Railroad banks on Resurrection Bay freight
With the addition of Tote to the shippers operating out of Seward the freight area is appearing more and more congested. Stacks of colored pallets reach to the sky and cranes pierce the skyline. Through its Seward Master Plan, Alaska Railroad Corporation is documenting a strategy to diversify and capitalize on its property and accommodate the additional business that the trends indicate is coming. That includes creating more dock space and organizing and developing its property for client businesses.
On Tuesday, the ARRC board of directors was presented with the Seward Master Plan, a proposal to expand and enhance the ARRC’s property along the Seward waterfront. The plan emphasizes rising revenue from freight operations based on a 142 percent increase in income for the ARRC since 2008. While cruise ship traffic and income has increased in recent years, there is considerable fluctuation and it’s not a straight line trend. In 2012, freight revenue eclipsed the ARRC’s business with cruise ships which was down only $56,000 from its peak in 2009.
Jim Kubitz, vice president of ARRC Real Estate and Facilities, notes that accommodating existing barge traffic can be problematic. “Shippers hold up in Icy Strait waiting on weather and then race to Seward. We can have two or three barges show up at once,” he said. However, he says that ARRC clients and their crews love Seward. “It’s a friendly town with plenty to do and we can offer shippers good connections on shipping via rail or truck,” said Kubitz.
Previously federal monies had been sought for a dock extension, but that particular funding source was suspended. Now that the federal Tiger grant program has been revived, Kubitz and the ARRC will be taking a shot at a much more comprehensive proposal. They are also pursuing other funding sources and seeking partners such as the Alaska Industrial Development and Export Authority in leveraging investment to move a five phase, $80 million plan forward.
According to Kubitz, the existing numbers make the case for expanding facilities to handle projected traffic but the kind of growth that will accompany the increase will require expansion and enhancements in other areas of the ARRC Seward complex.
Projecting the existing trend in freight traffic and revenue into the future produces a figure that about triples the 2012 revenue figures within five years. The master plan proposes to more than triple available freight dock capacity to handle that increase. Phases 1 through 3 are aimed at extending the existing freight dock as well as dredging and fortifying a barge basin alongside what would become the east side of the freight dock.
Just widening the dock will allow greater flexibility in staging incoming freight. Kubitz notes that ARRC Seward operations and their clients frequently mention a need for additional “lay down” capacity.
Widening the freight dock carries a price tag of $1.2 million and is the least complicated plan component from a logistics standpoint. Fill has been stockpiled on ARRC property in expectation of the project and there is momentum behind getting those piles to their intended destination. Furthermore, there is already a permit in place which the permitting section of the ARRC has been keeping updated. Also, according to Kubitz, the City of Seward administration has been instrumental in moving that particular initiative forward.
Kubitz expects cooperation between parties including the Kenai Peninsula Borough will help make the dock widening a reality by fall. He also adds, that the ARRC staff and administration are happy to be working arm-in-arm” with the City of Seward and he appreciates the productive relationship.
The next steps, moving the jetty and dredging, are a more involved prospect requiring permitting as well as funding on the order of $32 million. However, Kubitz says the permitting process should be relatively straightforward with the exception of filling the uplands. That may require some tradeoffs with habitat mitigation. Without at least widening the dock and dredging out the barge basin, Kubitz and his team estimate that growth will be limited to about 6 percent a year, not even doubling revenues by 2021.
Phase 4 of the master plan depicts commercial development which will improve existing real estate for lease to business and industrial operations as well as provide additional infrastructure such as utilities along extensions of Port and Airport avenues. Connecting Port Avenue with Airport Avenue will also provide an alternate route for commercial traffic.
How the ARRC’s financial situation and impending reorganization will affect the potential of its Seward operations is unknown. A press release announcing the details of the ARRC’s status and immediate plans will be available today.