Rail users say savings being missed as imports pass through city

Wisconsin businesses could save more than $13 million a year in harbor maintenance taxes by routing Far Eastern imports through the Port of Vancouver and by rail to Milwaukee.
But to establish that direct container rail service, Wisconsin businesses would have to lobby the Canadian-Pacific Railway to prove there’s enough business to make a stop at the Port of Milwaukee worthwhile. So far, despite an effort to demonstrate that demand, the railroad hasn’t received much input from Wisconsin businesses.
The situation was a recent topic of discussion at a meeting of the Milwaukee World Trade Association (MWTA).
“The volume is there,” says Betty Palkowski of the Port of Milwaukee, noting a survey conducted on container imports from the Far East to Wisconsin.
From January through June of last year, 29,000 containers destined for Wisconsin cleared the five US ports on the West Coast. The value of merchandise in those containers was $525 million. Like all users of US ports, Wisconsin businesses paid a harbor maintenance tax of .0125%. That tax on the $525 million amounted to $6,562,500, or $625 on every $50,000 worth of merchandise.
Although there are three major railroads serving the Midwest from the West Coast, only the Canadian-Pacific Railway linked to Vancouver passes directly through the Port of Milwaukee. Five days a week it makes a run, with a final stop in Chicago.
Containers, counted in TEU’s or twenty-foot-equivalent-units, are off-loaded and transferred onto ship-line chassis incurring surcharges of $60 for imports and $40 for exports. The normal turn-around time in the Chicago yards is three to four days. Containers destined to customers in Wisconsin have to be trucked back north. Add drayage costs of $300 on a container from Chicago back to Milwaukee, more if it’s overweight and requires a tri-axle carrier.
With the congestion and extra costs incurred hauling freight out of Chicago, a number of Wisconsin manufacturers have pleaded with their customs brokers, “Get us out of Chicago!”
“If the Canadian-Pacific stopped in Milwaukee, we could bring containers in through Vancouver to Milwaukee, make the transfer that day and avoid both the harbor tax and the drayage expense for our customers,” explained Dave Larson at M.E. Dey & Co., one of Milwaukee’s major customs brokers. The cost-savings approaches $1,000 per container.
Drop-offs in Milwaukee would remedy other cost and logistic headaches, as well. For example, companies such as John Deere import heavy metal components, and the weight of their containers sometimes exceeds highway weight limits. To comply with weight restrictions, Ramon Mendoza at John Deere orders the firm’s containers reduced in weight before the container is transferred to a carrier in Chicago.
“We pay a re-positioning charge in Chicago to move the container where material can be transferred to other containers,” Mendoza explained. He’s aware that within the Port of Milwaukee there are two companies that could break down container weights without repositioning costs.
Pak Technologies in Milwaukee performs packaging services for other manufacturers on a variety of products that are imported and hauled back by truck from Chicago. “The trouble is getting our customers to act on the cost-savings involved,” said Del Liotta of Pak Technologies. “It’s difficult to get people to change shipping lines.”
Karen Tryblowski, the terminal manager for Canadian-Pacific in Bensonville, Ill., would welcome dropping off containers at the Port of Milwaukee. “It would relieve some of the congestion down here, if we could unload about 25 cars in Milwaukee every day.”
While not authorized to make the final decision, Tryblowski believes that railway management would consider stopping at the Port of Milwaukee if they could drop off 50 TEU’s a day.
Based on the Port of Milwaukee’s survey, showing roughly 60,000 containers a year from the Far East, 50 TEU’s a day amounts to 13,000 a year, or 22% of Wisconsin’s Asian imports.
To assist railway management in making their decision to drop containers in Milwaukee, James Dolan, international intermodal manager for C-P Railway, provided a survey letter for each attendee at the world trade seminar. In his letter he requested information on the number of containers imported and/or exported each year with an estimate of the number of containers that could be re-routed through the Port of Vancouver and dropped in Milwaukee. Freight costs would be equalized with Minneapolis and Chicago, another benefit.
To date, the response from Wisconsin businesses has been negligible, according to Canadian-Pacific’s Dennis Schmidt. Companies that could financially benefit from a direct railway connection between the Port of Vancouver and Milwaukee can contact Jim Dolan at C-P Railway, 1200 Jorie Blvd., 2nd Floor, Oak Brook, IL 60523. Phone 630-990-7142.
April 27, 2001 SBT