Project: Charlotte Regional Intermodal Terminal

Synopsis

The Charlotte Regional Intermodal Terminal at Charlotte-Douglas International Airport (CLT) was completed in 2014. The $96 million truck and rail freight facility operated by Norfolk Southern (NS) Railway replaced a previous NS intermodal terminal that had reached capacity just northwest of downtown Charlotte on a site where expansion was not possible. A pre-project economic impact analysis indicated that the that the facility would create more than 5,000 jobs in the region and $9.5 billion in economic impact over a 20-year period. Due to the rail operator outsourcing last mile transportation and logistics and the shift in global shipping practices to sealed container shipments of consumer-ready goods that eliminated opportunities for value-added manufacturing, this did not occur. The facility plays an important role in the region’s economic development marketing package which depends heavily on ample transportation modes and connections, though it is unclear if the facility itself has resulted in real estate development or business location or expansion. For example, the intermodal terminal was a key factor in Amazon’s decision to locate an 855,000 square foot Robotics Fulfillment Center in Charlotte, bringing 3,000 new jobs to Charlotte and adding $690 million to North Carolina’s economy. However, the primary attraction for that investment was the site’s excellent highway transportation access, the same transportation access that attracted the intermodal terminal itself.

Location & Transportation Connections

The Charlotte Regional Intermodal Terminal is located on the southwest portion of the CLT airport complex between the end portions of the 18R/36L and 18C/36C runways. Trucks enter the intermodal terminal from West Boulevard/North Carolina Highway 160 (NC 160), which is exit 6 on I-485 approximately four miles south of the I-485/I-85 interchange. The entrance to the terminal is approximately ¼ mile from the exit on I-485.

The region is served by four interstate highways: I-85, I-485, I-77 and I-277. Other important roadways near the intermodal facility are U.S. Route 74, which runs east-west immediately north of the airport and just south of I-85, and North Carolina Highway 160 (NC 160) which runs along the south portion of the airport. South of the intermodal terminal entrance, NC 160 turns continues south/southwest through an interchange with I-485 on to the South Carolina state border where it terminates near Tega Cay, SC.

The airport is located west of Charlotte just inside the I-485 beltway. Charlotte Douglas International Airport (CLT) is one of the busiest airports in the world with an average of 1,400 flights arriving and departing per day, bringing nearly 120,000 passengers to, from, or through Charlotte. CLT is approximately 240 miles from Atlanta, the next nearest international airport.

The nearest deep-water port is Port of Wilmington, NC, approximately 200 miles east of Charlotte. North Carolina Ports operates an inland port in Charlotte (“Uptown Terminal”) served by CSX and Queen City Express. The inland port operates daily express rail service to and from Port of Wilmington, with a 1-day transit time and no dwell time. Norfolk Southern Railway (NS) operates the Charlotte Regional Intermodal Terminal, which serves Port of Charleston, South Carolina. The previous NS facility in downtown Charlotte reached capacity in the early 2010s with no room to expand, which lead the operator to develop the facility at CLT. Together, CSX and NS bring more than 500 trains through the region every week.

Community Character & Project Context

Charlotte is in the Charlotte-Concord-Gastonia NC-SC Metro Area, which has a population of over 2.7 million (2021) and employment of more than 1.3 million (2022). The regional population has grown steadily over the past decade at an average rate of 1.6% per year. During the same period, employment grew at an average rate of 2.7% per year. In fact, with the exception of the 2008-2010 period following the 2008 financial crisis and 2020, the region has experienced positive job growth every year since 2004. The economy has centered around the financial services industry as far back as the Carolina Gold Rush of the early 1800s. More recently, a series of “megamergers” between major national banks in the 1980s and 1990s made Charlotte the second largest banking center in the U.S., behind New York.

In terms of manufacturing jobs, the region experienced a dramatic turnaround beginning in 2010, after steady losses between 2000 and 2010. Though manufacturing in the region still has not returned to pre-2000 era job counts which were upwards of 150,000, the MSA has steadily added manufacturing jobs at an average rate of about 1.5% per year since 2010, for a total of more than 110,000 in 2022. This growth coincided with the advent of the automotive and auto parts manufacturing industry in the region, which currently comprises the largest share of manufacturing jobs (13%) in the region, followed by the related industries of fabricated metal products (11%) and plastics and rubber products (10%).

