Report # 2 in a Series of Transportation and Trade Studies of the Appalachian Region 

Meeting the Transportation Challenges 

of the 21st Century: Intermodal Opportunities 

in the Appalachian Region 

Prepared for: 

Appalachian Regional Commission 

Prepared by: 

Rahall Transportation Institute, Marshall University 

And 

Wilbur Smith Associates 

December 16, 2004 
1

CHAPTER 1 

THE ROLE OF TRANSPORTATION IN THE DEVELOPMENT 

OF THE ARC REGION 

Introduction 

Through much of the 20th century, the businesses, communities, and people of Appalachia 

suffered the consequences of being isolated from economic opportunity. Much of the nation’s 

highway building in the mid-20th century passed the region by, due to the construction and 

financial challenges posed by Appalachia’s rugged mountain chains and deep valleys. With key 

interstate links diverted elsewhere, many of the Region’s businesses, communities, and residents 

discovered that they were disconnected from the new highway network and from the national 

economy that it fueled. As the impact of this isolation grew in intensity, the Appalachian 

Regional Commission (ARC) worked to establish the 3,090 mile Appalachian Development 

Highway System (ADHS), with the goal of overcoming the social and economic consequences 

of the Region’s isolation. 

In an effort to prevent a reoccurrence of the harsh consequences of isolation, this study looks into 

the future to evaluate the powerful forces that are influencing the economy and to identify both 

transportation challenges and opportunities that will shape Appalachia in the 21st century. 

Having devoted much of the past half-century reacting to the Region’s transportation 

deficiencies, this initiative is focused at a more proactive approach that identifies opportunities 

which can better position Appalachia for economic and societal success in the years to come. 

Looking ahead to the future, the economic influences of the quickly emerging global economy 

will reshape the way Appalachia interacts with its partners and competitors, whether across the 

street or around the world. Economic competition and opportunity no longer transcend state or 

regional lines, but now extend to the farthest points on the globe. This is a complex and 

demanding new economy that has been born of advanced information and communication 

technology and an extensive and highly refined global supply chain. The effect of globalization 

on the transportation system is profound, as cargo volumes are rapidly expanding and broadly 

diversifying. This study analyzes the changing characteristics of commodity movements to, 

from, and through the Region, evaluates both the transportation strengths and weaknesses that 
2

The ADHS was developed to link 

historically isolated sections of 

Appalachia to commercial activity 

within and outside the region and 

has given rise to significant 

economic development benefits 

for the Region. 

Appalachia faces in adapting to such change, and establishes a strategic and proactive vision to 

help the Region compete in the global economy of the 21st century. 

A reoccurrence of the sustained economic distress that 

grew from Appalachia’s isolation during the middle of the 

20th century can be avoided in the future. Doing so requires 

the identification of trends and challenges and the 

acceptance that old solutions cannot sustain Appalachia in 

the dynamic and rapidly changing marketplace of the 21st

century. 

Logistics and the Transportation Revolution 

Within the eastern half of the United States, the Appalachian Development Highway System 

(ADHS) is an integral part of the overall transportation network. The ADHS was developed to 

link historically isolated sections of Appalachia to commercial activity within and outside the 

Region and has given rise to significant economic development benefits. For example, a 1998 

study estimated the ADHS had stimulated 16,270 full-time equivalent jobs and approximately 

$426.0 million in wages and salary as of 1995.1

Today, freight movement is undergoing revolutionary changes. The combination of increased 

containerization of goods, combined with unprecedented advances in logistics technology, has 

made both intermodalism and multimodalism the new global standards in freight transportation. 

Because of this, adequate highways alone are no longer sufficient to serve the transportation 

needs of the new economy. A recent report of the United States Chamber of Commerce 

concludes, “The United States is the world’s greatest trading nation. Its economic health depends 

on the current and future efficiency of its intermodal system.” Without question, a region’s 

competitive position will depend on access to efficient, seamless intermodal transportation that 

features interconnected highway, rail, air, and marine transportation capabilities. Because of its 

geographic position, Appalachia serves as a crucial land-bridge for both north-south and east-

 

1

 The executive summary the 1998 study can be found on ARC’s website at: 

http://www.arc.gov/index.do?nodeId=1040
3

west commerce. Its role in bridging the nation’s heartland to key international gateways positions 

the Region to reap economic development benefits by improving transportation efficiency, 

expanding capacity, and taking advantage of strategic intermodal opportunities. 

The global economy is becoming more integrated. As nations throughout the world increasingly 

embrace free market economics, trade polices are likely to become even more liberalized in the 

years ahead. Increased open trade has served as an “engine of growth” among trading partners 

and has been accelerated through the establishment of the World Trade Organization and 

associated trade agreements such as General Agreement on Tariffs and Trade (GATT), NAFTA, 

Free Trade Agreement of the Americas and the increasing liberalization of trade in the Pacific 

Rim. 

In the US, imports and exports continue to increase, both in absolute value and as a percentage of 

GDP, as shown in Exhibits 1.1 and 1.2. Despite a slight decline in 2001, both imports and 

exports have been increasing at an average annual rate of 16.3 percent and 10.0 percent, 

respectively. The growth in imports has consistently outpaced that of exports and this trend is 

projected to continue for the foreseeable future. 

As Exhibits 1.1 and 1.2 illustrate, the passage of NAFTA in 1992 and its implementation in 1994 

helped accelerate the growth in both imports and exports. However, the acceleration in imports 

has been significantly faster than exports. 
4

Exhibit 1.1 

U.S. Imports and Exports, Goods (in 1996 chained dollars) 

0

200000

400000

600000

800000

1000000

1200000

1400000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

Millions of dollars

Exports Imports

Source: U.S. Department of Commerce, Bureau of Economic Analysis 

Exhibit 1.2 

U.S. Imports and Exports as a Percent of GDP 

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

19871988

198919901991

19921993

19941995

1996

19971998

199920002001

Exports Imports

Source: U.S. Department of Commerce, Bureau of Economic Analysis 
5

The surge in Latin 

American trade during 

the nineties has put a new 

emphasis on emerging 

north-south trade lanes 

that penetrate the ARC 

region. 

The globalization of the world economy and the resulting increase in international trade have had 

and will continue to have significant implications for transportation networks worldwide, 

including those in Appalachia. 

Evolution of Trade Corridors 

The globalization of trade has resulted in dramatic changes in 

domestic freight corridors that support international commerce. 

For example, increased trade with China and the Pacific Rim has 

led to the development of enhanced east-west transportation 

infrastructure. NAFTA is requiring similar development of northsouth corridors. The expansion of trade agreements to include 

Latin American countries is already having significant impacts on transportation needs in the 

Appalachian Region. The emergence of the west coast as the primary entrance point for Pacific 

Rim trade put early pressures on the development of major east-west corridors such as I-80, I-40, 

and key transcontinental rail corridors. The surge in Latin American trade during the nineties has 

put a new emphasis on emerging north-south trade lanes that penetrate Appalachia. The increase 

in global trade coupled with other developments, including the proposed widening of the Panama 

Canal and the establishment of transshipment points in strategic locations such as the Bahamas, 

suggests that north-south lanes, as well as east coast ports, will continue to see dramatic 

increases in the volume of goods being handled. 

The densification of both east-west and north-south trade lanes provides Appalachia with an 

opportunity to take advantage of becoming a land bridge for trade activity by combining allwater service to key East Coast and Gulf ports with intermodal rail movements into the nation’s 

hinterland. Exhibit 1.3 illustrates the land bridge concept for Appalachia. 
6

Exhibit 1.3 

ARC Region as a Land Bridge for International Trade 

West Coast

Market Area

Gulf

Market Area S. Atlantic

Market Area Market Area

N. Atlantic

Market Area

Appalachia can play a strategic role of getting goods between key ocean ports, including NY/NJ, 

Norfolk, Charleston, Savannah, Gulfport and Mobile, and the nation’s Midwest and southeastern 

regions. One way of strengthening the land bridge concept is through “inland ports.” `Inland 

ports provide a short haul rail movement to shuttle containers away from crowded port facilities 

to less congested inland sites for processing and transfer to other rail and truck services. The 

Virginia Port Authority has already developed the successful Virginia Inland Port (VIP) at Front 

Royal, VA. In addition to the VIP, Huntsville International Airport’s International Intermodal 

Center also demonstrates how a fully coordinated intermodal center can attract significant 

economic and employment success. Elsewhere, South Carolina is exploring the potential of 

establishing inland ports linked to the marine terminals of the Port of Charleston. 
7

In essence, the trucks on 

the roads, the containers 

on the ships, and the cars 

on the railroad are the 

new warehouses of the 

21st century. 

