Transportation and Shipping Infrastructure Panel and Q&A: Tyndall Air Force Base Hurricane Michael Recovery–Industry Day

Tyndall Air Force Base Hurricane Michael Recovery Industry Day #3: Transportation/Shipping Infrastructure Panel Discussion
Port Authority representative
Bay Line Railroad representative

Industry Day is a collaborative effort where senior military and business leaders come together to discuss innovations and the future of Tyndall Air Force Base and the impact to the community. We realize there is no better way to rebuild Tyndall AFB without a partnership that includes both the local community and Industry. This is our third Industry Day in what we hope will be a series of exchanges to help identify innovative ways to move forward as we rebuild Tyndall together. On behalf of the Air Force we are pleased that you have taken time away from your busy schedules to assist us with the rebuild at one of the Air Force’s most important bases in its inventory.

Industry Day was held at Florida State University – Panama City’s Holley Academic Center, Panama City, Florida

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We’ll now begin our final briefings on transportation and shipping infrastructure. We’ve got Alex King from the Panama City Port Authority. Mr. King currently serves as the Deputy Director of Cargo Operations and Business Development for the Panama City Port Authority. Kirk Bedford from Bay County Rail Line. He’s the General Manager of the Bay Line Railroad, AN Railway, Chattahoochee Industrial Railroad, and the Hilton and Albany Railroad and he’s headquartered in Panama City. Let’s welcome them. (audience applauding) Mr. King would you like to start?

Thank you, it’s an honor to be here this afternoon representing the Panama City Port Authority and speak at Industry Day. Wanted to give an overview of the Panama City Port Authority which is the governing entity of the Port of Panama City, Florida. We currently have two deep-water facilities here and an inland industrial park which includes an intermodal logistics center and a bulk load transfer facility. Our mission for the port is to expand regional economic opportunities by providing modern port facilities, promoting trade, and supporting industrial development. We’re doing this through the continued modernization and build out of the West Terminal, the development of our Louise Terminal, and the IDC. We’re doing this to provide a Gulf Coast gateway to all of our customers and import and export shippers that are utilizing the port through this region. As you can see on the Bay County network map, are three facilities, with the blue dots. Our Intermodal Distribution Center is on US Highway 231 coming into Panama City. That is the main heavy haul truck corridor in and out of Panama City. Highway 231 connects to I-10, which is a major east-west interstate and then connects further in Alabama in Montgomery, offering access to I-65 and I-85. Also it connects to 431 in Dothan for direct connection to I-185, which services Atlanta and into Georgia. Our West Terminal, which is formerly known as the Dyers Point Terminal, is located right across Highway 98 here in Panama City. It’s a 120-acre facility and for many decades it’s been our primary Port Authority facility. It was a shipyard in World War II, the Wainwright Shipyard. It built 108 Liberty ships and four Liberty tankers and at one time there were 20,000 civilians that were employed in the shipyard during the war to support the war efforts. And where Gulf Coast State College is and FSU campus, a lot of housing for those people were there. So just a little history there. And then ironically, a lot of those ships came home, you would say, after the war and were dismantled here off the port by a company called Cove Contractors. So just to kind of give you the history of how the Port Authority came to be was that land was repurposed after the war from Wainwright Shipyard to the Port Authority. The main corridor for truck movement from the West Terminal to Tyndall is on Highway 98, which is our east-west thoroughfare through town. And also it connects to 231 North and the Bay Line Railroad. We do have at the West Terminal we do have direct, we have on port rail via the Bay Line and then we have six deep-water berths which we can service ocean-going ships and barges. The East Terminal, which is located about 7 miles east of here is the current site of the West Rock Paper Mill. There’s a large paper mill facility here and for many decades that was a private deep-water port that was owned by the mill. And the Port Authority recently acquired that land and is developing a brand new deep-water port terminal, and I’ll go into that more later. And then you can see where Tyndall is in relation to our facilities. So it’s a very easy highway access from our IDC facility up 231 to Tyndall, via US 231 and Highway 98 and both of our terminals. Again, the West Terminal here, you can see the aerial. The top right of the screen is where the Holly Center will be where we’re sitting today. And then, as you can see, it’s a very modern, built out facility. We have a wide range of cargo activity at the port. We handle containers, we handle break bulk cargo, we handle bulk cargo, which include aggregates and biomass wood pellets. We also handle a lot of project cargo. We’re also unique in a Port Authority is that we have two large industrial tenants on the court. We have Burgh Steel Pipe, which manufacturers heavy wall gas and oil pipe. And then Oceanneering, which manufacturers under C Umbilical. What’s unique here in addition to is that we supporting the industries on the port, we’re creating at this facility, we’re creating over 1000 direct jobs that rely on the port and over 7,000 supporting and indirect jobs. And our economic impact to the region is $1.4 billion annually. Backwards. As mentioned before, the Bay Line Railway, which Kirk Bedford will expand further in his presentation, services us daily at the Port of Panama City and we have a direct connection to both East and Class I railroads, via CSX and the Northern Southern, which they hold a wide array of cargoes coming in, including building materials for the region and aggregates, cement, a lot of different cargoes that he’ll go into. But they provide very good, quality service here in Panama City and have been a fixture in this town since almost the beginning of this area.

