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Home / News & Reviews / News Wire / Union Pacific to streamline Chicago-area intermodal terminals, close Global 3 NEWSWIRE

Union Pacific to streamline Chicago-area intermodal terminals, close Global 3 NEWSWIRE

By Bill Stephens | May 2, 2019

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UPChicagointermodal
UPChicagointermodal
Union Pacific
OMAHA, Neb. – Union Pacific is simplifying its intermodal terminal network to improve service in Chicago, which will result in idling the Global 3 terminal in Rochelle, Ill., along with the Canal Street Container Depot.

UP currently operates six intermodal facilities in and around the Railroad Capital.

“Many of our ramps handle a mix of domestic and international business. Operating six facilities with a variety of equipment at each creates complexity for Union Pacific (equipment issues, additional switching), as well as our customers (complex drayage arrangements and vendor management), creating a greater likelihood of supply chain failure,” Kenny Rocker, UP’s executive vice president of marketing and sales, writes in a customer update on Thursday.

“Therefore, we will be idling the Global 3 (G3) Intermodal Ramp in early July, and the Canal Street Container Depot will follow shortly thereafter,” Rocker says. “We will also move international volume out of Global 2 (G2), allowing each facility to focus on a specific business segment: Global 4 (G4) will handle predominantly international intermodal shipments, G2 domestic intermodal shipments, and Yard Center auto parts and North/South shipments.”

UP will make investments to upgrade G2 and G4 terminals to support increased volumes and make room for growth, Rocker says.

The changes will benefit customers, Rocker says, by simplifying drayage, chassis management, and billing for intermodal users. The terminals also will be able to offer faster loading and unloading of containers.

UP billed the Global 3 terminal in Rochelle as a state-of-the-art facility when it opened in 2003 to serve serve as an interchange hub and terminal for intermodal shipments moving through western Iowa and Wisconsin.

“That is a big facility to idle,” says intermodal analyst Larry Gross, noting that Global 3 is capable of 720,000 lifts annually and has parking spaces for 7,200 containers or trailers.

Rochelle was not suitable for crosstown moves, given its location 85 miles from Chicago, Gross says. “Global 2 and 4 are better located by far than Rochelle, so dray costs will be reduced,” he says.

“Obviously they will have to absorb the volume at their other Chicago facilities, which may be a stretch,” Gross says. “Presumably by making each terminal single-purpose they think they can improve individual terminal capacity and absorb the overflow and perhaps they are right.”

But the move won’t be good news for shippers in Iowa and Wisconsin. “Economics for freight moving to Wisconsin, far western Chicago, and eastern Iowa will be impaired,” Gross says.

Last month UP Chief Operating Officer Jim Vena told analysts and investors on the railroad’s first quarter earnings call that a consolidation plan for Chicago intermodal terminals was in the works.

UP’s service advisory is available online.

RochelleGlobal3
A westbound UP freight passes the Global III intermodal facility west of Rochelle, Ill., in 2009.
Steve Schmollinger

9 thoughts on “Union Pacific to streamline Chicago-area intermodal terminals, close Global 3 NEWSWIRE

  1. I am not sure how “idling” Global 3 in Rochelle will impact operating costs at Global 2 & 4 as the main factor of facility 3 was reducing freight truck traffic on interstates that lead to Chicago. Does this mean I will be sitting in more truck traffic on local interstates as UP wants to reduce costs at the far west Chicago global hub?

  2. Of course Rochelle is a poor location for cross-town drayage. Rochelle was built and marketed as a location to block-swap IM traffic for steel-wheel interchange with eastern roads. But why try building your IM traffic base while it’s so much easier and cheaper to drive the business away.

    Going out-of-business, one yard a time. Just as PSR intends to.

  3. Jf Turcotte, prove to the world how the railroads are going out of business one yard at a time!!

    Transportation methods/needs are always changing. What may have worked some 20 years ago may not work with today’s environment. Trucking is vastly different today than when G3 was built opened in 2003. As the world of trucking has changed, the railroads have had to respond accordingly in order to provide transportation services in their own methods. The bigger picture of the transportation network of railroads, trucking and maritime all must be considered when nitpicking the small details.

    Regarding G3, it’s unfortunate that Dick Davidson did not foresee 50 plus years in the future when UP drew up the plans for G3, but hindsight is different than foresight. For now, at least the ones that are being kept in the Chicago area will be expanded to accommodate the influx of business. I remember when I visited with Jim Young in August 2011 at Santa Teresa, there were plans already in consideration for consolidating the Chicago intermodal yards back then. Time will tell whether or not UP has played their hand long term wisely.

  4. JR Turcotte. The only reason G3 was built out at Rochelle was due to NIMBY outcry in West Chicago where the original location was plotted to build G3. Like I said before Proviso should have been converted entirely to ICTF with classification moved out to Rochelle. Rochelle could only be marketed as steel wheel interchange, since UP could not build it closer to Chicago..

  5. Also what about G1? No mention of it’s future? I guess since it’s not mentioned I’ll assume it’s safe for now. Glad to hear Yard Center is staying.

  6. And so the need for trackage rights over the Wabash from KC to Springfield is revealed. The West End and the old Alton from Springfield to Joliet is going to get busy.

  7. Well the first thing you guys better do is put in a decent access road to G2. That two lane, pothole filled access road that comes off a crowded and pothole filled, overcrowded two lane Lake St off of the I-290 ramp and runs along the hump lead is pathetic. Nevermind trying to get out of the place, especially during rush hour. A truck has to come out that same pothole filled road, then turn right onto Lake St when he can find a hole, go a block while trying to weasel across both lanes and then make a left turn onto Railroad Ave. Then go another half a block, turn left and head west on North Ave back to either 290 or 294.
    As for G3, many of us thought that yard was a “If we build it they will come” dream anyway. To me, it was basically a 176 million dollar block swapping yard. Every train I ever took in there coming east was pretty much setout traffic for either the NS or CSX. I know they did actually do some lifts there, but the thing never seemed to materialize into what they thought it would be. And the westbounds seem to be built from stuff that came out there from Chicago on shuttle moves, plus whatever was loaded out there.

  8. ‘Idle’ is an interesting choice of words. To me, it sounds like a different way of saying, ‘experiment’; we’re not sure if this is going work. If UP was permanently closing Global III, I suppose they would have just said, ‘closed’. What this comes down to is UP attempting to eliminate the costs associated with the transfers from Rochelle to the Chicago area yards. Will Global I & II be able to handle all of the additional traffic? A lot of the IM dropped at Rochelle was destined for either CSX or NS yards in Chicago for eastern connections. Or, will trains back-up on the Geneva Sub waiting to get into either Global I or II?

    A few notes and ideas…
    * Rochelle is exploring the possibility of having short line railroad – City of Rochelle Railroad – provide intermodal service.
    * Use some of the tracks / capacity at Global III for holding IM trains waiting to enter the Chicago area yards instead of parking the train on a main track when a yard is not able to accept the train.
    * Or, move / expand current auto unloading operations at West Chicago to Rochelle allowing the West Chicago yard to be used as a IM holding / staging yard for Global I, II & IV.
    * Railex was running dedicated trains of perishable fruits and vegetables from the west coast to New York and eyed Rochelle as a possible Midwest hub before they were bought out by UP and the service was rebranded as, ‘Cold Connect’. If UP is interested in a Midwest hub for their Cold Connect service, part Global III could be reconfigured for this service.

    Chris

  9. Sometimes the “If you build it, they will come” mantra only works in the movies…….

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