EVALUATION OF POTENTIAL TRANSLOAD FACILITY LOCATIONS IN THE UPPER PENINSULA (UP) OF MICHIGAN

Shippers want to improve their transportation efficiency and rail transportation has the potential to provide an economical alternative to trucking, but it also has potential drawbacks. The pressure to optimize transportation supply chain logistics has resulted in growing interest in multimodal alternatives, such as a combination of truck and rail transportation, but the comparison of multimodal and modal alternatives can be complicated. Shippers in Michigan’s Upper Peninsula (UP) face similar challenges. Adding to the challenge is the distance from major markets and the absence of available facilities for transloading activities. This study reviewed three potential locations for a transload facility (Nestoria, Ishpeming, and Amasa) where truck shipments could be transferred to rail and vice versa. These locations were evaluated on the basis of transportation costs for shippers when compared to the use of single mode transportation by truck to Wisconsin, Chicago, Minneapolis, and Sault Ste. Marie. In addition to shipping costs, the study also evaluated the potential impact of future carbon emission penalties on the shipping cost and the effects of changing fuel prices on shipping cost. The study used data obtained from TRANSEARCH database (2009) and found that although there were slight differences between percent savings for the three locations, any of them could provide potential benefits for movements to Chicago and Minneapolis, as long as final destination could be accessed by rail for delivery. Short haul movements of less than 200 miles (Wisconsin and Sault Ste. Marie) were not cost effective for multimodal transport. The study also found that for every dollar increase in fuel price, cost savings from multimodal option increased by three to five percent, but the inclusion of emission costs would only add one to two percent additional savings. Under a specific case study that addressed shipments by Northern Hardwoods, the most distant locations in Wisconsin would also provide cost savings, partially due to the possibility of using Michigan trucks with higher carrying capacity for the initial movement from the facility to transload location. In addition, Minneapolis movements were found to provide savings for Northern Hardwoods, even without final rail access.