Here’s a picture of the heavy wall gas pipe manufacturing that Burgh Steel makes. They import steel from overseas as well as domestic. So we do have healthy, barge traffic coming into the port and steel from all over from west of here and on the Mississippi River that they bring barges down loaded with steel for manufacturing. Oceaneering, to the tech group in here, this is the world’s largest cabler machine for undersea umbilical and they produce everything to make that cable to run oil rigs and underwater production wells remotely and they wind all these cables together, they do it on plastic extrusion and make that. So a very high tech industry here in Panama City and we’re glad to have them. These are some images of some of the cargo operations that we have. We have a very healthy container trade to Mexico, to the Yucatan region. As a matter of fact, we are the busiest US port for container water-borne trade to and from Mexico. It’s a company called Linea Peninsula that offers container service to and from the Port of Progresso twice a week with very fast ships running direct routes to and from Panama City. We have two 100-ton mobile harbor cranes that handle containers, handle steel, handle project cargo and we also have a 100-ton rail-mounted gantry that we do a lot of barge work with that travels on rail. And then we have a 300-ton project crane here. So almost no load is too big to move through the Port of Panama City. Just a picture of some of our equipment. This image here is what they call a container reach stacker. It can stack loaded 92,000-pound containers five high but it can also handle a wide array of cargoes. We handle yachts, we handle boats, we handle steel tubing, we handle project cargo, tractors, other equipment with them. They’re very versatile machines so it’s just kind of an example of the wide range of handling equipment that we have to support the needs of shippers moving through the port. We also have a fleet of forklifts ranging from 6,000 pounds up to 36,000 pounds. And then we have four of these machines along with our cranes and then we do our own rail switching on the port as well. So we work with the Bay Line and cars delivered to the port, support employees that spot those cars to load and unload cargo. These are some images of the break bulk cargo that we handle. We have stevedoring companies on the port that load and unload the ships and place the cargo on the docks or in the warehouses for us. And so they’re experiencing a wide array of cargo. So we handle metals, we handle craftliner board, we handle pulp, we handle machinery components, and they as well have a full fleet of forklifts to use to load and unload the vessels with. These are some images of some of the heavier cargoes that we handle, including lumber. But the image on the left is a 100-ton piece of project equipment that we’ve handled at the port not long ago just to show our capabilities for contractors and project shippers. We handle a lot of heavy wood-crated products that are moved by crane and maybe two forklifts to load trucks and then we also handle a lot of import lumber coming from Europe. So just to showcase again the capabilities for prospects that may be looking at projects here with the rebuild for Tyndall. We handle bulk commodities. So we handle biomass fuel and we also handle aggregates on and off the port and then we have a special bulk terminal that handles these aggregates, just to show the capabilities again. This is an aerial map again showing the ship channel for the port. If you can see that upper left hand corner is our West Terminal, known as Dyers Point. And then the red line is the new ship channel that’s going to our new East Terminal. And the deepening of that channel to 36 feet is gonna commence in December this year, which is gonna start right when we’re finishing the new bulkhead for our East Terminal. This is our artist’s rendering of our new terminal. This is adjacent to the West Rock Paper Mill and directly across from Tyndall. So when you’re standing on the dock, you can see Tyndall Air Force Base and the Dupont Bridge going over. Currently, the warehouse you see is a 260,000-square foot building. As a matter of fact, we had just finished the first 150,000 square feet two weeks before Hurricane Michael hit. So needless to say, we got to build a brand new terminal twice. (audience mumbling enthusiastically) So what we had done is we were able to move the cargo we were handling through there to our West Terminal and we’re building out the full 260,000 square feet. But that gives a state-of-the-art, modern break bulk and forest products warehouse that we can work a wide variety of cargoes in. And then we also have an almost 200,000-square foot open area, as you can see in the bottom section of that rendering. We’ll handle lumber and metals and other commodities through there. The first phase includes a 900-foot deep-water berth that currently right now is sitting at 30-foot depth of water but we’ve driven a new bulkhead to support 40 feet of water and again, the dredging starts in December. So we’re really excited about this investment and port expansion in Panama City and the region. This picture is a few weeks old. Actually, it’s probably a couple of months old but it shows rebuilding of the right side of the warehouse and going ahead and adding the new side. There were a lot more trees in that picture prior to October of last year. But we just wanted to show you what we were doing there. We do have a full support railyard. I will say that the new East Terminal is going to be more conducive for truck deliveries for cargoes that may be needing to be transloaded to barge and then rail deliveries for our IDC, possibly project rail deliveries to the West Terminal, just to kind of give you the lay of the land of how our terminals are gonna be operating. This picture here is an aerial of our intermodal distribution center up 231. We have 250,000-square foot of modern distribution warehousing. We have a company there that is doing vendor-managed inventory for a local company here, Ingersoll Rand, and are also doing fulfillment services and then we also have FedEx Ground that’s there. And in the kind of the lower middle you see kind of a big paved area and aggregate area and that is our rail transfer facility. That is a special-built facility that the ports developed to be able to transload bulk and break bulk commodities from rail to truck. It’s fenced and secured, there’s captive drainage, all utilities are there and can be utilized for commodities such as steel or aggregate cement block. Other commodities that may need to be come in and staged off site and then can be loaded to truck and moved in the off hours for building projects. At that site, we also have a 55-acre certified site through Gulf Power and McCullum and Sweeney that’s heavy industry ready, just to kind of give you a more overview of the development that we’re putting in in that area up there. So we’re really excited about the future of that and know that that facility is available, if needed, for contractors to work directly with the Bay Line and their Choice terminal subsidiary for moving construction materials. This just shows another image of the facility. It clearly shows the fence area. It’s right adjacent to Highway 231 and another plus to the facility is you don’t have to have over-the-road trucks coming through town. They can turn up there and then you can have local drymen work ’em at night. So there’s a lot of pluses to that facility. It may work into the supply chain for the construction companies. So just wanted to make sure you knew that our port is vibrant, it’s active, it’s growing, and we’re excited to possibly contribute and assist with the rebuild of Tyndall. As we all know, Tyndall is very important to our community. Again, thank you for the industry day, thank you for the opportunity to speak, and I’ll be here to answer any questions after. Thank you very much. (audience applauding)

