By Michael Hissam
Within the next few weeks, logistics in the greater Paso del Norte region undergoes a major change.
Union Pacific Railroad plans to hold the grand opening of its mammoth facility just north of Santa Teresa, New Mexico on May 28. Completion of the $400 million project also marks an early arrival for the railroad whose timetables had the big job targeted for a wrap up next year.
“This will be the culmination of a project that we broke ground for in June 2011,” said Aaron Hunt, regional communication director. “We expected to finish the facility in 2015 but we are finishing the facility early, we’re excited to be doing so.”
Although the 2,200-acre site stretching for nearly 12 miles remains a construction site until the big event, Hunt explained several functionalities have become operational. “We’ve already begun some locomotive fueling at the facility. As we get parts of the facility on line we will start using them right away. Our crew change folks have already been using that as a crew change facility.
“We do have quite a bit of work left to do before May and we’re finishing that up and we’re excited about it.”
How did Union Pacific beat the deadline?
Hunt explained, “As we tackled the project and got in there, first we went through a grading process, leveled everything out and then started working on service roads to finalize those. From there we started building the actual infrastructure at the site that will be used over the long term: crew change buildings, an operational command center that will drive the logistics of the facility itself. Now we are working to complete the intermodal ramp and the fueling facilities.
“As all that came together we found we were able to get a more aggressive construction timeline moving there on that 2,200 acre site and we’re just really excited that we’re going to be able to completely wrap it up in May.”
Union Pacific stands by earlier estimates that the overall economic impact to the State of New Mexico should be nearly $500 million.
Hunt added that activity at the site should result in nearly 250,000 intermodal containers being on- or off-loaded through the intermodal facility annually. “We plan to have the intermodal ramp fully functional and with this facility you’re looking at an annual lift capacity of 250,000 lifts. That’s how we gauge the size of an intermodal facility, by the number of intermodal containers that we process through the facility in one year. We have a very healthy and very robust intermodal network at Union Pacific in the 23 states where we operate, but a facility that can handle 250,000 lifts -- that’s one of the larger intermodal facilities in our network.”
With the intermodal completion, for example, shipping containers from Asia would arrive in California where they would be loaded onto Union Pacific trains east bound for Santa Teresa. From the new yards, the containers would be trucked to the final location to serve regional customers, especially the small and mid-sized forms. This capability also allows less costly shipping from the local firms which could send containers by truck to the Santa Teresa yards.
Hunt added that intermodal activity comes under two categories, international and domestic. The international represents primarily the Asia-to-America shipments coming in from the west coast ports and transferred to rail – as so often seen in the El Paso regional activity. The domestic activity centers on “truck conversions” where products that could move on truck instead move on rail due to customer specification. Domestic intermodal activity has been growing.
Regarding jobs, Union Pacific officials had been stating that the Santa Teresa rail site would be home to nearly 600 permanent jobs. Total employment associated with the project had been estimated at nearly 3,000.
Changing the panorama at Santa Teresa with the new facilities may also lead to greater economic activity in the desert.
For example, a Union Pacific built intermodal facility south of Dallas less than a decade ago in an undeveloped area. Now the adjoining properties host distribution centers with logistics companies, according to the railroad.
More recently, opening of an intermodal facility just south of Chicago sparked the announcement by Home Depot for its largest distribution center in Will County, Illinois. Union Pacific executives noted in an earlier Juarez-El Paso Now interview that Home Depot had been waiting to make sure there would be a rail facility to serve them. Beginning with groundbreaking, Union Pacific executives continually predicted that adjoining development near Santa Teresa would be associated with business from Mexico.
With development of areas near the intermodal locations comes opportunity for short-line railroads. Hunt said Union Pacific has a very collaborative relationship with dozens of short lines around our network. “Short lines are an important part of our overall customer offering and there are things that we can do only with the short lines. This facility really could act as a magnet for a number of different future opportunities and we’re definitely going to be talking to the short lines about what is possible there.”
Within the past two years, one short-line, Santa Teresa Southern Railroad, opened to serve the nearby industrial park.
Santa Teresa’s rail operation is only a few miles from the Santa Teresa/San Jeronimo border crossing that serves traffic associated with Chihuahua City and points south in addition to offering an additional link to the west from Ciudad Juarez and its industry.
Hunt acknowledged the possibility of a line to run from the Santa Teresa site into a line that would be built from Mexico. “We’re part of an ongoing conversation about the potential for additional border crossings, nothing is imminent. Our Santa Teresa facility was designed for our east-west traffic and it was designed to benefit our current customers. But if it acts as a catalyst for future growth, then that is something we’re excited about.”
The railroad has six connections that go in and out of Mexico in six different places: Calexico, California; Nogales, Arizona; El Paso, Eagle Pass, Laredo and Brownsville, Texas. Figures for Mexico-related business show a nearly equal distribution of north-bound and southbound traffic, he confirmed.
As far as El Paso’s rail yards, the Santa Teresa complex will change the way rail business takes place in the region but does not spell the end of activities near downtown El Paso. Hunt reaffirmed that the El Paso site will become more localized and would continue to serve local customers. “Santa Teresa was the answer to an ongoing challenge of not being able to expand our facility in El Paso. In an effort to create better fluidity along our ‘Sunset Corridor’ which is the 760-mile rail corridor which runs from Los Angeles to El Paso, in order to create better efficiencies along that route we needed to expand what we do in El Paso. Because of the land-locked nature of the yard there we ultimately saw Santa Teresa as an opportunity. We will continue operations in El Paso.”
Hunt pointed out that the Santa Teresa facility is “emblematic” of a very aggressive investment focus that Union Pacific has been making over the last 10 years. “We’ve invested more than 42 billion dollars in our network since 2000 and this facility which represents a $400 million investment by Union Pacific is a signature piece of that investment plan. It’s something that is driven by our desire to provide our customers with value that they can only get through a freight railroad.”
Hunt went on to say, “We move a ton of freight over 480 miles on a single gallon of fuel and that kind of efficiency is unsurpassed through any other mode of transportation. That’s something that really speaks to the health of the railroads currently, the health of Union Pacific, the leadership that we’ve had at our company and our focus on the future, the ability to continue to offer our customers great service and maybe even create some new opportunities for customers as we move forward.”