MONTEVIDEO -- Western Minnesota farmers won't need to change their address, but they are soon to gain the same access to overseas markets as if they were raising their crops in the heart of Minneapolis, or perhaps Chicago.
That's the advantage being brought to Montevideo, where construction is underway on the country's first terminal for containerized shipping on a short-line railway, according to officials with North Star Rail Intermodal in Edina.
Dozens of community and company representatives gathered Wednesday for a groundbreaking ceremony.
The company is building its terminal on the Twin Cities and Western Rail line. The terminal will handle the standardized containers in which most of the world's goods now move on ships, trains and trucks.
All of the country's existing, intermodal terminals that transfer the containers from trucks to trains are located on largerail lines. Most are located in large metropolitan areas. They require extensive investments in cranes and overhead equipment to handle the containers.
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The North Star project features the rollout of RailRunner technology that does away with the need for the costly overhead systems. Instead, specially designed rail chassis allow containers to be slipped from truck to rail and vice versa without lifting.
Perhaps most important, the location on a short-line railroad provides the efficiency that comes with bringing transportation access directly to the producer, said William Dankbar, North Star vice president and chief operating officer.
The Montevideo location places it in the heart of the western Minnesota and eastern Dakotas region that has an aggregate, 2007 export transportation market value estimated at over $550 million, according to North Star.
It's a market that's expected to grow to $650 million by 2011.
The opening of the Montevideo terminal could make this "the center of intermodal activity in the upper Great Plains,'' said Charlie Foskett, president and CEO of RailRunner. Dankbar said the terminal will put western Minnesota farmers in a position they've long desired. The Montevideo terminal will rely on the Twin Cities and Western Line for its connection to the Canadian Pacific Rail's container terminal in the Twin Cities. The Canadian Pacific connection provides "access to the world,'' said Craig Damstrom, president and chief executive officer for North Star. It offers service to Canadian ports in Vancouver, British Columbia and Montreal.
The Montevideo terminal is projected to be ready for operation by late March. It will be able to handle six containers an hour.
The company believes that at least initially, most of those containers will be filled with distiller's dried grains produced by area ethanol plants. North Star officials said the containers will also facilitate the export of identity preserved grains and similar products that need to be segregated.
They also predict that their terminal will carry a growing volume of bulk freight. The efficiencies of containerized shipping -- and incentives to return the 12 million containers that carry imports to the U.S. each year -- make possible savings of $20 to $30 per ton in transportation costs, according to the company.
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Dankbar noted that the terminal will also make it possible to ship products more economically to Montevideo. That opens the possibility for a host of spin off developments in Montevideo.