Thank you, sir. And now let’s welcome Kirk Bedford from the Bay County Rail Line, General Manager of the Bay Line Railroad, AN Railway, Chattahoochee Industrial Railroad, Hilton and Albany Railroad. You’re a railroad guy I guess, yeah. Welcome to the process.

A lot of railroads. All right everyone, by a show of hands, how many of us have ever been blocked by a train? (audience laughing) So from now on, call Alex okay. All right, here we go (laughing). Genessee and Wyoming and Bay Line Railroad, this introduction is gonna feature Genessee and Wyoming, a few things you may not know about us, the Bay Line Railroad, also some industry knowledge, and some of the best commodities for rail, and how G & W and/or the Bay Line can help with this project that Tyndall has in front of us. So the Wyoming and Genessee and Wyoming does not refer to the state Wyoming. Actually in upper state New York, where Genessee and Wyoming started, it was a 14 short line mile railroad that actually serviced the salt mine and produced salt up in Western New York during the winter times. You know in Ohio, Chicago, those areas in the winter, you have salt trucks, plow trucks, things of that nature. So that’s how Genessee and Wyoming started in that county in upstate New York so just a little history there. Okay, right now Genessee and Wyoming, we have about 3000 customers. Our carloads annually about 3.3 million. We have about 8000 personnel worldwide, 120 plus short line railroads. That equals about 16,000 track miles. And we have about 1350 locomotives. Our North American operations consist of six regions. As you can see, the Western Region, the Midwest Region, the Southern Region, that’s what the Bay Line Railroad is a part of, our Coastal Region, and the Northeast Region up there in New York, and also the Canada Region. I’ve had the opportunity to work in just about all those regions so a lot of experience there (laughing). And as Alex just mentioned, significant port rail franchise so we serve more than 40 major ports on three continents. The scope ranges from North America and Australia ports served by railroads to providing a last mile rail service within Europe’s busiest container port from the municipal port authorities that choose to lease their railroads to the company under long-term contracts (i.e., we purchased Freightliner a few years ago and that completed the door-to-door service transporting maritime containers from major UK ports to in-delivery). And there we are right there at Panama City there here with Alex them. So Bay Line Railroad. Bay Line Railroad has 154 track miles. We interchange with the CSX and the NX and also our sister railroad, which is Hilton Albany there, Albany Railroad. Some of the commodities, as Alex mentioned earlier, some aggregates for us, chemicals, coal, food, feed products, forest products, metallic ores and minerals, steel and scrap. And we also have rail car storage available as well. The Bay Line was purchased by G & W in 2005. Oop, that’s too far. And this just another highlight that Alex mentioned in his piece there of the Choice Terminal. And so it’s about 20 rail car spots there. Alex also mentioned the 5-acre staging area and it’s approximately 13 miles to the port and it’s a Choice Terminal that is available for all truck traffic that is coming in. Here’s a picture of kind of how that works. You’ve got rail cars sitting there. The process of transferring a shipment from one mode of transportation to another. It is mostly commonly employed when one mode can not be used for the entire trip. So for an example, we don’t have rail access straight to Tyndall Air Force Base so you would use a transload facility to transload products and then we can get it over to Tyndall from there. Typically an all in inclusive rate can be provided to cover all services. Again, 125 acres rail serve industry site and 250k square foot of the warehouse space that Alex mentioned. 1000-square foot of warehouse space currently available. 55 acres certified through Gulf Power. Opportunity to build or receive unit trains. 