Ports CEO: Containers represent a new frontier for cargo
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The CEO of the Ports of Indiana says the recently launched Indiana Container Initiative aims to fill what he calls a critical gap in the state’s logistics sector.
The initiative seeks to explore the development of multiple international container terminals throughout the state, including at Indiana’s three ports and at various inland locations.
The Ports of Indiana, along with the Indiana Soybean Alliance and the Indiana Corn Marketing Council, hosted the inaugural Indiana Container Shipping Conference this week, which was attended by Gov. Eric Holcomb and leaders from Indiana’s business, agriculture and transportation sectors.
Jody Peacock told Inside INdiana Business that when it comes to containers, Indiana has missed the boat both literally and figuratively.
“We have a great [container] hub in downtown Indianapolis with the Indiana Rail Road,” Peacock said. “But for the most part, the larger container hubs in the Midwest require Indiana businesses to go out of state; so they have to drive to Chicago or Columbus or other points in the Midwest. That adds shipping costs to anybody who’s shipping and receiving goods via containers.”
Peacock said from a port perspective, containers mean growth. The state’s ports at Burns Harbor along Lake Michigan and at Mount Vernon and Jeffersonville along the Ohio River are not handling containers, which he called “a shame.”
Establishing international container terminals is not an easy task, he said. It requires significant investment and regulatory approvals to make it happen.
“That’s part of why we’re launching the Indiana Container Initiative is that we really have to have our ducks in a row,” he said. “To be able to do this, we need everybody on the same page. We need to understand the market challenges, the investment requirements that are going into this, the federal regulations that are going to be involved for us to get approval to move forward.”
Those efforts were also the catalyst for the Indiana Container Shipping Conference. Officials wanted to gather leaders together to discuss ways to develop new container ports, which could help grow agriculture exports and expand global trade.
Courtney Kingery, CEO of the Indiana Soybean Alliance, Indiana Corn Marketing Council and Indiana Corn Growers Association, told IIB that having container infrastructure in place would bring big benefits to Indiana’s agriculture sector.
“The value of corn and soybean exports out of Indiana is about $4 billion, but shipping containerized exports out of Indiana is really just in its infancy,” Kingery said, noting that there are currently only about 7,000 containers going out of the state with agricultural products.
“What we’ve seen is that it could grow to closer to 20,000 containers going out of the state in addition to what we already have. So there’s a tremendous opportunity for growth of those containers shipments of agricultural products out of the state.”
Kingery said adding container infrastructure could bring additional opportunities for farmers to bring in more revenue for their products. Peacock said farmers would also have the chance to reach customers in countries that they previously couldn’t reach.
“If they can have access to a container facility close to the farm, they can fill a container with Indiana soybeans that have premium properties that are attractive to world markets,” he said. “And they can sell that container of soybeans to a country that just can’t take a full ship load, but they can take 20 containers or 50 containers. And that can be a big deal for for an Indiana farm community.”
Peacock said it also means the state’s global trade efforts can grow, supply chain costs can be reduced, and more businesses could possibly locate in Indiana.
Kingery said for the effort to be successful, it will require massive collaboration across the entire supply chain in Indiana.
“The railroads, the loaders, the farmers, the freight forwarders, everyone across that supply chain to get the agricultural products from the field, onto a container, onto some sort of transportation…all of those pieces have to come together,” she said.
The potential investment in container terminals would depend on the size that is needed at each location, Peacock said, noting that an estimate is not yet known. He said developing the sites would be a long process.
“What we’re seeing now is the idea that we’re prepared and we’re committed to do this,” he said. “If we’re trying to spell out what are the next steps right away, it starts with regulatory approval. So we need to really commit to getting regulatory approval to do this if we’re going to do an international container terminal.”
He said officials also need to start identifying potential customers and partners to make the effort happen, which started with the conference. Additionally, they need to develop a funding strategy.
“The nice thing about our ports is the infrastructure is in place. We have the rail connections. We have the waterway connections, but we’re going to need to build out the equipment, the operators, the individual container facilities that are needed to handle the boxes as they move through our facilities.”
Peacock noted that the big thing he observed at the conference was the support that exists across industry sectors and the government for the effort to bring container terminals to Indiana.
“I commend Indiana’s statewide agricultural sector and port leaders for convening this important discussion about growing Indiana’s global trade by expanding our international container shipping opportunities,” Gov. Holcomb said in written remarks. “Leveraging all our port, rail and transportation resources to expand our container shipping connections will strengthen our economy and create even more opportunities for Hoosier farmers, businesses and families.”