The Role of Supply Chains 

The creation of a far-flung supply chain, arising from the need to 

access global supply networks and markets, has significantly 

increased the importance of transportation services. The need to 

link distant markets through seamless commercial networks will 

lead to increased demands for international transportation service 

providers. Thus, the supply chain is often referred to as the new economic unit of competition. 

The changes in supply chains and the resulting impact on transportation needs are illustrated in 

Exhibit 1.4. 

Exhibit 1.4 

The Role of Changing Supply Chains 

Supply Chain Management

Raw Materials & Parts Manufacturing Distribution

Raw

Materials Storage NationalDistribution

Regional

Storage

Local

Distribution Retailers

Supply Chain Management

Raw

Materials

Distribution

Center

Manufacturing Retailers

Customers Customers

Traditional

Emerging Trend

Material flow (delivery)

Information flow (order)

Core component
8

Without question, a 

diversified economy will rely 

on a modally diverse and 

inter-connected transportation 

network. 

As can be seen, advancements in communication technologies have played a key role in supply 

chain management. There are now fewer warehouses and lower inventories all along the supply 

chain. In essence, the trucks on the roads, the containers on the ships, and the cars on the railroad 

are the new warehouses of the 21st century. National and regional distribution and transshipment 

centers are replacing the traditional storage warehouses.

The Need for Multi-modal Transportation Systems 

Another phenomenon associated with global trade is the ever-increasing containerization of 

freight. By packing goods into standardized containers, shippers and carriers can achieve 

agglomeration economies in terms of specialized equipment. Containers also provide safety and 

security measures that are increasingly important. One of the key benefits to containerizing 

freight is that it becomes possible to quickly and inexpensively transfer it from ship to rail to 

truck, without unloading the contents of the container itself. Global trade requires an intermodal 

transportation network due to the containerization of its cargo. As imports and exports continue 

to increase in their relative importance to total GDP, the need for intermodal container 

distribution hubs capable of supporting trucking, rail, air cargo, and potential inland navigation 

service will increase. For example, goods transported using multiple modes increased by 31.2 

percent in terms of value and 6.8 percent in terms of ton-miles from 1993 to 1997.2

Within the current context, it is important to note that globalization is not restricted to only 

manufactured commodities. It is also affecting the trade of raw materials, including coal. In the 

US, domestic users of these resources now have a much broader array of international suppliers 

from which to choose. Without question, a diversified regional economy cannot emerge without 

the support of a modally diverse and inter-connected transportation network. 

 

2

 U.S. Department of Transportation, Bureau of Transportation Statistics and U.S. Department of Commerce, 

Census Bureau 1997 Economic Census, Transportation, 1997 Commodity Flow Survey. 
9

In turn, the globalization 

of production has 

contributed significantly 

to the growth in trade 

flows and has intensified 

the worldwide demand for 

intermodal transportation 

and logistics services. 

The Impact of Foreign Direct Investment on Trade Flows 

In addition to globalization of trade, the flow of foreign direct investment (FDI) has significant 

impacts on trade flows. Foreign direct investment has grown by more than ten fold over the last 

20 years and this trend has significantly shaped the volume, direction and tempo of international 

trade flows. Most recently, inflows of FDI to mainline China have been especially dramatic, with 

FDI rising to almost $53 billion (US) in 2002, making it the largest recipient of FDI in the world 

and a growing production and export center. While the worldwide slump in economic growth has 

led to a decline in FDI flows over the 2001-2002 period, forecasts predict that FDI will rebound 

in 2004. Despite the recent declines in FDI, the stock of worldwide FDI is impressive, generating 

sales by foreign affiliates of multinational companies amounting to $18 trillion in 2002, as 

compared to worldwide exports of $8 trillion.3

Clearly, FDI has affected the structure of global specialization by countries and firms and has 

deepened the integration of global production networks within industries and regions. In turn, the 

globalization of production has contributed significantly to the growth in trade flows and has 

intensified the worldwide demand for intermodal transportation and logistics services. Of 

particular importance for regional development in the United States is the emergence of Asian 

and Latin American-based production centers by foreign affiliates, which have increased the 

volume and tempo of trade and the demand for transportation services. As a result, both imports 

and exports between the United States and these two regions have grown all along the valueadded chain. These trends are forecast to become more pronounced over the course of the next 

decade, with far-reaching implications for transportation and logistics planning of trade-related 

corridors serving the trade gateways of the United States.4

The Growth in Electronic Commerce 

Another trend that has significant impacts on transportation 

infrastructure needs is the growth in electronic commerce. The two 

most significant implications for transportation infrastructure and 

 

3

 “Global FDI Flows Continue to Fall; UNCTAD Now Forecasts 2004 Rebound” by the United Nations 

Conference on Trade and Development, September 8, 2003; “Trends and Recent Developments in Foreign 

Direct Investment” Directorate for Financial, Fiscal and Enterprise Affairs, Organization for Economic 

Cooperation and Development, June, 2003.

4 Latin American Trade and Transportation (LATTS). 
10

Failure to plan for the 

evolving transportation needs 

of the manufacturers of the 

new economy will hinder the 

region’s ability to attract and 

retain these businesses and 

the jobs they represent 

services arising from the increase in e-commerce include: 

♦ Increased demand for better, faster and more flexible delivery service 

♦ Rapid growth in small/high value shipments traveling longer distances 

A potentially positive effect for Appalachia is that growth in transportation service sector 

activities and the emergence of electronic commerce produces smaller shipment sizes, which rely 

on express or less-than-truckload shipping – shipping patterns that already dominate motor 

carriage in lightly populated areas within the Appalachian Region. The increase in less-thantruckload shipping in other regions of the U.S. will lead to less disparate transportation costs, 

thus improving the competitive position of Appalachia. 

Changing Manufacturing and Production Technologies 

Many of the changes in the manufacturing sector over the last two decades have been a direct 

result of increased foreign competition. In an effort to regain a competitive advantage, American 

manufacturers began to modernize their facilities and production technology, as well as their 

management practices. In addition, newer, smaller manufacturers producing a greater variety of 

high-tech and specialized products have started to emerge. Trends that have affected American 

manufacturing include the continued growth of large multinational companies, the rise of 

knowledge-intensive and technology-based industries, and changes in the nature of production 

processes including: 

♦ Just-in-time (JIT) delivery systems 

♦ Specialization and custom-made production 

♦ Lean of just-in-time manufacturing 

♦ Decentralization of manufacturing 

All of these changes have had significant implications for transportation demand. For example, 

the shift toward knowledge-based and high technology production has led to a shift away from 

bulky, heavy shipments of manufactured goods toward lighter, higher value shipments. The shift 

to JIT production has led to the need for JIT delivery services. This requires more frequent and 
11

reliable deliveries, thus putting increased pressure on states to provide adequate transportation 

infrastructure to meet the needs of businesses they hope to attract and retain. 

In regions such as Appalachia that have historically been heavily dependent on manufacturing, 

these changes in supplier-chains and transportation demand underscore the need for long-term 

transportation strategies. Failure to plan for the evolving transportation needs of the 

manufacturers of the new economy will hinder Appalachia’s ability to attract and retain these 

businesses and the jobs they represent. 

Transportation and Economic Development in Appalachia 

The relationship between transportation infrastructure and economic development has been the 

focus of increasing analysis, discussion, and interest during the past decade. This represents a 

new paradigm in analyzing transportation investments. Historically, such investments have been 

valued based on efficiency gains, such as travel cost and time savings. Recently, however, there 

has been a push to promote transportation infrastructure improvements to enhance economic 

development in terms of jobs, income, and tax base expansion. This is especially crucial in an 

economically distressed region like Appalachia. 

Stakeholder groups comprised of elected officials, transportation and economic development 

specialists, government agencies, and business leaders have specified numerous ways in which 

transportation impacts economic development including:5

• Enhancing economic development by lowering the cost of doing business, through 

streamlined transportation efficiencies; 

• Linking key economic centers in a region to global markets, thus making the area 

more attractive for growth; 

• Providing for more efficient flows of commerce through the Region to enhance the 

development potential of areas traversed by these lanes of commerce; 

• Facilitating the movement of people to new jobs and public services; 

• Opening up new sites for commercial and industrial development; 

 

5

 Weiss, Martin H. and Roger Figura (2003). “A Provisional Typology of Highway Economic Development 

Projects.” US DOT, Highway Administration: Washington DC. 
12

• Providing improved local access to stimulate retail development; 

• Enhancing the flow of goods and services within a sub-regional trade area to 

increase induced economic benefits; 

• Facilitating the diversification of the local economy; and 

• Supporting new business initiatives. 

