As a growing share of the consumption of vast markets such as BostWash is being supplied by international sources new systems of inland freight distribution are being established. Many ports see growth opportunities and potential to capture added value activities, particularly at inland freight distribution clusters. Such expectations are however clashing with acute congestion since there is limited potential to increase the capacity of existing road systems along the BostWash corridor.
There is thus competition between ports over the hinterland they service, but this competition takes increasingly the shape of the reliability of these services. To do so, modal shift and freight diversion strategies are contemplated. Modal shift implies that freight entering or exiting the port terminals would use a mode other than road, particularly rail. Freight diversion, which goes concomitantly with modal shift, involves the setting of inland terminals where freight converges. There is thus a hinterland access strategy in the making along the BostWash corridor. Unlike Europe, the North American East Coast does not offer significant axis of fluvial circulation (the St. Lawrence Seaway is limited). In the early 2000s, the Port Authority of New York and New Jersey developed an ambitious plan to siphon off some traffic through a web of inland hubs connected to the mother port by barge and rail. The Port Inland Distribution Network (PIDN) plan would free up valuable terminal space, ease mounting congestion and provide environmental benefits. It would also provide reliable, scheduled service for containers no longer subject to the saturated highway system and the potential disruptions that congestion may create.
Making this strategy operational is however another matter. The PIDN planned to service a set of freight clusters within a 50-mile radius of a number of potential feeder locations which are either barge or rail terminals. For instance, in 1991 the port of New York / New Jersey inaugurated a direct on-dock rail facilities, a function which grew at a phenomenal rate (much faster than the port traffic growth) from 43,000 containers handled in 1992 to more than 377,000 in 2011. It was expected that by 2010, intermodal rail share would climb to 25-30% of transshipped containers, but as of 2008 this share was at 12.3% underlining that modal shift expectations are yet to be realized. The setting of barge services is also an initiative not without challenges. For instance, the New York / Albany barge service, which started in April 2003, was suspended in February 2006 due to the lack of funding, which corresponded to the end of subsidies provided to help jump start the service. Inland barge distribution remains a problematic endeavor for the Eastern Seaboard. Still, PIDN has helped improving accessibility to the hinterland in the vicinity of Boston with a rail shuttle service to Worcester about 4 times per week and barge services to Boston.
The port of Hampton Roads (Virginia Port Authority) has also initiated an inland freight service to a terminal named the Virginia Inland Port, located about 80 miles west of Washington. It can be serviced by an 18 hours train journey between the port and the inland terminal. This terminal is conveniently located along the double stack rail corridor that leads to Chicago. The two most important container ports of the BostWash corridor are thus competing at their respective margins through modal shift and freight diversion. Port regionalization – the setting of inland terminals linked to port terminals by rail or barge services – thus appears to be used as a tool of port competition.
In an effort to capitalize on the growing traffic by offering a new corridor available to double stack rail train, Norfolk Southern completed in 2010 a major rail project reducing the distance of container train trips between the middle East Coast and the Midwest. The Heartland Corridor connect the port terminal facilities of Hampton Roads, Virginia, with rail lines through West Virginia and end in Columbus, Ohio. At this point the corridor links up with western rail networks or with the double-stack rail corridor to Chicago. Prior to its opening, double-stack trains heading towards the Port of Virginal went through Harrisburg, Pennsylvania because of insufficient tunnel clearance. Through an increase of the clearance of 28 tunnels at a cost of about $266 million, the Heartland Corridor project bypass this loop, cutting 233 miles and 36 hours off the route from Virginia to the Midwest. This setting is thus likely to increase hinterland competition at the margin of the BostWash corridor and offer a new alternative to long distance transcontinental freight distribution.