Q&A with John Nations, president and CEO of the Bi-State Development Agency, and Mary Lamie, executive director of the St. Louis Regional Freightway District
IBJ: Why did Bi-State launch the St. Louis Regional Freightway District?
Nations: We’re very proud of that. St. Louis has key transportation assets. This is the northernmost point you can go on the Mississippi River completely unrestricted by locks and dams. There is tremendous highway capacity and airport capacity. Six of the seven Class I railroads come into the St. Louis region. Whether you measure by total tonnage or by value, the St. Louis Port District ranks as the second- or third-busiest port in the country. We have a lot of good infrastructure in place.
The East-West Gateway Council of Governments did a freight study that pointed out that we have all these assets in an ideal location. So, why were we not more of a logistics center? While there were multiple people involved in freight, it became clear that there was no one person or organization marketing for the region, advocating for the region in logistics and the freight economy. We put a business plan together for East-West Gateway Council of Governments, and in September of 2014 we were unanimously selected to be the freight district for the St. Louis region.
IBJ: Why freight?
Nations: It’s an opportunity for growth for this region. Cities and regions are looking at where their individual cities can compete. St. Louis does very well in education, financial services and health care. And when you look at freight and logistics, the St. Louis region has a tremendous amount of assets. This could really be a growth sector. The freight study also pointed out that between now and 2040 there is a projected growth in freight of 30 percent. So, when you look at the country, St. Louis sits at a very advantageous place.
In 2014, both Missouri and Illinois ranked in the top five for states in terms of tonnage and value moved on freight rail. We are a key logistics portion of the country. With the opening of the new Panama Canal, everyone is looking for opportunities. This is an area we believe that we can grow our economy. The purpose of the freight district is to take on that responsibility. To grow and enhance this sector.
Lamie: The freight study indicated other regions had very aggressive marketing campaigns and we were being outmarketed. Efforts to attract site selectors for our region were not regional and focused on individual cities and counties. Our role is to promote the bi-state region. If we are collectively marketing the bi-state region and all of our competitive advantages, everyone stands to benefit. Our job is to go out and promote those competitive advantages; attract site selectors; have them recognize the region’s competitive advantages; and start bringing their manufacturing and logistics industries to our area.
IBJ: What’s been accomplished so far?
Lamie: The first thing is that we launched the freightway.com website. It has an interactive map that tells you everything you need to know about our multimodal assets and our industrial real estate sites. Our target market is site selectors. The website has identified the top industrial real estate sites in the bi-state area. Before, site selectors considering the area had to work with a lot of different offices and different entities. We’ve streamlined that process. Now you can go to the website and find all the sites that meet the criteria for the next Amazon or Home Depot distribution center or fulfillment center.
We’ve also continued to build partnerships and relationships with other regions both in the Midwest and throughout the Gulf Coast area to continue to tell our story; to let others know what we have to offer from a competitive logistics perspective. It’s an opportunity to meet shippers and carriers who are deciding how their commodities are going to move from one part of the world to the other part of the world. And it is also an opportunity to work collaboratively with them to decide where transportation corridors will be throughout the Midwest, and throughout the nation, and it allows us to work with them directly.
We are working closely with my counterpart in Kansas City, supporting each other for improvements to Interstate 70. We are also working with the Port of Kansas City. We work with the Chicago area. Chicago is obviously one of the top freight hubs in the nation, but they have a lot of congestion. Our message is that we are a good backup to Chicago when they are having weather or congestion issues. So, you need to consider investing in our infrastructure.
We are working with Paducah and Louisville to see how we can improve our barge movements and try to maximize those movements from the Midwest to New Orleans. We are working with New Orleans. We went to New Orleans earlier this year and signed a Memorandum of Understanding with the Port of New Orleans. From a marketing perspective, it shows we offer a tremendous amount to shippers and carriers. And symbolically it wasn’t just the Freightway, it wasn’t just John Nations and myself going down there, we had our three public port representatives from two states. We had America’s Central Port in Granite City, Illinois; the St. Louis Municipal River Terminal that is operated by the City of St. Louis; and the Kaskaskia Regional Port District in Illinois. It was a regional effort. At times, those ports are in competition with each other but we were trying to promote the whole region. The goal was that as we work with shippers and carriers, any success that any of them have, benefits the whole region.