The recent surge in the recognition of transportation infrastructure as an economic development 

tool is not a rebirth of the “build and they will come” theory that led to many misaligned 

investments in the past. Instead, this shift is in response to input provided by potential developers 

and industry experts. The underlying concept is that a lack of transportation alternatives can 

retard economic development potential, as commerce tends to flow to those regions offering the 

broadest and most cost efficient options. For example, Appalachia stands to reap substantial 

economic gains from the increase in foreign trade, especially with Latin America. However, 

failure to invest in the transportation infrastructure necessary to maintain the Region’s 

competitive stance and its ability to connect with the global supply chain will result in lost 

economic and employment opportunities. 

Transportation Requirements of Commodities and Industrial Sectors in the ARC 

Although each sector and even firms within those sectors will have their own unique 

transportation requirements, these demands can be grouped into three broad categories:6

• Sectors which produce raw materials or bulky, low-market-value products with less 

emphasis on delivery time or reliability requirements; 

• Sectors which rely on JIT inventory systems and/or produce higher-market-value 

products with more time sensitive delivery and reliability requirements; and 

• Service industries, other than retail or wholesale trade, whose primary freight 

transportation requirement is overnight package delivery and are more concerned with 

access for their service fleet and the transportation of their customers and employees. 

Industries falling into the first category include agriculture, wood products, mining, construction, 

and traditional manufacturing. There are exceptions, such as perishable agricultural goods and 

 

6

 National Cooperative Highway Research Program report 421, “Economic Trends and Multimodal 

Transportation Requirements,” Transportation Research Board, Washington D.C., 1999. 
13

certain high priority construction and manufacturing materials. Transportation requirements for 

industries in this category are characterized by low cost, low speed, and low damage. Modes 

typically used include barge, truck, and rail, with only limited air service application. 

The second category would capture industries such as high tech manufacturing, as well as 

wholesale and retail trade. Transportation requirements for these industries include frequent, 

reliable, fast and innovative services. The most commonly used modes of transportation include 

air, truck, and high-speed intermodal rail. 

The final category is comprised primarily of service sector industries other than wholesale and 

retail trade. Transportation requirements for the services sector is characterized as time sensitive 

with direct human interaction, which demand frequent, reliable, fast and innovative services. The 

primary modes used by the service sectors are truck and air. 

The commodity flow analysis conducted for this study demonstrated the diversity of goods 

flowing through Appalachia. For example, bulk goods (coal and lumber), raw materials (food 

and pulp products), intermediate inputs (fabricated metals and chemicals) and finished products 

(electrical machinery and transportation equipment) are all within the top 20 commodity flows in 

the Region. This is not surprising, given that traditional industry clusters in Appalachia have 

included manufacturing such as textiles, wood products, and furniture. However, recent years 

have brought some changes, as some textiles have moved overseas, coal production stagnated, 

and automotive manufacturers and their suppliers migrated south. With this shift in industrial 

base, came new demands on Appalachia’s transportation system. The historic reliance on rail 

(driven primarily by the coal industry) has broadened to include a need for interstate quality 

highways to meet JIT demands of new manufacturers. 

As the economy of Appalachia continues to evolve, it will be essential to attract the industries of 

the “new economy.” The Region is already experiencing the dislocation of key furniture and 

automotive supplier industries. As a result, many states in the Region are turning their 

recruitment efforts to new industry clusters, including logistics and distribution services and high 

tech manufacturing. The transportation requirements of these industries go well beyond the need 
14

The industries of the 21st

century will require seamless 

intermodal connectivity with 

frequent and reliable 

deliveries. 

for highways. The industries of the 21st century will require 

seamless intermodal connectivity with frequent and reliable 

deliveries. The attraction of these new industrial clusters will 

hinge on Appalachia’s ability to meet their demanding and 

diverse transportation needs. 

The remainder of the study will examine opportunities and strategies for enhancing the region’s 

competitiveness through transportation efficiencies. Chapter 2 presents a commodity profile of 

the region, along with forecasts of future freight flows. The characteristics and capacity of the 

region’s intermodal resources are reviewed in Chapter 3. Finally, Chapter 4 provides conclusions 

and a comprehensive vision of future directions. In addition, case studies and an analysis of 

potential economic impacts of specific intermodal opportunities for Appalachia are provided 

under separate cover. 
15

CHAPTER 2 

FREIGHT FLOWS 

Introduction 

In order to assess the potential intermodal opportunities in Appalachia, a commodity flow profile 

was needed. This exercise is key in assessing the current status of freight transportation systems, 

identifying the full potential of the ADHS, understanding the commodity mix transiting the 

Appalachian Region, and highlighting specific opportunities and challenges. To gain such an 

understanding, a detailed analysis of current and future freight flows by commodity and mode 

was undertaken by the Study Team. The following sections within this chapter will detail the 

findings for highway, rail, and barge movements throughout Appalachia. 

The mix of commodities flowing into and out of a region has important implications for its 

transportation system. The ARC Region commodity flow data suggest that Appalachia relies 

heavily on the movement of bulk commodities, matching the industrial mix for the Region. 

Transportation characteristics for this commodity mix are low cost and low speed, requiring the 

use of truck, barge, and rail, with limited air service needs. As the following pages detail, 

Appalachia is very dependent on truck traffic. However, the data also tells a story about gaps in 

the existing transportation system. Most high value commodities, like those often used in high 

tech manufacturing (characterized by JIT production), rely on containerization and intermodal 

capabilities. The lack of these commodity types originating and terminating in Appalachia is a 

signal that the transportation system is inadequate to provide efficient movement of those goods; 

thus, hindering the Region’s ability to attract these higher end manufacturing industries. 

Additionally, as the Region’s coal industry faces unprecedented competition, creating more 

efficient transportation capabilities can help mitigate some of the competitive pressures from 

external coal sources. 

The ADHS represents a hallmark achievement that continues to contribute significantly to 

Appalachia’s development. The analysis of regional freight flows has revealed four fundamental 

roles for the ADHS in the 21st century. In summary: 
16

• The ADHS, in combination with other development efforts, can contribute to the 

improvement of economic conditions within Appalachia; 

• The ADHS provides an increasingly important set of alternative routings during periods 

of traffic congestion within or near the Region; 

• The ADHS provides redundancy that is essential to national security; and 

• The ADHS provides largely untapped opportunities to combine motor carriage with other 

freight modes in the creation of capacity/efficiency-building intermodal lanes. 

The following sections will detail current and forecasted freight flows within and through 

Appalachia by commodity and mode. 

Highway Freight Flows 

Methodology 

The primary data used in the analysis of motor carriage were derived from the Freight Analysis 

Framework (FAF) released by the US Department of Transportation’s Office of Freight 

Management in the fall of 2002. The FAF motor carrier data combine information from the U.S. 

Department of Commerce’s Commodity Flow Survey with proprietary data to produce county-tocounty freight flows. These flows are then aggregated to a state-to-state level to protect the 

confidentiality of shippers. It should be noted that there is concern regarding the use of FAF for 

analysis at the project level. Due to these concerns, the Transportation Research Board convened 

a special committee to conduct an evaluation on the potential shortcomings of the data. The 

results of that committee can be found at http://trb.org/publications/reports/fafltrfeb2004.pdf . 

Because the ARC Region is defined by county rather than state jurisdictional boundaries, one of 

the primary tasks of the current analysis was to reallocate the state-to-state flows to the county 

level. This was accomplished through a two-step process. First, the FAF data, provided on a twodigit Standard Transportation Commodity Code (STCC) level, were regressed on a variety of 

county specific explanatory variables. Next, the parameter estimates were used as weights in a 

proportional allocation algorithm that identified county specific freight flow profiles. 
17

Combined with the 

infrastructure necessary to 

handle the transshipment of 

containerized freight between 

modes, the region’s highway 

system could serve as a vital 

business attraction attribute to 

manufacturers operating in a 

reliability and time sensitive 

JIT environment. 

The FAF data also contain forecasted state-to-state flows for 2010 and 2020. These forecasts are 

based on forecasted employment in relevant industries for those years. The FAF forecasts were 

used as the basis for forecasting flows within the current analysis. The predicted state-to-state 

flows were used to generate ratios that were applied to the already allocated county-to-county 

data. 

