Richmond Upgrades Rail Infrastructure to Serve Honda

The Port of Richmond California has kicked off the construction phase of $40-million in new port and rail infrastructure work at the historic Point Potrero Marine Terminal. The turnkey project will greatly enhance the port’s rail operations, allow American Honda Motor Co. to import vehicles for local dealers, and create a hub for outbound rail shipments.

In 2009, Honda finalized an agreement with Auto Warehousing Co. (AWC) and the Port of Richmond to import more than 150,000 vehicles annually from foreign assembly plants to the San Francisco Bay Area.

For three years, TransDevelopment has worked closely with AWC, the Port of Richmond, American Honda, and the BNSF Railway to bring the project to reality.

TransDevelopment has handled project planning, environmental permitting, project design and is now the construction manager for port developer and leaseholder AWC. Following a formal groundbreaking event in October 2009, construction has been fast-tracked for the arrival of the first Honda vehicles in April 2010.

Honda’s desire to enhance the efficiency of its imported vehicle distribution was the driver for AWC and the Port of Richmond to redevelop and expand the 1940s-era rail infrastructure at Point Potrero.

“Honda made a strategic decision to distribute vehicles in California and the Western U.S. via the Richmond gateway,” says Bill Robbins, the TransDevelopment principal who has been heading up the Port of Richmond project. TransDevelopment professionals from the company’s offices in Portland and Atlanta have joined forces to plan and execute the project.

“The Port of Richmond offered Honda a great anchor position to handle both imported and domestically produced vehicles,” says Robbins. “You have to admire Honda’s long-range vision to make this strategic move.”

A second California gateway

Honda currently imports vehicles through the Port of San Diego and trucks 35,000 – 40,000 vehicles annually more than 450 miles to the Bay Area and other Northern California dealerships. By using the Port of Richmond as a new distribution center, the leading auto manufacturer will enhance service to local dealers, reduce trucking impacts, and establish a new rail gateway to southwestern U.S. markets.

Honda vehicles imported in San Diego for outbound rail shipment have been impacted by narrowing daily timeframes for industrial rail shipments due to shared freight-passenger rail corridors throughout San Diego and Los Angeles. After transiting the Los Angeles Basin, trains make their way to railyards in San Bernardino before reaching Barstow, the junction of BNSF’s San Francisco and Los Angeles mainlines.

When imports shift to Richmond, vehicles will be loaded on dedicated unit trains at the port and transit an efficient corridor that passes through Stockton and the San Joaquin Valley and south to Barstow. The new routing will balance freight between Northern and Southern California rail corridors, and create railcar equipment efficiencies.

Boost for Richmond

Winning the Honda account will provide a big boost for the City and Port of Richmond. The port expects to handle 150,000 – 180,000 Honda vehicles per year once the business ramps up, including the 35,000 vehicles for local dealership distribution.

Revenue to the Port of Richmond from the Honda business will be about $70 million over the 15-year contract.

The proposed development and operating activities are expected to add more than 100 construction jobs and another 200 long-term jobs to support additional logistics activity related to the expanded facility and automotive operations. Auto Warehousing and TransDevelopment are working under a Richmond First Source Agreement, which provides for both incentives and specific employment targets to use qualified contractors, subcontractors, and workers from the City of Richmond.

Rail and safety benefits

The Port of Richmond expansion project will improve rail operations, reduce congestion at rail and public street intersections, and enhance public and industrial safety.

In the past, vehicles imported at the marine terminal for outbound shipment by rail were “street-shuttled” one mile over Canal Boulevard to the BNSF’s automotive terminal. With the new rail infrastructure at the port, all of Honda’s rail loading and shipping activities will be consolidated within the Point Potrero terminal, significantly reducing vehicular movements along Canal Boulevard.

The port improvements will consist of a modern seven-track, 84-railcar spot loading and unloading facility, where Honda vehicles will be received and shipped outbound to the Southwest.

The BNSF automotive facility at the intersection of Canal and Cutting Boulevards will also be improved with a new six-track railyard to support the switching operations at the port. These tracks will increase the efficiency of Honda switching operations by minimizing repetitive train operations over the Canal Boulevard and Cutting Street grade crossings.

Neighboring industries along Canal Boulevard will benefit from the expansion project with reduced vehicular traffic along Canal Boulevard and new rail and driveway infrastructure to each of their facilities. National Gypsum, Kinder Morgan, Conoco Phillips, and BP will share a new industrial lead track – separate from the port’s automotive lead – with new track switches and an overall upgrade of the rail infrastructure leading into their facilities. Several petroleum companies are timing significant improvements to their supply pipelines to coincide with the railroad and street construction project.

A second deep-water ship berth at Point Potrero will be renovated to allow up to two car carrier ships to be berthed and unloaded at the same time.

“With the new rail and terminal design, we have been able to create a development footprint that will shift the rail loading ramp adjacent to the ship offloading, and create a completely new rail capacity at the port,” says Robbins. “The design will meet Honda’s needs to move vehicles inbound and out-bound and streamline rail service for the port’s other industrial customers.”

The BNSF will see added efficiencies once the new rail infrastructure is built. The railroad now moves domestically produced vehicles – including Hondas – to its automotive terminal adjacent to the port, where they are unloaded and shipped via truck to dealers. With the new port rail infrastructure, inbound rail cars will be unloaded and immediately reloaded with outbound Hondas destined for Texas and other western states.

“The balancing of the inbound and outbound equipment creates efficiencies for Honda and for the railroad,” says Marc Allen, BNSF’s assistant vice president of Automotive Marketing. “Any time you can add capacity without creating negative impacts, it is beneficial for everyone.”

A challenging project

From the beginning, the rail expansion project has been extremely complex. Development within the marine environment in the San Francisco Bay Area is highly regulated and the development plan had to meet the City of Richmond’s innovative “green” development standards. Extensive mitigation measures are now in place to offset added air emissions related to increases in ship calls and rail volumes.

“We’ve encountered a lot of new issues working on this project,” says Dennis Mateo, chief financial officer of Auto Warehousing Company. “Developing industrial projects in the state of California – and on the waterfront – is challenging. On top of that, there are many stakeholders in and around the port.”

Adds Robbins: “Without a doubt this rail expansion project has been one of the more challenging automotive development projects for our company, after 20 years and nearly 100 completed projects.”

Coordinating role

Key stakeholders in the automotive rail project credit TransDevelopment with facilitating the infrastructure upgrade.

“TransDevelopment’s ability to form working partnerships with everyone involved with this project – Honda, the BNSF, the port, Auto Warehousing, and the community – was the key to making this development happen,” says Jim Matzorkis, executive director of the Port of Richmond.

BNSF’s Allen agrees with Matzorkis. “TransDevelopment’s expertise made the project happen,” he says.

“TransDevelopment is the industry-leading expert in automotive facility design and construction in North America.”

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