Nations: One of the five elements of the business plan that East-West Gateway was looking for was a freight development and needs analysis plan. There wasn’t a needs analysis for freight in St. Louis as to what the infrastructure was, where it was and what needed attention. One of the biggest things Mary was able to accomplish was to get public entities and private entities and different modes of transportation to agree on a needs analysis, which resulted in the Merchants Bridge becoming the No. 1 priority on the list. Already we have bi-state, bipartisan, political support for that project and already have gotten pledges for two-thirds of the cost for the bridge replacement.
IBJ: Most St. Louisans have never heard of the Merchants Bridge. Why was that No. 1 one?
Nations: By the combination of the Merchants and the MacArthur Bridges, more freight moves across the Mississippi River at St. Louis than anywhere else. They are two of the oldest structures across the Mississippi. So, Mary in a very short period of time did something that people still marvel at. She got all the modes, all the sectors, public, private, to come up with the needs analysis and the infrastructure list that resulted in everyone coalescing around the Merchants Bridge being the No. 1 priority. That is a key accomplishment.
IBJ: How did you get all of those different groups to agree on the Merchants Bridge as the top infrastructure priority?
Lamie: It sells itself because the private sector recognizes the value of us all working collectively together. And, when we asked the private sector what we needed to do from an infrastructure perspective for you to stay in the St. Louis area and create opportunities for growth, they said, you need to invest in the Merchant Bridge; you need to invest in Interstate 270, you need to invest in first mile/last mile projects. Next to the interstate system, the Merchants Bridge is one of the most important transportation projects in the region, maybe even in the nation.
IBJ: Why would the barge industry agree that a railroad bridge is the top priority?
Lamie: It surprised me, too, but they said that in order for us to have low competitive barge rates we have to have low competitive freight rail rates and, more importantly, we have to have that interconnectivity with all the modes of transportation. If we don’t have good rail access to the St. Louis area, that drives our costs up.
IBJ: What needs to be done to the Merchants Bridge?
Lamie: While the bridge has two sets of tracks, only one track can be used at a time because it wasn’t designed or built 126 years ago to carry today’s loads. The superstructure needs to be replaced so that it will be able to handle two trains at the same time.
IBJ: What is the project cost?
Nations: $200 million. $125 million is already available through a commitment by the Terminal Railroad Association of St. Louis and its members. We are working on securing the last one-third. An application for a grant for federal funding will be resubmitted with the help of the Missouri Department of Transportation.
IBJ: What are the chances of receiving the grant?
Nations: We can’t predict that. What we do know is that we have an application for a project that is of national significance. We believe it is a very strong application and have been told so by multiple people. It has the unanimous support of the bi-state region as well as our U.S. senators and congressional delegation that this is a priority. So, what we believe is that we have an application that ought to compete very well nationally for federal dollars on a critical infrastructure program.
Lamie: We also feel it is a model for private-public partnerships with two-thirds of the funding coming from the private sector. The bridge is unique in the fact that six Class I railroads are utilizing it as well as Amtrak, so from a commerce perspective it really serves the entire nation. We’re hopeful they will make federal funding announcements sometime in the spring of 2018. Part of the criteria for evaluating these projects is project readiness. The Terminal Railroad Association will essentially have those plans completed by the fall of this year and if funding were available, they could begin construction as early as this fall.
IBJ: What comes next?
Lamie: Replacing the Interstate 270 Chain of Rocks Bridge over the Mississippi River and improving the I-270 corridor from Illinois Route 111 to Lindbergh Boulevard in Missouri. The I-270 outer belt is one of the most traveled freight corridors in the region and is a link to the national freight network with connections to Interstate 44, Interstate 55, Interstate 64 and Interstate 70. The Chain of Rocks Bridge has experienced rising maintenance costs due to the age of the structure and increases in traffic volumes. Unfortunately, the construction schedule could be over a 20-year period of time. We’re working with regional and national leaders to help maximize infrastructure investment to reduce travel time delays for commuters and the freight industry. Infrastructure investment for projects like I-270 is critical to ensure both the region and the nation have a reliable and efficient transportation system and have a freight network that remains competitive with the global market.