Current and Future Truck Flows 

Commodities originating in the ARC Region are dominated by farm products, clay, concrete, 

glass, stone, food and kindred products in terms of total tonnage. While the growth in farm 

products is forecasted to be relatively stagnant (and actually decrease between 2010 and 2020), 

the growth in clay, concrete, glass and stone, lumber and wood products, and food and kindred 

products is predicted to be robust. Other significant commodities originating in the ARC Region 

in terms of weight (more than 100 million tons) include chemical, petroleum, and coal products. 

Notable is the fact that higher value goods, such as machinery and electrical equipment, are 

significantly less prevalent in the Region. This same pattern prevails for goods terminating in the 

Region. Current originating and terminating commodity flows for the Appalachian Region 

(based on the most recent data available) are summarized in Tables 2.1 and 2.2, respectively. 

Again, these bulk commodities tend to be relatively low in 

value and be less dependent on speed and reliability in terms 

of transportation needs. Importantly, the Region is capable of 

delivering excellent bulk commodity transportation 

alternatives, especially given the redundancy in trade routes 

offered by the ADHS and its rail and inland navigation 

counterparts. Combined with the infrastructure necessary to 

handle the transshipment of containerized freight between 

modes, Appalachia’s highway system could serve as a vital business attraction attribute to 

manufacturers operating in a reliability and time sensitive JIT environment. For example, 

Smyrna, Tennessee, located just outside the Region, is home to Nissan’s largest North American 

manufacturing facility. One of the keys to Nissan’s on-going expansion at that location is the 

ability to have direct access to excellent rail and highway services. At this location, Nissan is 
18

currently operating a JIT system that maintains a minimum of a 2-hour and a maximum of a 48-

hour parts supply inventory. 

Table 2.1 

Originating ARC Region Truck Tons 

(in millions) 

Commodity 

Estimated 

1998 

Traffic 

Estimated 

2010 

Traffic 

Estimated 

2020 

Traffic 

Clay, Concrete, Glass, and 

Stone 189.6 303.8 397.1 

Food & Kindred Products 131.0 190.3 291.4 

Lumber and Wood Products 129.5 195.7 252.4 

Petroleum or Coal Products 84.6 99.6 110.0 

Coal 83.4 106.3 116.6 

Chemicals 79.6 111.7 128.5 

Farm Products 74.1 81.9 78.3 

Primary Metal Products 74.1 102.3 114.7 

Pulp Paper Products 48.6 64.6 79.7 

Textile Mill Products 24.2 27.8 29.1 

Fabricated Metal Products 23.2 33.9 42.2 

Rubber and Plastics Products 21.5 31.5 40.0 

Transportation Equipment 21.4 30.8 36.7 

Furniture and Fixtures 8.7 12.8 15.5 

Electrical Machinery 8.1 13.3 16.5 

Machinery (Excl. Electrical) 7.2 15.4 24.7 

Printed Matter 4.2 5.6 8.2 

Apparel 2.7 4.1 4.9 
19

Table 2.2 

Terminating ARC Region Truck Tons 

(in millions) 

Commodity 

Estimated 

1998 

Traffic 

Estimated 

2010 

Traffic 

Estimated 

2020 

Traffic 

Clay, Concrete, Glass, Stone 195.03 309.90 403.10 

Farm Products 179.81 203.59 198.38 

Food & Kindred Products 165.69 238.99 364.17 

Lumber & Wood Products 122.23 184.55 236.84 

Petroleum or Coal Products 102.10 122.19 135.10 

Chemicals 100.21 142.92 161.81 

Primary Metal Products 74.64 102.12 114.67 

Pulp Paper Products 68.12 90.02 108.92 

Coal 51.61 65.81 72.18 

Transportation Equipment 28.09 37.99 44.08 

Fabricated Metal Products 26.21 37.62 46.90 

Rubber or Plastic Products 20.61 30.10 38.23 

Textile Mill Products 17.09 18.97 19.25 

Electrical Machinery 9.54 18.81 26.23 

Machinery (Excl. Electrical) 7.95 15.99 23.61 

Furniture or Fixtures 6.35 9.21 11.29 

Printed Matter 5.62 7.47 10.81 

Apparel 3.43 5.81 7.44 

Mapping commodity flows allows for the analysis of key trade lanes and the role of the ADHS. 

The maps reveal that a few ADHS segments already provide an important link for both northsouth and east-west trade lanes. For example, segments in Pennsylvania and Tennessee augment 

the east-west lanes while portions of the ADHS in Virginia are vital to that state’s north-south 

trade route. These graphical representations are not only very informative, they also allow for the 

identification of potential chokepoints in the system. Figure 2.1 illustrates current highway tons 

originating or terminating in the ARC Region and Figure 2.2 illustrates the forecasted highway 

tons for 2020. 
20

Figure 2.1 
21

Figure 2.2
22

Not surprising, intra-region traffic growth is predicted to be greatest in and around urban areas. 

For the largest urban areas, including metro Atlanta, Birmingham, Chattanooga, metro 

Cincinnati, Knoxville, and Pittsburgh, local truck traffic is expected to nearly double within the 

20 year forecast period. 

Data shows that this projected traffic growth is largely tied to local population growth and 

economic activity, rather than interstate and/or interregional commerce. Two inferences from the 

segment specific commodity flow data support this conclusion. First, county specific origin and 

destination segment data show that each of the 40 largest county and commodity specific flows 

(in terms of annual growth through 2020) is an intrastate flow. Indeed, twenty percent of the 

freight flows originating in the ARC Region have terminating points within the same county. 

The majority of these flows are between an ARC county and a proximal intrastate urban center. 

Also supporting the observation that local population growth and activity is driving Appalachian 

truck traffic is the identification of freight moving on the high-growth flows that are dominated 

by commodities that generally travel relatively short distances by truck. These are commodities 

such as clay and stone products, wood products, and coal. 

Highway Capacity Issues 

The FAF development process also yielded a readily usable source of data describing highway 

capacity on most major roadway segments. These data include measures of current and future 

volumes along with segment capacities and volume to capacity ratios. As volume-to-capacity 

ratios (VCR’s) approach 1.0, highway congestion becomes an issue. 

Data for rural and urban highway segments are summarized by state in Table 2.3. This summary 

includes 1998 (most recent data) and forecasted 2020 VCR averages and the number of miles 

with a VCR of greater than 0.80. 
23

Table 2.3 

Summary of Highway Segment Volume to Capacity Ratios in ARC Counties 

State 

Rural / 

Urban 

Average 

VCR, 

1998 

Average 

VCR, 

2020 

Miles 

Greater 

than 0.80 

Alabama RURAL 0.409 0.723 142 

 URBAN 0.587 0.927 154 

Georgia RURAL 0.414 0.686 96 

 URBAN 0.529 0.839 61 

Kentucky RURAL 0.371 0.639 87 

 URBAN 0.441 0.697 12 

Maryland RURAL 0.526 0.893 36 

 URBAN 0.653 1.089 14 

Mississippi RURAL 0.212 0.359 4 

 URBAN 0.256 0.411 2 

New York RURAL 0.250 0.403 0 

 URBAN 0.310 0.494 0 

North Carolina RURAL 0.476 0.864 107 

 URBAN 0.608 0.977 46 

Ohio RURAL 0.264 0.424 0 

 URBAN 0.343 0.542 10 

Pennsylvania RURAL 0.352 0.564 163 

 URBAN 0.470 0.730 62 

South Carolina RURAL 0.686 1.026 87 

 URBAN 0.533 0.809 17 

Tennessee RURAL 0.376 0.613 25 

 URBAN 0.502 0.793 77 

Virginia RURAL 0.431 0.739 48 

 URBAN 0.437 0.691 1 

West Virginia RURAL 0.296 0.516 13 

 URBAN 0.380 0.610 2 

 
24

Figure 2.3
25

Figure 2.4 
26

Analysis of the data suggests a situation within Appalachia that is completely consistent with 

what is observed nationally. Across America rural roadway segments are generally capable of 

handling both current and anticipated traffic volumes. The same is true of feeder systems in both 

rural and urban settings. Capacity constraints, where they are observed, occur most often on 

multi-lane expressways and more frequently in urban areas with a strong positive correlation 

between the proportion of truck traffic and the observed level of congestion. 