The 2040 Metropolitan Transportation Plan (MTP), produced by the Charlotte Regional Transportation Planning Organization (CRTPO, the MPO for Mecklenburg County, Iredell County, and a portion of Union County) was drafted between 2013 and 2014, the period during which the freight terminal was built. The freight chapter of the MTP reports that freight carried to and from the region overwhelmingly travels by truck. Between 2011 and 2040, tons of freight traveling by truck were expected to increase 25%, from 63.7 million tons to more than 79.4 million tons. In terms of ton-miles, truck freight was projected to increase by 54% while the value of truck freight was expected to increase by nearly 40%. While freight moved by rail represented a much smaller amount in terms of tons and value, it was projected to grow significantly, from just over 1 million tons to nearly 1.8 million tons, with value increasing by more than 130% from $93.6 million in 2011 to more than $130.1 million by 2040.

Project Description & Motives

Charlotte is located on the Norfolk Southern Main Line, the primary rail corridor running along I-85 through central North Carolina from Charlotte through Greensboro to Atlanta. The prior NS facility in Charlotte – the Uptown Terminal - was located on a 40-acre site just northeast of the city’s center near the I-77/I-277 interchange. A senior vice president at NS stated, “In 2006, we were capacity-constrained at our old location … We knew on a going-forward basis even if we were in a down cycle, Charlotte would be a big area for us. The trend is for companies to move their manufacturing plants to the U.S. even if they are shipping around the world. Charlotte has land, people, labor force, intermodal and air. That’s what they are looking for.” Then, in 2007, NS launched its $2.5 billion Crescent Corridor project to create a “high-capacity intermodal route” from the Mid-Atlantic to the Gulf Coast. The Charlotte facility needed to expand as part of this project. At the time that facility was originally built, it was on the outskirts of the city. However, as the city grew up around it, further expansion was constrained. This led NS to pursue a new site.

As part of its long-range strategic planning, CLT airport had determined that a third parallel runway was necessary to accommodate continued growth driven by its partner airlines. The ideal site from an operations standpoint would require a lot of expensive grading and site preparation. Leasing a site between the existing 18R/36L and new 18C/36C runway to NS for the new intermodal terminal allowed CLT and NS to share the cost of site preparation. (Runway construction took place between 2007 and 2009).

Though airports and truck/rail intermodal terminals are not related operations in terms of shared cargo movements, they are highly compatible uses in terms of noise and hours of operation. The rail terminal can set up and break down trains around the clock without disturbing neighbors and the intermodal terminal is not disturbed by aircraft noise the way another user might be.

Initially, NS leased an approximately 200-acre site within the airport perimeter fence between the 18R/36L and 18C/36C runways, with the option of expanding to an adjacent site just beyond the airport fence. Reportedly, Norfolk Southern paid the airport $1 million per year for the site lease. However, in 2019 NS purchased the existing site from CLT and retained the option to acquire the through-the-fence-site in the future.

The Charlotte Regional Intermodal Terminal at Charlotte-Douglas International Airport (CLT) was completed in 2014 at a cost of $96 million. Trucks enter the intermodal terminal from West Boulevard/North Carolina Highway 160 (NC 160), which is exit 6 on I-485 approximately four miles south of the I-485/I-85 interchange. The entrance to the terminal is approximately ¼ mile from the exit on I-485. The taxiways for aircraft to access the third runway do cross active railroad tracks, thus it was necessary to build underpasses for the tracks so the trains pass below the aircraft taxiways.

Transportation Impacts

At the time of construction, NS reported that the facility would have the capacity for 250,000 annual cargo lifts. The operators have declined to release operational information, however a representative of the airport indicated that the facility appears to be operating as intended.