4500 feet of main spur with capabilities of expansion as well. This is just some more pictures, some of the same stuff Alex talked about a minute ago. A little railroad knowledge. There are 233,000 miles of rail in the United States. Historically, if you look up here, your Class I railroads, such as BNSF, Union Pacific, KCS, those railroads, they like to run from east to west across the United States. CP and CN, they like to run north and south. So historically railroads want to go from east to west and this is where the short line industry come in. So for an example, you’ve got a train coming out of Chicago and you want to ship some product to California. However, it may be some freight on that train that probably needs to come south down here and reach its way to Panama City. So that’s where short line railroad would interchange with a Class I, run the freight down here and deliver the door-to-door service. Sort of like a glorified UPS or FedEx. Class I railroads make up 130,000 miles of track while 500 plus short line railroads make up 103,000 miles of rail. And Genessee and Wyoming North American footprint includes 13,000 miles of that track. As you can see, we’re located all over the map here, which totals about 41 states. In the United States, the classes of railroad industry are based on revenue. Class I based on having annual carrier operating revenues of 467 million. Class I railroads, as I mentioned just a second ago, Burlington Northern Santa Fe, Canadian National, Canadian Pacific, CSX, KCS, Norfolk Southern, and Union Pacific. Class II railroad, call it regional railroads, having revenues less then 467 million but greater than 37 million. For an example, the Montana Rail Link and Florida East Coast are examples. Class III, short line having revenues less than 37 million. A little more about the industry, Class I railroads. As I just mentioned, they’re known for the long haul from A to B and that’s where you have what they call shipping lanes and pricing lanes and things of that nature. So that’s just another example of what the Class Is try to go from Point A to Point B. Short line railroads provide the short haul connection between the customer and the Class I railroad, first and last mile. Dual connectivity is very desirable, as they allow the customer rail choices, which in most instances lower transportation costs and increases service. We take many smaller customer shipments, and group them together, making them more desirable to the Class I allowing these shipments into the Class I rail system. Some of the best rail commodities for rail. Rail transportation is cost-effective when the commodity is dense, heavy, and traveling extended distances. Furthermore, anything that ships by truck can definitely be shipped by rail. Some examples, dry, angular products that flow easily such as cement, flash ash and shipped in covered hopper, cars and trucks that are shipped by auto racks, flatcars are used by lumber products, steel pipe, just to name a few. The largest and heaviest loads, such as military vehicles, transformers, specialized equipment, log, coiled steel, are moved on flatcars. Coal, coke, scrap metal, iron ore and other aggregates are moved by gondola cars. Chemicals, petroleum fuels, lubricants, and other liquified products are placed in the tanks and can be moved as well. Boxcars are used to move brick, concrete block, or any product that is stackable or bagged, to include paper. How G & W and Bay Line can help you, we have a design and service team located in Jacksonville, Florida. They can provide all these different types of services. Database is available for properties, we can estimate costs, we can talk about freight rates, and plenty of resources to help your rail business. Contact information, if you’re blocked by a train, like I said at the beginning of this presentation, call Alex (audience laughing) but everything else is here, it’s G & W and the Bay Line. (everyone laughing) And of course our goal everyday is to continue to stay injury-free for all our employees and customers as well. (audience applauding)