This pattern of congestion was initially observed in the 1960’s and has tended to accelerate as the 

cost and complexity of developing urban expressways has risen.7

 Within the ARC Region, the 

one possible exception to this general congestion pattern may be the Commonwealth of 

Pennsylvania, where actual or potential congestion is observed in both rural and urban areas. 

Within the current context, it should be noted that few ADHS segments are threatened by severe 

congestion constraints, now or in the future. To the contrary, most ADHS segments have 

medium to low VCR’s and, therefore, available capacity. Given that a number of ADHS routes 

parallel existing Interstate highways where congestion is either already evident or anticipated, 

these ADHS segments can provide relief capacity to those highway corridors facing congestion 

constraints. Thus, redundancy is a key role for the ADHS as trade within and through the region 

continues to grow. 

The relative capacity afforded by the ADHS becomes even more evident when pass-through 

traffic is added to the analysis. Projected ADHS traffic growth is relatively modest. However, 

traffic growth on other highway route segments – particularly Interstate highway segments – is 

predicted to be significant over the forecast period. A careful analysis of the regional highway 

route system yields a couple of key of strategies for ensuring that the capacity offered by the 

ADHS is more fully utilized. These include: 

 

7

 The rapidly increasing cost of constructing urban expressways is, to some degree linked to more stringent 

environmental controls. It is also the product of increasing land values and more vigorous zoning efforts. 

Interestingly, vehicle traffic per lane-mile has remained relatively constant on the lower density roadways that 

feed expressway systems. 
27

• Ensuring that ADHS segments are constructed to fully meet traditional Interstate 

highway design standards. In certain cases, ADHS links do not feature controlled access 

(interchanges, on/off-ramps). 

• Ensuring that grade and alignment of ADHS segments are as favorable to freight traffic 

as those found on the Interstate system. 

Summary of Highway Freight Movements 

The ADHS has been designed and constructed to stimulate and support economic development 

in historically isolated areas of Appalachia. Many of these routes would not have been built had 

they been judged by the traditional efficiency criteria used to justify highway construction. 

There are two important ways in which the ADHS can reach its full potential in supporting the 

transportation and economic needs of the Region. First, as noted above, a number of ADHS 

routes provide critical capacity, as other nearby highways begin to reach, and sometimes exceed, 

design capacity levels.8

 This will result in the diversion of traffic to ADHS segments and the 

growth of both traffic levels and access to commerce along these ADHS segments. To maximize 

such benefits, it may be necessary to upgrade specific ADHS route segments to more closely 

resemble Interstate design characteristics. In addition to capitalizing on its capacity, the ADHS 

also holds the potential to more fully integrate with the Region’s railway, water, and aviation 

modes in a way to build a stronger and more dynamic link between Appalachia and the global 

marketplace of the 21st century. Such intermodal opportunities are more fully assessed in the 

case studies. 

 

8 Specifically, ADHS inclusive routings could provide much needed relief to I-70, I-75, and I-81.
28

Railroad Freight Flows 

Methodology 

The primary data source for the current analysis of rail transportation to, from, and within the 

ARC Region is the Surface Transportation Boards Carload Waybill Sample (CWS). CWS 

records for ARC region movements provide state-to-state annual tonnage by commodity type. 

Unlike the treatment of truck traffic, these depictions reflect both originating and pass through 

traffic. This variance in methodology reflects the sensitivity of rail route selection to traffic 

levels. Any attempt to route only Appalachian traffic over the railroad networks would generate 

routings that are not observed in practice.9

Current and Future Rail Flows 

CWS data illustrate that Appalachian rail traffic is dominated by the movement of coal. The 

Region’s coal is generally moved to one of three destinations (1) barge transload facilities on the 

Ohio River, Big Sandy River, or Kanawha River; (2) directly to utility or commercial users; or 

(3) to Virginia ports for international export. Railroad shipments of coal have diminished 

measurably over the past three years, particularly the movement of export coal. For example, 

Norfolk Southern export movements reached a high of more than 25 million tons per year in the 

late 1990’s. For 2002, the same total was less than 10 million tons. The loss of export coal is the 

direct result of new productive capacity in Colombia, South Africa, and Australia. The FAF 

values used to predict future rail movements of coal suggest strong growth in coal volumes over 

the coming two decades. It is possible, however, that these forecasted values were generated in 

advance of the new competing capacity elsewhere. 

Appalachian regional rail volumes and forecasts are summarized below in Table 2.4 and Table 

2.5, by originating traffic and terminating traffic respectively. 

 

9

 Rail traffic was routing through the use of RAILNET, a software product developed by Dr. David Clarke, 

Clemson University. Because, the software routes traffic based on a cost minimization process, it can be used 

to simulate the effects of infrastructure modifications. 
29

Table 2.4 

Rail Traffic Originating in ARC Counties 

Commodity 

1998 

Tonnage 

2010 

Tonnage 

2020 

Tonnage 

Estimated 

Total 

Growth 

Coal 284,124,490 346,503,752 371,343,758 87,219,268 

Primary Metal Prod. 12,063,237 16,690,650 18,873,073 6,809,836 

Non-Metallic Minerals 10,646,781 13,119,816 13,937,011 3,290,230 

Chemicals 8,642,576 11,644,988 13,103,480 4,460,904 

Petroleum Prod. 8,508,121 9,656,502 10,142,437 1,634,316 

Clay, Concrete, Glass, Stone 8,364,724 13,949,417 18,667,431 10,302,707 

Lumber & Wood Prod. 6,070,160 8,804,107 11,092,277 5,022,117 

Pulp & Paper Prod. 3,651,904 4,969,460 6,358,220 2,706,316 

Scrap Materials 3,352,960 4,945,413 5,395,343 2,042,383 

Metallic Ore 2,775,872 2,217,619 2,132,885 -642,987 

Food & Kindred Prod. 2,771,356 4,027,069 6,141,193 3,369,837 

Transportation Equipment 1,425,000 1,968,002 2,307,459 882,459 

Farm Products 1,348,696 1,683,101 1,883,399 534,703 

Mixed Shipments 961,360 1,395,964 1,779,341 817,981 

Electronic Equipment 92,120 109,739 115,685 23,565 

Mail or Express 63,800 93,872 117,478 53,678 

Rubber & Plastic Prod. 60,080 83,459 105,347 45,267 

Fabricated Metal Prod 52,796 62,358 70,017 17,221 

Crude Petroleum 44,226 36,619 47,024 2,798 

Misc. Freight Shipments 41,812 49,516 41,693 -119 

Furniture or Fixtures 28,720 45,124 59,719 30,999 

Misc. Manufactured Prod. 22,720 35,827 47,908 25,188 

Freight Forwarder Traffic 18,680 26,720 28,086 9,406 

Instruments 2,040 2,822 3,782 1,742 

 
30

Table 2.5 

Rail Traffic Terminating in ARC Counties 

Commodity 

1998 

Tonnage 

2010 

Tonnage 

2020 

Tonnage 

Estimated 

Total 

Growth 

Coal 106,776,751 131,631,928 142,262,703 35,485,952 

Metallic Ore 16,101,735 13,392,738 12,315,593 -3,786,142 

Chemicals 14,734,830 20,310,423 22,839,562 8,104,732 

Farm Products 10,952,813 13,591,586 14,549,263 3,596,450 

Primary Metal Prod. 9,833,579 13,639,278 15,454,890 5,621,311 

Scrap Materials 6,219,577 9,154,715 9,962,821 3,743,244 

Clay, Concrete, Glass, Stone 5,523,426 8,852,300 11,583,608 6,060,182 

Petroleum Prod. 5,476,703 6,383,725 6,894,590 1,417,887 

Non-Metallic Minerals 5,376,092 6,485,156 6,615,095 1,239,003 

Food & Kindred Prod. 4,910,108 7,081,410 10,571,650 5,661,542 

Lumber & Wood Prod. 4,677,676 6,326,148 7,708,665 3,030,989 

Pulp & Paper Prod. 3,522,540 4,447,276 5,330,913 1,808,373 

Transportation Equipment 1,666,416 2,130,109 2,379,941 713,525 

Mixed Shipments 734,040 1,055,093 1,343,214 609,174 

Crude Petroleum 250,206 198,697 254,229 4,023 

Misc. Freight Shipments 68,344 88,233 74,228 5,884 

Forest Products 43,148 50,112 51,972 8,824 

Mail or Express 29,480 47,989 66,011 36,531 

Fabricated Metal Prod 28,504 32,840 37,431 8,927 

Electronic Equipment 24,600 44,417 59,809 35,209 

Misc. Manufactured Prod. 21,960 26,820 36,183 14,223 

Machinery 6,760 6,973 7,150 390 

Rubber & Plastic Prod. 6,400 5,454 6,588 188 

Freight Forwarder Traffic 5,080 8,866 10,101 5,021 

Small Package Freight 2,400 5,701 6,779 4,379 

Furniture or Fixtures 2,160 3,529 4,838 2,678 

The vast majority of the Region’s non-coal rail traffic is originating or destined for the major 

urban centers of Birmingham, Chattanooga, Knoxville, and Pittsburgh. There is a modest amount 

of steel related rail traffic in eastern Ohio and in West Virginia’s northern panhandle. 

