The South Carolina Ports Authority cut the ribbon on the site of its second inland port in Dillon in April. Growth in the intermodal sector has driven the success of South Carolina’s first inland port, Inland Port Greer, which opened in November 2013, and handled a calendar-year record of 124,817 rail moves in 2017, 20.4 percent higher than its 2016 volume.

Inland Port Greer, noted a report from Colliers International, the industrial real estate specialists, “is surrounded by 94 million consumers within 500 miles and also serves to extend the Port of Charleston’s intermodal reach by 212 miles.” Inland Port Greer also sits smack dab in the middle of a key emerging industrial market: the Greenville-Spartanburg-Anderson area.

Many seaports are strained to their capacity limits, and increased volumes of containers at coastal ports can also create problems for local warehousing and transportation. Lots of seaports are planning infrastructure improvements, but congestion will still challenge the distribution of containerized shipments to inland retailers, manufacturers, and consumers.

The inland port concept began with the desire to increase throughput capacity at seaports. This means sweeping cargo off the docks to ready the dock for the next vessel. Connecting an inland location via rail allows for large volumes of cargo to be amassed, processed, manipulated, and distributed to a regional population. The lesson for shippers is this: if your business model requires you to speed cargo to the hinterland, consider using gateways with great rail connections to inland ports.

Not every intermodal terminal qualifies as an inland port. Inland ports, experts say, contain three common attributes: scale, rail, and proximity to population centers. Veteran inland-port locations include Dallas/Fort Worth, Chicago, Kansas City, St. Louis, and California’s Inland Empire. Some of these are located 1,000 or more miles from a seaport while others, such as Front Royal, Virginia, 220 miles from the port of Norfolk, were set up as container transfer points to relieve congestion at the seaports and to serve the Washington and Baltimore consumer markets.

South Carolina is not the only port authority to invest in inland ports. Georgia just recently broke ground on an inland port with rail connections to Savannah. Investments in distribution facilities in Lehigh Valley, Pennsylvania, qualify it as an inland port to serve the New York and Philadelphia regions. If it appears that much of this development is in the east, that’s because the expanded Panama Canal has made it easier to import Asian goods through east-coast ports over the last couple of years, leading to increased volumes there.

“Building intermodal infrastructure in our state goes hand-in-hand with the significant investment we are making to our port facilities in Charleston,” noted SCPA president and CEO Jim Newsome.

“Inland Port Greer is one of SCPA’s most successful investments,” Newsome added, “as the growth of intermodal container volume movement in our state and region requires appropriate facilities in the interior to ground loaded and empty containers and to leverage the efficiency and sustainability of rail transportation.”

Inland Port Dillon, 160 miles inland from Charleston, near the North Carolina border, was chosen for is location within the Carolinas I-95 Mega Site and its centrality to a significant base of existing port users. The facility offers overnight access to and from Charleston via an existing CSX main line.

In August, Georgia’s Governor Nathan Deal cut the ribbon opening the Appalachian Regional Port near Chatsworth, Georgia. The inland terminal will be operated by the Georgia Ports Authority and served by CSX. The new rail terminal will have the capacity to handle 100,000 container lifts per year.

“The ARP is part of our initiative that brings services from the coast to communities around the state,” said GPA Executive Director Griff Lynch.

A $92 million investment approved by the Georgia Ports Authority in September will double the Port of Savannah’s annual rail capacity to one-million containers and deliver the largest on-terminal rail facility in North America by 2020.

“It is no accident the GPA is constructing rail capacity,” said GPA Board Chairman Jimmy Allgood. “As part of our strategic planning, our team identified the growing role intermodal cargo would play in GPA’s long-term success.” The added rail capacity will better accommodate longer unit trains, which will provide more frequent service and extend the territory served by Savannah to cities like St. Louis, Chicago, and Cincinnati.

The Port of Virginia reported recently that its inland operations are growing, with volumes at Virginia Inland Port (VIP) and Richmond Marine Terminal (RMT) up 24 percent and 83 percent over the summer. The Virginia Inland Port, an intermodal container transfer facility owned by the Virginia Port Authority, occupies 161 acres 60 miles west of Washington, D.C. The terminal brings the Port of Virginia 220 miles closer to inland markets and enhances its service to the Washington and Baltimore metropolitan areas.

Meanwhile, Pennsylvania’s Lehigh Valley is becoming a hub for ecommerce logistics on the east coast. FedEx Ground constructed its largest facility in the country there in 2016, an 800,000-square-foot building, tot distribute online sales purchases across the northeast. The Lehigh Valley, once a manufacturing Mecca but no longer, has added 56 million square feet of warehousing space in the last few years, more than any comparable region in the country. Online shopping demand has motivated developers to replicate the Inland Empire on the east coast, with Lehigh Valley sites drawing imported goods through the Port of New York and New Jersey.

The increased speed of ecommerce deliveries has redrawn the map for distribution space in Pennsylvania. Previously, central Pennsylvania towns such as Harrisburg and York attracted large distribution centers because of their access to several metropolitan areas and the abundance of cheap land. But more recent developments made the Lehigh Valley more attractive because it is much closer to New York City. The Interstate-78/Interstate-81 corridor of eastern and central Pennsylvania has been the fastest growing industrial market in the country over the last six years, exceeding the growth rates of other leading markets such as Houston, Columbus, and the Inland Empire. Walmart, Dollar General, Uline, Ocean Spray, and PetSmart are among the tenants of new distribution space in the Lehigh Valley. Samsung Electronics and Isuzu Motors have also signed large warehouse leases.

Continuing gains in inbound container volume at US ports, according to Colliers, is the most important driver for warehouse demand connected to seaports. “These factors,” Colliers concluded, “are expected to…expand demand in secondary markets near inland ports and large population centers.”