Demographic, Economic & Land Use Impacts

A pre-project economic impact analysis indicated that the that the facility would create more than 5,000 jobs in the region and $9.5 billion in economic impact over a 20-year period. Two key market factors prevented the original expectations for the facility from being realized. First, the rail operator made a significant change in their business model, and instead of handling last mile transport with NS employees and trucks, they have largely contracted this function out to the transportation logistics company J.B. Hunt. As a result, a lot of the economic impact of trucks using the facility occurs elsewhere rather than being attributed to NS operations in Charlotte. The second factor was the dramatic shift in global shipping practices in favor of sealed container shipments of consumer-ready goods. This eliminated the opportunity for manufacturing companies to establish facilities near the terminal to provide value added parts or assembly. The facility itself is highly automated. Though current employment at the facility is not available, NS indicated that the facility was established with a crew of 15 employees.

Real estate brokers in the region have stated that the facility is not a primary driver of demand for industrial real estate though it is an “added perk”. In 2014, a senior vice president at CBRE told the Charlotte Business Journal that freight-services companies quickly filled a new building at Steele Creek Commerce park approximately 2 miles south of the rail facility. She further explained, “There is a very healthy amount of activity at this time with tenants seeking large distribution spaces … We are not hearing that these groups are specifically looking at Charlotte due to the intermodal terminal. However, for many of them, it is a desirable feature that contributed to them choosing Charlotte, so it is definitely having a positive impact.”

A broker quoted for a 2020 article commented, “It’s not spurring any warehouse development, but it wasn’t spurring any development on North Graham Street either”, referring to the terminal’s previous, landlocked location.

A spokesperson for the airport stated that the Charlotte Regional Intermodal Terminal was a key factor in Amazon’s decision to locate an 855,000 square foot Robotics Fulfillment Center in Charlotte, bringing 3,000 new jobs to Charlotte and adding $690 million to North Carolina’s economy. However, the primary attraction for that investment was the site’s excellent highway transportation access, the same transportation access that attracted the intermodal terminal itself.

Non-Transportation Factors

Two key non-transportation factors prevented the Charlotte Regional Intermodal Terminal from fulfilling the expectations established when it was created. First, the decision by NS to outsource last-mile transportation and logistics resulted in the impacts of those trucking jobs occurring elsewhere rather than being attributed to the intermodal terminal. The second factor was the dramatic shift to sealed container shipments of consumer-ready goods that eliminated opportunities to provided value added manufacturing near the intermodal terminal.

Citations

Associated Press, “Norfolk Southern shows Charlotte airport yard”, WBTV, 08 Feb 2014 (https://www.wbtv.com/story/24406309/norfolk-southern-shows-charlotte-airport-yard/)

CRTPO 2040 Metropolitan Transportation Plan, Chapter 17.

Huguley, C. “Does Charlotte’s Intermodal hub stack up as a major economic development tool?”, Charlotte Business Journal, 19 Mar 2020 (https://www.bizjournals.com/charlotte/news/2020/03/19/does-charlottes-intermodal-hub-stack-up-as-a-major.html)

Norfolk Southern Crescent Corridor Brochure (https://web.archive.org/web/20160303214356/http://www.thefutureneedsus.com/images/uploads/crescent-corridor-brochure_1.pdf)

O’Daniel, A. “So how did Charlotte become a banking center?”, Charlotte Business Journal, 4 Sept 2012 (https://www.bizjournals.com/charlotte/blog/bank_notes/2012/09/so-how-did-charlotte-become-a-banking.html)

STV Inc. project summary webpage (https://stvinc.com/project/charlotte-intermodal-facility#:~:text=The%20new%20facility%20has%20the,a%20%249.5%20billion%20economic%20benefit)

U.S. Bureau of Labor Statistics Current Employment Statistics, 2000-2022.

U.S. Bureau of Labor Statistics Quarterly Census of Employment & Wages, 2000-2022.

U.S. Census Bureau 2021 ACS 1-Year Estimate.

U.S. Census Bureau County Business Patterns for Charlotte-Concord-Gastonia, NC-SC MSA (2021).

Williams-Tracey, L. “Norfolk Southern’s intermodal facility in Charlotte grows with global trade”, Charlotte Business Journal, 20 Jun 2014.

Wilson, L. “Exclusive: Behind the scenes of Charlotte’s Amazon Fulfillment Center”, WCNC Charlotte, 20 Nov 2019 (https://www.wcnc.com/article/features/behind-the-scenes-amazon-charlotte/275-956ebcca-e133-4553-b4b1-c7bf1daa9530).

Interviews

Footnotes

Case study developed by EBP.