Additionally, there is a moderate amount of chemical traffic in and out of the Charleston, West 

Virginia area. However, most rural shippers of non-coal commodities are moving very small 

annual volumes. Figure 2.5 and Figure 2.6 graphically depict total rail flows (origin and 

destination) within the ARC Region for 1998 and 2018, respectively. 
31

Figure 2.5 

Originating and Terminating 1998 Rail Traffic

0 90 180 270

Miles

1998 Railroad Flows

0 to 1000000 GT

1000000 to 5000000 GT

5000000 to 10000000 GT

10000000 to 20000000 GT

20000000 to 30000000 GT

30000000 to 50000000 GT

50000000 to 100000000 GT

> 100000000 GT
32

Figure 2.6 

Originating and Terminating 2018 Rail Traffic

0 90 180 270

Miles

2018 Railroad Flows

0 to 1000000 GT

1000000 to 5000000 GT

5000000 to 10000000 GT

10000000 to 20000000 GT

20000000 to 30000000 GT

30000000 to 50000000 GT

50000000 to 100000000 GT

> 100000000 GT
33

There are only three intermodal trailer/container facilities within the ARC Region. These are 

located in Birmingham, Huntsville, and Pittsburgh. There are also five additional facilities 

located very near the Region’s boundaries, in Atlanta, Cincinnati, Columbus, Front Royal, and 

Harrisburg. A number of relevant intermodal terminals are depicted in Figure 2.7. With such 

limited intermodal access, most containers moving between the region and East Coast and Gulf 

Coast ports are conveyed, out of necessity, by truck. 

Figure 2.7 

Existing Intermodal Terminals and Service Areas and the ADHS 
34

Railroad Capacity Issues 

The Appalachian Region is widely served by two Class I rail carriers, CSX Transportation 

(CSXT) and Norfolk Southern (NS). Two additional Class I carriers, Burlington Northern – 

Santa Fe and Canadian Pacific, provide service to geographically limited areas within the 

Region. Finally, regional rail carriers including Wheeling & Lake Erie and Kansas City 

Southern, and a number of short-line railroads provide key rail access to many of the region’s 

smaller communities. 

It should be emphasized that, in all but a few instances, railway capacities could be increased by 

adding sidings, upgrading signaling systems, or otherwise modifying the physical infrastructure. 

It is also worth noting, however, that the generally more severe grades and track alignments 

make railroad operations more expensive in Appalachia than in other non-mountainous regions. 

Summary of Rail Freight Flows 

Because the movement of coal dominates current regional traffic and because the 

competitiveness of Appalachian coal appears to be in transition, any assessment regarding the 

adequacy of the ARC Region’s rail service is relatively speculative. Under current traffic 

volumes, the Region’s rail facilities are adequate, but offer no real surplus capacity to 

accommodate growth, either in regional or bridge-traffic movements. If coal volumes decline in 

the future, current available rail capacity levels may expand. Under such a scenario, the Region’s 

rail carriers might move to develop new and alternative traffic sources, as is happening 

elsewhere in America, or they may simply choose to abandon their newly found capacity. In 

certain areas there is the potential of using rail capacity to relieve highway congestion via truck 

to rail diversion. In addition, the excess capacity could be used to support commuter rail service 

in and near the Region’s urban centers. Importantly, Appalachia’s railway resources represent a 

powerful asset, as the Region searches for opportunities to retain existing commerce and attract 

new economic activity in the years ahead. 

Commercial Navigation Freight Flows 
35

Methodology 

The primary data source for the current analysis of commercial navigation is the Army Corps of 

Engineers’ Waterborne Commerce Statistical Center (WCSC) in New Orleans. WCSC data were 

then supplemented with data from the Corps’ Lock Performance Monitoring System (LPMS) and 

with data obtained from the Tennessee Valley Authority (TVA). 

The WCSC data describe individual barge movements. These are typically aggregated by 

commodity and origin-destination dock pair for purposes of analysis. However, even at the most 

disaggregated level, the WCSC data do not contain information describing any associated 

landside movement. Any information regarding rail or truck movements to or from the river 

must be developed separately. In the case of rail, this is not difficult. However, identifying bargerelated truck movements is challenging. 

Current and Future Barge Flows 

As with rail movements in Appalachia, coal dominates waterborne commerce. Still, there are 

significant volumes of petroleum products and steel-related commodities (both raw and finished) 

moving by barge within the Region. Annual tons for 2001 ARC Region waterborne commodities 

are summarized in Table 2.6 and Table 2.7 by origination and termination respectively. 

Figure 2.6 

Commodity Barge Traffic Originating in ARC Counties 

2001 

Tonnage 

Coal 109,509,281

Petroleum Products 9,156,161 

Metallic Ores 7,366,178 

All Other Commodities 6,447,293 

Primary Metal Products 2,789,672 

Chemicals 1,449,431 

Non-Metallic Minerals 471,789 

Farm Products 459,847 

TOTAL 137,649,652

 
36

Table 2.7 

Barge Traffic Terminating in ARC Counties 

Unlike truck and rail, barge movements tend to both originate and terminate wholly within the 

ARC Region. In fact, many of the largest Origin and Destination-commodity triplets (i.e. 

shipments paired by origin and destination by commodity type) represent intrastate movements 

of coal or petroleum products. This outcome is consistent with more generalized Ohio River 

basin traffic where average shipment distances are approximately 250 miles. Waterborne freight 

flows are depicted graphically in Figure 2.8. 

Commodity 

2001 

Tonnage 

Coal 80,191,486 

Metallic Ores 13,637,986 

Primary Metal Products 9,899,697 

All Other Commodities 9,493,062 

Petroleum Products 5,064,488 

Chemicals 4,873,543 

Non-Metallic Minerals 4,650,968 

Farm Products 2,549,904 

TOTAL 130,361,134

 
37

Figure 2.8 

Commercial Navigation Traffic

Indiana

Ohio

Pennsylvania

New York

Virginia

North Carolina

South 

Carolina

Georgia

Alabama

Mississippi

Tennessee

Kentucky

West 

Virginia

Illinois

Missouri

Arkansas

Maryland

ARC Region

Unclassified waterway

Annual Tonnage

0 - 1.5 million tons

1.6 - 10 million tons

11 - 20 million tons

21 - 50 million tons

51 - 100 million tons

0 100 200 300 400 Miles

The Study Team did not forecast future changes in in-region barge traffic. Traffic growth within 

the Ohio basin is relatively stagnant. Traffic on the Ohio main stem grew at only 0.8% between 

1990 and 2000, while traffic on the overall Ohio System (including the Tennessee River) grew at 

only 0.9% over the same period.10 However, innovative uses of barge movements, such as 

container-on-barge (COB), could enhance this outlook. For example, the Port of Baton Rouge 

has experienced significant success with COB operations and has partnered with the Port of 

Houston and the Port of New Orleans to expand its current operations. Similar COB 

opportunities may lie in the ARC Region, as well. 

 

10 See Great Lakes and Ohio River Navigation Systems Commerce Report, 2002, US Army Corps of Engineers, 

Great Lakes and Ohio River Division. 
38

Waterborne Capacity Issues 

The majority of the locks on the Ohio River have 1,200 foot main chambers that allow a 15-

barge tow and boat to be processed in a single lockage. This is not, however, true of the upper 

three locks near Pittsburgh or on most tributaries. Accordingly, for shipments bound to or from 

the upper Ohio or system tributaries, tows must be fleeted to smaller sizes or broken apart for 

lockage. Currently, the Corps of Engineers is undertaking a number of projects to expand mainstem Ohio River capacity and improve system reliability. However, given predicted traffic 

levels, infrastructure improvements on tributaries are unlikely.11 

Summary of Barge Freight Flows 

Inland navigation is an important transportation asset to the ARC region. Today, the extent of 

this importance is closely related to Appalachia’s strong association with coal. Thus, as fuel 

markets continue to evolve, the role of inland navigation is likely to change as well. The viability 

and prosperity of Appalachia’s barge industry, like most businesses, will hinge on its ability to 

take advantage of the changing commodity mix flowing within and throughout the Region and 

the logistic trends that dictate how those commodities flow. In consideration of the predicted 

growth of both truck and rail transportation, combined with the often prohibitive cost of 

expanding modal capacities, the Region’s extensive inland navigation network presents 

opportunities to expand capacity and provide more diversified and cost effective services to 

Appalachia in the years ahead. 

