Reverse Flow: Hapag Launches Rail Link From Virginia to California

The East Coast and Gulf Coast are taking an increasing share of Americas lucrative container-import....

The East Coast and Gulf Coast are taking an increasing share of America's lucrative container-import trade. With a newly-announced service, the Port of Virginia is taking this trend to its logical conclusion by marketing the services of an East Coast port for imports of California-bound cargo.

Hapag-Lloyd has decided to rework its Europe-Mexico-USA Gulf Coast Express (MGX) rotation to make a single East Coast call at the Port of Virginia, and its focus for the offering is on container-by-rail service for inland markets. This is not unusual in itself: the Port of Savannah has invested heavily in rail infrastructure to expand its reach into the U.S. Midwest, and the strategy has brought in ever-increasing container volumes. But the Hapag-Lloyd service is not marketed only to Midwestern customers. According to Stephen A. Edwards, CEO and executive director of the Virginia Port Authority, the new MGX service will help the Port of Virginia "be part of the solution for cargo owners on the West Coast."

This trade pattern is already up and running. The MGX service began operating in mid-April with the arrival of the Synergy Antwerp at Virginia's Norfolk International Terminals. Nearly 1,000 of the vessel’s containers were loaded onto intermodal rail cars and transferred by Norfolk Southern to Chicago, where they switched to another rail carrier and were delivered to the ports of Los Angeles and Oakland.

“This is an innovative decision by one of our long-time customers to take advantage of our efficiency and our rail reach into the Midwest,” said Edwards. “It’s a unique service, but it is indicative of a very challenging trade environment."

The Port of Virginia plans to keep investing in its container-on-rail infrastructure to attract more cargo for inland destinations. It will be investing $1.3 billion over the next three years to add rail capacity, renovate two berths, and dredge and widen its shipping channels for ULCVs.