Rail to road station to open by year's end.

The City of Sault Ste. Marie is forging ahead with its plan to establish itself as a containerized freight transfer hub, despite Canadian National Railway (CN) throwing cold water on the concept. The municipality has kicked off an aggressive lobbying campaign to persuade international manufacturers, shippers and politicians frustrated by lengthy wait times at congested southern Ontario border crossings, to consider the Sault as an alternative gateway to the American Midwest.

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With an unnamed local entrepreneur on board, the Sault economic development corporation's director of industrial marketing expresses confidence a multi-modal (rail-to-truck) facility will be operating in the city by year's end.

"We need to keep the momentum going," says John Febbraro. "It's created a lot of interest in the transportation networks."

They are scouting possible sites around town to locate a transfer facility utilizing rail links and possibly making use of a new transport truck corridor being built in the city to connect the International Bridge to Michigan with the Trans-Canada Highway.

Ford Motor Company in Detroit is the only company to have publicly come out in support of the Sault's multi-modal concept. But there are a number of other shippers and manufacturers waiting in the wings, according to Febbraro.

"They're bringing product in from China and overseas ... and they see it getting to them quicker via Sault Ste. Marie."

The city contends containerized cargo arriving on the west coast, diverted by rail through the Sault and transferred onto truck, can get to the U.S. Midwest a day sooner than via existing supply chain routes in southern Ontario.

Led by Mayor John Rowswell, the city is spending $50,000 to lobby federal and provincial cabinet ministers on the proposal, while also contacting various international shippers and logistics companies.

Another $50,000 is earmarked for a cost-benefit analysis, development of a business case and an investment strategy.

The city has also launched a Web site (www.multimodalssm.com) to promote the concept.

"We are going to target companies like Ford and all sectors, whether its automotive, retail, steel or wood ... in trying to make the transportation corridor more efficient for its end user," says Febbraro. "I'm not saying it is inefficient now (but) there's so much congestion in (the) Chicago (transfer yards) and southern Ontario, we feel the solution is in Sault Ste. Marie."

According to preliminary figures released from the city's logistics consultants, routing containers from Vancouver to Detroit via the Sault shaves 17 hours off the trip, which currently takes them through Toronto.

"For a company that needs just-in-time delivery, it's a huge cost benefit," says, Febbraro.

CN Rail, which operates the former Algoma Central Railway track running south off their main line at Oba to the Sault, would be an integral part of the concept.

But the railway isn't buying into it just yet.

CN spokesman Mark Hallman says the Sault doesn't generate sufficient two-way freight traffic to warrant diverting containers from already established routes through the Greater Toronto Area.

The carrier operates a container rail-to-truck transfer yard at Brampton, the busiest of its type in Canada. In 2002, the facility handled almost 1.3 million containers and truck trailers coming from both coasts, and more than 3,500 units per day. More recent numbers could be in the 1.4 or 1.5 million range.

"We don't see that there is sufficient volume to be able to justify taking a train from our main line, getting off at the ACR line in Northern Ontario and coming down at Oba to the Sault. It just isn't feasible."

CN is receptive to growing their existing "trans-load" type of operations, transferring more general cargoes of specialty wood products, logs, pulpwood and steel coils from rail to truck, or moving large pieces of equipment.

"But in terms of an intermodal facility for containers (a terminal), we don't see that as an economically feasible concept. Intermodal really works in the batch situation where there are large volumes of traffic moving in both directions from major large terminals.

"We have major intermodal terminals in places like Halifax, Montreal, Toronto, Winnipeg, Saskatoon, Calgary and Vancouver, and those are generally where you get more balanced traffic flows."

Securing backhaul cargo is key, he says.

Hallman says CN's intermodal products from Western Canada enter the U.S. Midwest through Chicago via Fort Frances-Rainy River "and there's no congestion there."

Other container traffic coming from Halifax enters the U.S. unimpeded through a CN tunnel under the St. Clair River at Sarnia.

While not willing to reveal specifics on discussions between the carrier and the city, Hallman says "CN has been pretty clear with the city that trans-load is an option and we're more than happy to work with them, including the mayor, but we don't see intermodal as feasible."

Febbraro admits the city has to do its homework and there are many hurdles to overcome to ensure the track can handle increased traffic. His team has to investigate backhaul solutions, determine costs associated with bringing in double-stacked containers and examine bridge impediments. "There's some convincing to be done, but I know as we get our end users from the front end continuing to discuss this with the rail companies, I think we will see this happen."

The multi-modal concept is part of the city's larger strategy to develop the Sault as an international transportation hub utilizing road, rail, marine and trans-polar air routes as a trade bridge to the American manufacturing heartland. While the federal and provincial governments have launched an environmental assessment study to consider building another Detroit River crossing by 2013, the Sault contends the International Bridge is underutilized with only 400-450 trucks crossing daily.

Canadian Pacific and CN will come on board once they have seen what the city plans to do, according to Febbraro.

He says the city is keeping its options open to any warehousing, redistribution and value-added packaging opportunities, and the concept could be expanded to include handling containers from both east and west coasts.

www.multimodalssm.com

By IAN ROSS

Northern Ontario Business