 

11 The two exceptions to this prediction are both on the Tennessee River. Strong consideration is being given to 

the expansion of Kentucky lock near the confluence of the Tennessee and Ohio Rivers. Also, Chicamauga Lock 

may be replaced in order to provide continued navigation on the upper Tennessee River. In the case of 

Kentucky Lock, projected traffic growth is largely tied to TVA’s projected increase in its use of Powder River 

coal. The lock replacement at Chicamauga is related to the structural integrity of the existing structure.
39

CHAPTER 3 

INTERMODAL TRANSPORTATION AND OPPORTUNITIES 

Current Status 

Technically, “intermodal” transportation refers to any service where two or more modes are 

combined to facilitate a single movement of either freight or passengers. Accordingly, one might 

view the massive regional truck/barge and rail/barge movements of coal as intermodal in nature. 

Under such an interpretation, Appalachia could be viewed as a national leader in intermodal 

transportation coordination. For the purposes of this study, “intermodal” will refer to the 

coordinated, multi-modal movement of truck trailers or shipping containers over the region’s 

highway, rail, and waterway systems. From the foregoing point of view, the ARC Region suffers 

from very limited intermodal capabilities, resulting in increased transportation costs and a loss of 

competitive edge for the Region’s business interests. 

In 1999, Wilbur Smith Associates, under the direction of ARC, conducted an analysis of the 

intermodal transportation system in Appalachia. While the ADHS and the Region’s interstate 

system have been well documented, little was known about the Region’s other transportation 

infrastructure. Several key findings resulted from that effort including: 

Highways 

• The combined interstate/ADHS highway network provides freight and passenger 

access, intermodal linkage, and mobility for Appalachia. 

• Highways play an important role in moving Appalachian natural resources, crops and 

finished goods to intermodal terminals. 

• Highways, especially the ADHS, have offered a strong contribution to economic 

success in Appalachia. 

Railroads 

• Railroads are critical to moving important Appalachian products in both domestic and 

international trade. 

• Rail access to deepwater ocean ports is critical to provide the ability for Appalachia to 

compete and succeed in the global marketplace. 
40

• Short line railroads play an important role in the economic vitality of rural 

Appalachia, but have serious physical/financial needs. 

• There are few intermodal rail yards in and near Appalachia, restricting business 

access to containerized cargo. 

Airports 

• Commercial air service within Appalachia is thin; however, areas with the highest 

population densities are well-served by several major commercial airports located just 

outside the boundary of the region. 

• The ADHS and Interstate highways offer good airport access. 

• Smaller communities continue to press for commercial service; however, national 

trends show such airports often suffer from extremely high airfares. In addition, many 

smaller airports face an uncertain future, in terms of continued commercial air service 

availability. 

• Businesses depend on private aircraft to transport executives and important cargoes to 

small communities. Such general aviation airport access enables plants to operate 24-

hours a day, thereby facilitating expansion of existing business and the attraction of 

new investment into small communities. 

Marine Terminals 

• Ocean ports carry high volumes of Appalachian goods and products. 

• Highway and rail linkages to ocean ports have improved, yet containerized 

intermodal highway/rail links remain weak. 

• Inland water ports are major intermodal facilities that move large volumes of the 

region’s products to and from other inland destinations, as well as international 

destinations through partnerships with major ocean marine terminals. 
41

Identifying Potential Intermodal Opportunities 

Intermodal Rail 

There are two principal reasons for the relative paucity of truck/railway intermodal combinations 

within the region. First, overall traffic volumes outside of urban areas have been modest, which 

has served to retard the development of intermodal trans-load facilities. Second, many of the 

region’s urban centers, such as Pittsburgh, Knoxville, Chattanooga, and Birmingham, have 

historically relied on trucking to move containers to and from major Atlantic and Gulf ports due 

to cost and reliability advantages. However, as highways become increasingly congested and as 

operational issues such as driver shortages, insurance, and fuel costs, combine to drive up 

trucking costs, the economic attractiveness of the region’s rail services is expected to grow, as 

Appalachian businesses strive to sharpen their competitive edge. 

As observed in Chapter 2, while limited, there are in-region intermodal truck/rail trans-load 

facilities in Birmingham, Huntsville, and Pittsburgh, as well as nearby facilities in Atlanta, 

Cincinnati, Columbus, Front Royal, and Harrisburg. With the exception of the inland ports 

located in Front Royal and Huntsville, these facilities are owned by the Class I railroads that 

serve them (CSXT, NS, and BNSF). Within the region, the economics of intermodal drayage 

often vary, depending on highway configurations, patterns of highway congestion, and the 

availability of back-haul cargo. Generally, however, only shippers within approximately 50 

highway miles of a trans-load facility can receive the economic benefits of “local” drayage 

service. Shippers at greater distances face transportation charges that are, to varying degrees, 

higher, making it more difficult for such businesses to compete. Figure 2.9 depicts the estimated 

local drayage areas for existing intermodal truck/rail facilities relative to the ADHS. Within the 

ARC Region, the I-20 and I-70 corridors have limited access to local drayage service. 

Throughout the remainder of the Region, such access is virtually nonexistent. The volumes of 

truck traffic and the volume-to-capacity ratios displayed in Figures 2.1 – 2.3 indicate that the 

proposed Trans-Tennessee Railroad could enhance transportation efficiencies along the crucial 

east-west I-40 trade lane. Likewise, the double-stack initiative between the Norfolk, Virginia and 

Columbus, Ohio offers the potential to establish important new intermodal access in the very 

heart of central Appalachia. 
42

Inland Ports and Potential New Facilities 

The use of containers in international traffic has generated a tremendous growth in container 

movement through U.S. ports. Indeed, the Association of American Railroads estimates that total 

railroad container traffic has grown at an average rate of 8.6% per year between 1988 and 2000, 

with most of this growth attributable to international traffic. Reflecting this transition, intermodal 

has now surpassed coal as the largest single revenue source for America’s railroad industry, 

demonstrating how rail is becoming an increasingly important link within the global supply 

chain. 

The growth of container traffic has badly stressed many U.S. ocean ports and has lead to 

increased delays and costs associated with port processing times. As one solution to port 

congestion, many advocate the development of “inland” ports. Under the inland port scenario, 

containers are transferred directly (with only minimal delay) between ocean port facilities and 

satellite inland locations, where the containers are then processed and prepared for transshipment to and from other locations. Currently, there is a successful inland port facility at Front 

Royal, Virginia that was developed by the Virginia Port Authority as a satellite to its traditional 

marine terminals in the Norfolk/Newport News area. To the north, the Port Authority of New 

York/New Jersey has recently launched a Hudson River barge-served inland port in Albany, 

New York and is working to establish a broader, regional network of inland satellite ports 

elsewhere throughout their region. 

As the inland port at Front Royal demonstrates, it is not necessary that such facilities be located 

in urban areas with large local populations. In fact, rural locations may offer important 

advantages. First, the lack of local roadway congestion reduces overall transportation times and 

costs. In addition, affordable land is often available, making initial construction and future 

expansion highly attractive. While these inland ports improve transportation efficiencies, they 

also serve as economic magnets, drawing commerce to the surrounding region. In consideration 

of the success of those “inland” facilities already established and of those now being planned for 

development, these intermodal facilities should be viewed as opportunities to link with the 

ADHS network in a way to create important new transportation and economic benefits for 
43

Appalachia.12 Interestingly, the growing reverse land bridge concept in container transportation 

also promotes the development of inland ports. The South Carolina Inland Port concept has 

recently been studied by the state and presents Appalachia with an opportunity to take greater 

economic advantage of the Port of Charleston, which is a growing gateway for global commerce. 