Thank you for that. Yeah, now it’s time for some Qs & As. We open the floor to all questions. We have a hand over here. Do we have a microphone on the way?

[Man] Yeah.

[Man] Hey, if Tyndall wanted to have a railway that came to the base, what would it take?

[Kirk] Act of Congress.

[Man] It’s that challenging to do?

Well, no it’s not that easy. It’d take a lot of licenses and things of that nature. But that’s not something that could happen pretty quick. That’s something that has to be planned and looked at and it’s a lot of stuff that goes into that.

[Woman] Is that like a 5-year, 10-year, 15-year—

Probably five to 10. Right, Alex? Five to 10 or more (laughing).

It would be fairly complicated due to permitting, right of way acquisition. You would be building a very long trussel over a navigable ship channel, a drawbridge, it would be a pretty big project.

All right, over here, sir.

Presumably you both have a full plate of work right now. Maybe not full because you’re here marketing for more but so the big question is if when we get into what I think is the high water mark of Tyndall rebuild, where we have maybe 15 to 1600 craft labor coming in from out of state or combining with your existing labor force and a couple of billion dollars worth of construction all kind of jamming the ports at the same time, do you have the capacity to surge to satisfy that demand?

Depending on the cargo activity that would come in, we would be able to work closely with the coordinators that are gonna be handling these projects. And I imagine that the Port Authority would be contacted by the contractors or either logistics companies that are in charge of moving the goods, depending on the purchase agreements, and they may contact the port to say we’re gonna move this by barge or either by ocean-going ship and then it would just be we would handle it as general cargo through the port. So right now our port is handling just under 2 million tons a year and we expect the East Terminal to provide several hundred thousand tons of capacity annually through there, eventually doubling our capacity. So I feel confident that we would be able to work very closely with those logistics firms and schedule those shipments through and be able to take care of both the vessel and barges that may have that cargo for you.

Now in respect to the railroad, it wouldn’t necessarily be a challenge for us because we would go to the transload facility. So they would just have to coordinate with us and see where the product is coming from and we’ll looking at shipping costs and shipping lanes and that wouldn’t be an issue for us.

