Wisconsin Department of Transportation. It is the first and only publicly owned transload facility in the state.

The idea for the facility came about after a citizen complaint about noise with the loading of Oshkosh Corp. vehicles in a residential neighborhood near Washburn Street. This led city staff to seek a more appropriate location for the work. Eventually, they set their sights on the city’s Southwest Industrial Park.

The city expanded the project after talking to Wisconsin & Southern Railroad and Watco, its parent company. The terminal provides a place to transfer products from rail to truck or vice versa and gives businesses that don’t have access to rail an affordable option for transporting product.

The terminal includes two spurs off the main line, which is operated by Wisconsin & Southern Railroad, each more than 1,200 feet long with a ramp at the end. Both spurs include a loading area on each side, allowing companies to load various commodities for shipping.

Jason Murphree, commercial director for Kansas-based Watco, says the city and company, which operates the facility through an agreement with the state, have seen great success thus far. Oshkosh Corp. and five other companies statewide use it to ship commodities such as roofing, potato meal and sand, in addition to Oshkosh Corp. vehicles.

“This transload opens up that state railroad asset to … more shippers that may not be located along the state’s railway system. Now through this transload, they can access that state railway system, where before they might not have been able to.” he says

Shipping by rail offers many benefits, Murphree says. Every rail car can accommodate the volume of approximately four trucks, so for companies shipping large volumes, rail offers a smart solution. While rail transport isn’t as fast as truck, it offers easier loading and unloading for certain commodities, he says.

Trucker availability also has become a major issue, Murphree says. Railroads need only two people to operate 100 rail cars. It would take 400 individuals to manage the same amount of material by truck.

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In addition, rail is more environmentally friendly, avoids traffic congestion, circumvents fluctuations in gas prices and saves wear and tear on roads. It’s possible to move one ton-mile of freight 470 miles on one gallon of diesel, which is much more efficient than a truck, Murphree says.

“You can get four trucks into a rail car. You’re going to find economies of scale there in the shipping. You’re going to pay one rate for a rail car as opposed to paying four trucks,” he says.

Shirley Malski, international trade consultant at the University of Wisconsin-Oshkosh Small Business Development Center, says the facility offers opportunities to ship globally as well as domestically. Oshkosh Corp. vehicles, for example, can go to any military base in the United States or get loaded onto a ship to reach a global location. Watco can ship to any port through Chicago.

“What’s nice about having it local … is that we can avoid trucking to Chicago, or if we don’t want to avoid it, we can at least look at the options,” she says.

While the terminal is not an intermodal facility and does not handle containers, it can accommodate imports and exports. The commodity would simply need to be transloaded onto a vessel or into a container at some other point.

Kelly Nieforth, economic development manager for the City of Oshkosh, says the city is optimistic about the economic development opportunities the terminal will provide. The facility lies in a newly expanded area of the Southwest Industrial Park with updated sanitary, water and stormwater infrastructure. It also offers companies convenience, with proximity to Interstate 41.

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“If (businesses) want the option to ship any of their products or if they want to ship in any commodities they might need to make their products, we see this as a great asset for them to utilize,” she says.

Murphree says four new major customers are expected to come online in the vicinity of the facility in the next two years, and the rail activity is showing shippers Oshkosh is a viable and desirable location.

Later this year, Watco plans to invest $5 million to construct a 20,000-square-foot rail-served warehouse in the Southwest Industrial Park. It will provide the ability to load and unload 12 cars per day, five days a week during 20-hour-per-day warehouse operations. It’s expected to open by the fourth quarter of 2019.

The warehouse facility will cater to the needs of the paper industry in particular. One partner, Midwest Paper Group, has already come on board. Rail works especially well for transporting brown paper, Midwest Paper Group’s primary product, Murphree says. Unlike white paper, which is shipped more locally and regionally, brown paper ships nationwide, so rail makes sense.

While the paper industry is a special focus, Murphree says the company can cater to the needs of many industries and is interested in talking to any company that thinks it could benefit from the facility’s services. Though trucking may still be the best option in some circumstances, Watco wants companies to know other options
are available.

“Really, I think the great benefit is for a customer that may not be shipping rail today,” Murphree says. “They can call us up and they really don’t have to worry about all the details of it. We take care of all the behind-the-scenes things that are required to ship by rail. Really, all they’ve got to do is get the product to the terminal, and we take it from there.”