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A growing gateway for steel transportation

Jul 29, 2018 | 08:00 PM |


Over the past few decades, as steel production shifted away from traditional industrial centers on the East Coast to the American Midwest, essential logistics and transportation services to support that growth kept pace. Growing in tandem with the “steel capital of North America” has been the Ports of Indiana, earning the organization the AMM Award for Steel Excellence as the Logistics/Transportation Provider of the Year.

The Ports of Indiana has three ports – Burns Harbor, Mount Vernon and Jeffersonville – and utilizes two waterways – the Great Lakes and the Ohio-Mississippi Rivers – to create one system that reaches the Gulf of Mexico and the Atlantic Ocean. Businesses have flocked to the ports, which today handle more than 11.8 million tons of products per year, generating more than $7.8 billion per year in economic activity and supporting nearly 60,000 jobs.

Indiana’s port authority was created as “a body both corporate and politic,” designed to be a self-funded enterprise that conducts business to generate economic growth and tax dollars for state and local governments. The Ports of Indiana operates like a business with no financial reliance on local communities or state tax dollars, and 100% of port revenue is reinvested into infrastructure to maintain, operate and grow the ports. Although the state invested $90 million to build the ports, all three facilities eventually became financially self-sufficient by developing successful revenue-generating harbor activities and land leases with companies that ship cargo by water, rail and truck.

“The Ports of Indiana have been self-funded since 2005 after implementing a new strategic plan to develop and maintain a world-class port system that operates as an agile, strategically driven, self-funded enterprise dedicated to growing Indiana’s economy,” said Jody Peacock, senior vice-president. “Steel is critical to our success and our future,” he added.

The Port of Indiana – Burns Harbor is located in the “steel capital of North America” and is home to more than 30 companies, half of which are in the steel supply chain. Two large producers, ArcelorMittal and U.S. Steel, are located on the sides of the port, and numerous other companies move materials in and out of the port. Among other steel supply chain companies located at the Burns Harbor port are Mid Continent Coal & Coke, which processes coke screenings for local mills; Phoenix Services, which processes and distributes blast furnace slag; and numerous processors and distributors such as Indiana Pickling, Steel Warehouse and Ratner Steel.

The Port of Indiana – Jeffersonville handles a million tons of steel per year and has attracted 14 steel companies to locate on-site since 1990. Those engaged in steel processing and distribution include Delaco Kasle Processing Indiana, Mill Steel, OmniSource and Steel Dynamics, with production largely going to the automotive and appliance industries. The Jeffersonville facility provides both direct and indirect support to the Midwest automotive industry, and all of the top six automakers in the United States use some product shipped through this port.

The third Ports of Indiana facility, at Mount Vernon, is less reliant on the steel industry with its primary customers being the energy and agricultural industries. However, Mount Vernon regularly handles barge shipments of steel on the Ohio River for processing in the Midwest.

All that activity contributes to some impressive numbers. On an annual basis, the Ports of Indiana at its three locations handles: two million tons of steel; 100 ocean-going ships; 200 Great Lakes vessels; 5,000 US inland river barges; 65,000 rail cars; and 710,000 trucks. Because all steel supply chain needs are met on the Ports’ property, steel companies are said to generally experience savings of $10 per ton in supply-chain costs compared with non-port activities.

The Ports of Indiana’s facilities are also classified as Foreign Trade Zones (FTZ), which can reduce, delay or eliminate import duties on certain products in the zone. As a statewide administrator of foreign-trade zones, the Ports of Indiana serves as a grantee for FTZ applications in counties surrounding its three ports and authorizes additional grantees to sponsor FTZs in other areas of the state.

“The last four years have been the best in the organization’s 57-year history and from all indications, we expect to continue this growth trajectory into the next five years,” Peacock said. Plans over the next few years call for $20 million in expansion at the Burns Harbor port, an additional $20 million in expansion at the Jeffersonville facility and a possible fourth port.

“Those investments will drive growth in steel and manufacturing operations, and we are looking closely for steel businesses that could locate at a new Ohio River port in Lawrenceburg, Indiana. We recently secured a 500-acre megasite on the Ohio River, with access to five Class 1 railroads, which is actively being marketed to large steel producers.

“Being recognized for this award acknowledges our past successes and raises awareness of what we can offer steel companies in the future. We hope this award will encourage steel companies to consider Indiana’s ports for a future home that provides ocean access in the Heartland of the country and a long-term competitive advantage for growing business,” Peacock concluded.



 

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