Do you have a question here. There’s right one over here there’s a question.

I’ll jump in. Captain Zach Bierhouse. I’m representing the Tyndall rebuild. So provided we could bring materials in by barge and we had some infrastructure on Tyndall to receive that, what do you think the process of security would look like? Do you have a way to check inbound cargo that would meet our security requirements or do you have advice that we could set up on our infrastructure to receive materials?

The Port Authorities, we operate the East and West Terminals so I’m not sure quite the role of the Port Authority on Tyndall property if you were to develop a temporary barge transfer facility. That may be a terminal operator that may be selected by Tyndall or talk to. We could certainly get you in touch with people that may be experts in that field. As far as the security requirements for the port, all containers that come into the port, go on and off the port are scanned and go through a radiation portal monitor. And then we have to have what they call customs clearance on all cargo coming through. Now domestic cargo, if it’s arriving by barge from a domestic river port, for instance, that would just be domestic cargo and the trucks may or may not be randomly inspected at our cargo gate. So we would check the cargo as a Port Authority when we handle it out, per the requirements that the logistics or the shipper asked us to do.

Another question over here sir.

Yes, if I may, this is more for the Air Force. I’m just wondering how much of the cargo can be brought in by plane? You can avoid a lot of the road traffic there. And part two, how much of the product needs to be made in America?

Anybody in the Air Force want to take that? (man speaking off mic)

[Woman] We’ll have to defer that ’til the, at the end when we do the overall—

Yeah, we’ll have an opportunity to re-ask that question at the next panel. Any other questions? Over here, LT, we have one over here.

Hi, good afternoon, Mike Ross of New Community Homes. Just had a question about both of y’all have facilities and wondered if you had the availability of either space to be leased out either in warehouse or just a storage of any kind?

So from the Port Authority standpoint, the Port Authority, both terminals are considered public terminals and they’re operated under a public tariff that’s published. So the Port Authority assesses a handling rate per ton of cargo moved over the port and then we have so many free days and then there’s a storage assessment for that cargo. So that’s how it would work on the Port Authority docks. So we do have laydown area, both covered and an outside area at the terminals and so that cargo would be handled per tariff. And then up at the IDC or Choice Terminals, they may have an agreement in place to work with you or a designated company on storage and consolidation or breakdown and separation of materials that are coming in. (man speaking off mic) I do know that 150,000 square feet of it is full and I believe that it may not be much longer on the next 100. But there is the options or the possibilities that the Choice Terminals, you could set up rough type building systems there and there is land available for further improvement and development for warehousing.

Also on the rail side, if your product is being shipped by rail and you need some time and you’d like to store your product by rail, we can certainly store the cars. We have enough trackage to store cars and they can stay in storage for as long as you need to.

Anyone else, any other questions? Oh, right here in the front. Yes, sir.

For Alex, you may not be able to answer this but just really rough order of magnitude, when you go from the dredge points, let’s use the East Terminal, towards Tyndall, pick any spot there, what’s a depth of that water? How does it change from a 36, 40-foot dredge to—

If I’m not mistaken, and I’m not quite sure about the entrance into the fuel docks or aggregate docks at Tyndall, but I believe they’re at 12 feet. Our deep draft is gonna be 36 foot and then I believe the Tyndall docks may be 12 feet for barge traffic.

And then for Kirk, expressed what I’m looking for is at the IDC, expressed in, I don’t know, short tons, boxcars, what’s the transloaded throughput there capability? Express it as a number of boxcars that can be transloaded onto trucks per day, week, month. Rough order of magnitude. I’m just trying to get a feel for these facilities. It’s not a hard trick question. I just figured you might have an idea.

It’s about 21 per ton.


Did that help?

Yep, that does, thanks.

Do we have a question over here? Oh, you just scratching? Okay, never mind. In the back. That’s not a scratch, that’s a hand.

Thank you. Hi, I’m Brian Topple with Kinley Hart. Do the rail lines extend to the ports?

[Kirk] Yes.

[Brian] That was a tough one.

[Moderator] Any other questions? All right.

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