Rail agreement aims to boost service, economic development at Mount Vernon port
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The Ports of Indiana has inked a new agreement with Denver-based OmniTrax to serve as the new rail operator and development partner at the Ports of Indiana-Mount Vernon.
The port authority said the long-term agreement will support growth of the port’s existing customers and attract new business.
The 1,200-acre port along the Ohio River is the state’s largest port, and Ports of Indiana CEO Jody Peacock said there are nearly 700 acres of land available for future development.
Peacock told Inside INdiana Business that OmniTrax stood out from the 19 respondents to a request for proposals because of its background in development.
“They are a part of The Broe Group, which is a very large-scale economic development industrial development firm that has billion dollar operations in 41 states and provinces around North America,” Peacock said. “And so we really thought they would make great partner for this project at Mount Vernon. It offers us the opportunity to offer our customers top notch rail service and also grow business at the port with our existing customers and bring in new customers to the Mount Vernon region.”
OmniTrax operates 27 railroads serving ports and industrial parks across the country. Peacock said the company will bring its reputation as a world-class rail service provider to Indiana.
“They’re going to bring in efficiencies that we haven’t had before. They’re going to bring in resources,” he said. “They’re a very fast growing, large rail company, and so providing efficient operations and blocking rail cars, providing connections with their other their customers around the country offers new customer connections for us.”
The Ports of Indiana-Mount Vernon handles approximately 6.7 million tons of cargo and 40,000 rail cars annually, the port authority said, with 12 companies on-site providing services for cargo handling, warehousing, barge fleeing, and Foreign-Trade Zones.
“There is tremendous potential for rail-related development in this area because of the port’s strategic location and excellent infrastructure,” OmniTrax CEO Dean Piacente said in written remarks. “Our OmniTrax Industrial Development Team is eager to partner with local, regional and state economic development officials and leverage our Rail-Ready Sites program to connect businesses with rail-served sites and drive further economic development in southern Indiana.”
Peacock said it is essential for multimodal hubs like the ports to have a strong rail partner.
“Rail is very efficient mode of transportation allows us to put a lot of cargo and move on rail cars and then move it across the country much more efficiently and inexpensively than truck in a lot of cases,” he said. “It’s important for us to have strong service providers for our customers because at the end of the day, a company can go out and develop its own facility anywhere in a cornfield or in a vacant lot. But if they don’t have strong rail service and strong rail connections, they’re going to be at a disadvantage.”
The 688 acres of available land at the port includes a 544-acre megasite. Peacock said they optimistic that any future development will resemble past development, which focuses a lot on markets such as steel, agriculture, and construction.
“I think we’d be very happy with more of the same types of businesses, but at the same time, we’re starting to look to branch out a little bit more in what we do, especially in the container market,” he said. “We see containers as maybe the next frontier for Ports of Indiana. Containers are the fastest-growing, highest-value cargoes in the world when it comes to the port shipments.”
The Ports of Indiana recently launched The Indiana Container Initiative, which aims to support the development of multiple international container terminals throughout the state.
The Mount Vernon port is currently investing $5 million in rail improvements and has submitted a federal grant application for a $16 million project that involves the construction of a new railyard and transload facility, which could have a container component, Peacock said.
Now that the agreement with OmniTrax has been signed, Peacock said it will take about 30 days for the company to get up and running at the port. Peacock noted that the job impact created by the agreement is small, the goal is to grow business at the port, which could have longer-term impact.
“I think what we’ll see over time is there will be job creation at our existing customers as they’re able to reach broader markets and improve their transportation connections,” he said. “But then the biggest impact will come as we attract new businesses through this new partnership with OmniTrax, and that could create hundreds of jobs in the future.”