In addition, the current study indicates that the proposed Prichard, West Virginia Inland Port 

offers the potential to introduce new intermodal access to the very heart of Appalachia. Finally, 

another approach to inland port development demonstrates how global air cargo can be 

integrated into the intermodal mix. One of the nation’s best examples of this concept is located at 

Huntsville International Airport in Huntsville, Alabama. This mixed-use complex is comprised 

of the Huntsville International Airport (HSV), the International Intermodal Center (IIC), and the 

Jetplex Industrial Park. Huntsville International Airport, in conjunction with the IIC, provides the 

Port of Huntsville with comprehensive aviation, rail, highway, and maritime connections, 

including key ocean port links to and from Gulf, Atlantic, and Pacific coasts. The Port of 

Huntsville offers an excellent example of how Appalachia can diversify and strengthen its 

economic base through improved links with the global supply chain of the 21st century. 

Container on Barge (COB) 

Should container on barge service emerge along the Region’s inland waterway system, the 

ADHS and the Region’s railways can serve as important new links to and from inland water 

terminals.13 Efforts to launch these new intermodal services are already underway in Pittsburgh, 

Pennsylvania and at several other locations within the ARC Region. 

Strategic Intermodal Opportunities in the ARC Region 

The geographic location of Appalachia, combined with the continued densification of both northsouth and east-west trade lanes, positions the Region to become a land bridge by providing 

 

12 For example, the proposed intermodal facility at Prichard, West Virginia would likely rely measurably using 

Corridor B. See, Central Corridor Double-Stack Initiative: Final Report, Rahall Transportation Institute, Marshall 

University, March 2003. 

13 Two important factors may contribute to the future commercial viability of limited container-on-barge 

operations. First, as noted, increased globalization is taxing the nation’s ability to handle container traffic over 

existing ports. This may result in the use of barges for shuttle movements to inland ports – much as is being 

done between the Port of New York – New Jersey and the satellite port at Albany, New York. Second, 

increased globalization is leading to the use of container shipping for lowered valued commodities that are not 

as time sensitive has more highly valued goods. Thus, it may be possible to use barge transport in more 

extensive line-haul movements of containers containing less valuable commodities. 
44

intermodal freight movements into the nation’s hinterlands. The commodity flow analysis and 

forecasts, combined with an inventory of the Region’s existing intermodal facilities revealed 

numerous intermodal opportunities. The study team identified seven of these opportunities to 

profile in more detail using case studies. The opportunities include projects that are in various 

stages of development – ranging from full implementation to early conceptual stages, yet all are 

designed to create important new transportation and economic development benefits. Various 

types of opportunities, including intermodal rail, container-on-barge, and inland ports were 

included in the case studies. It is important to note that the chosen case studies do not represent 

all of the intermodal opportunities in the region, but are meant to serve as a sampling of how 

transportation-related investment can help to ensure Appalachia’s economic health in the 21st

century. The strategic opportunities selected for additional examination include the: 

• Trans-Tennessee Railroad: The Trans-Tennessee Railroad calls for the completion of a 

freight rail corridor connecting Knoxville to Memphis via Nashville. The plan would 

create a seamless rail corridor between the three cities, paralleling I-40 through the center 

of the state. 

• Central Corridor Doublestack Initiative (Heartland Corridor): Creating doublestack 

container capability along the Norfolk Southern (NS) rail corridor through the heart of 

the Appalachian Region (connecting the Region to Columbus, Ohio and Norfolk, 

Virginia) will require a substantial investment to the railroad’s infrastructure. Such an 

investment will strengthen the Region’s transportation infrastructure and better connect 

area businesses to the global marketplace. 

• Virginia Inland Port: The objective of an inland port is twofold; alleviate container and 

associated traffic congestion around a given seaport and move transportation and 

distribution infrastructure closer to inland commerce. This concept has been successfully 

achieved at the Virginia Inland Port (VIP). The 161-acre VIP, located 70 miles west of 

Washington DC in Front Royal, Virginia, effectively brings the Atlantic marine terminals 

of Norfolk and Newport News 220 miles inland, to the very doorstep of Appalachia. 

• South Carolina Inland Port: The primary objective of a South Carolina Inland Port 

(SCIP) would be to alleviate congestion at the Port of Charleston and to assist in 

accommodating future (container throughput) growth. As the Port of Charleston has 
45

developed, several issues regarding traffic congestion and safety, port expansion, 

compatible land-use, and environmental impact have clouded the Port’s growth potential. 

• Port of Huntsville: The Port of Huntsville is an inland port comprised of Huntsville 

International Airport (HSV), the International Intermodal Center (IIC) and the Jetplex 

Industrial Park. Huntsville International Airport, in conjunction with the IIC, provides 

Appalachia with exceptional air, rail, roadway and maritime connections to the world. 

• Port of Pittsburgh, Container-on-Barge: The Port of Pittsburgh container-on-barge 

(COB) waterway network embraces the concept of containerized transport of 

commodities via flat deck barge. Currently, commodities transported by barge tend to be 

low value, bulk goods. However, the use of container barges (flat deck), capable of 

carrying large numbers of containers and being loaded and unloaded quickly at port, has 

the potential to change the dynamics of barge transport and bring new competitive 

advantages to area businesses. 

• Erie Cross-Lake Ferry: The Erie to Nanticoke Freight Ferry will provide scheduled, 

containerized waterborne freight service between the Port of Erie in northern 

Pennsylvania and Nanticoke in southern Ontario, Canada. The concept is designed to take 

advantage of increasing trade and associated commodity flow between Canada and the 

United States and establish Erie as a new gateway for international trade. 

More detailed descriptions and assessments of these opportunities are provided under separate 

cover in the Case Studies section of the report. 
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47

CHAPTER 4 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS 

As has occurred throughout the history of Appalachia, powerful forces are continually reshaping 

and restructuring the Region’s economic profile and vitality. Globalization is also producing 

changes in the types and volume of goods moving to, from, and across the region, which has 

been confirmed through the commodity flow analysis conducted within this research 

undertaking. Through identifying and understanding these trends, Appalachia is better able to 

anticipate change and position itself to become more competitive and more economically 

successful as it moves into the 21st century. 

The commodity flow analysis demonstrated the diversity of goods flowing through the Region. 

For example, bulk goods (coal and lumber), raw materials (food and pulp products), intermediate 

inputs (fabricated metals and chemicals) and finished products (electrical machinery and 

transportation equipment) are all within the top 20 commodity flows in the ARC Region. This 

diversity of products, each feeding a different stage of production, requires an equally diverse 

transportation system, ranging from air cargo to rail to truck to barge. Ensuring efficient and 

seamless connections between these modes is essential to maintaining a competitive advantage 

for the region. 

In communities such as Huntsville, Alabama and Front Royal, Virginia, we have witnessed how 

carefully planned, proactive investments in transportation infrastructure can enhance the 

capacity, efficiency, and responsiveness of the transportation network, while at the same time 

help retain existing businesses and attract new enterprise. 

Finally, the analysis confirms the value of the region’s full spectrum of transportation resources 

and capabilities, including a comprehensive 30,000-mile network of ADHS and interstate 

highways, railways, and inland navigation services and its 272 public use airports. Importantly, 

the analysis highlights opportunities to far more effectively coordinate and interconnect these 

important resources in a way to better capture their full economic development and employment 

potential for the region. 
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Findings 

Through carefully researching economic, commodity flow, and transportation trends affecting 

Appalachia, important findings have been identified. These include: 

• The emergence of global trade is expanding and diversifying commodity flows within 

and across the Appalachian Region. 

• Major East-West (Asia and Europe) and North-South (Canada and Latin America) trade 

lanes now criss-cross the Region. 

• Commodity flow patterns and trade lanes are regional in nature, extending between 

multi-jurisdictional boundaries. 

• Foreign Direct Investment (FDI) has grown ten fold in the past 20 years and is 

contributing to increased commodity flows to, from, and across Appalachia. 

• Diversity within the economy requires diverse transportation capabilities. 

• Global and domestic commodities increasingly rely on containerization. 

• The containerized supply chain is built around seamless, intermodal transportation, 

featuring high speed, high efficiency, and highly responsive customer service. 

• The growth of commodity volumes is beginning to strain transport capacity levels, 

particularly at trade gateways on the Atlantic seaboard. 

• Congestion increases costs, decreases efficiency and reliability, and constrains the 

competitive advantage of business. 

• Appalachia enjoys a strong and diverse network of transportation resources, including 

highways, railways, inland navigation, and airports, which can play a vital role in 

relieving congestion at trade gateways and creating new economic opportunity in the 

Region. 

• Appalachia transportation assets are poorly coordinated and interconnected. Limited 

intermodal access to and from major seaports constrains foreign trade potential for 

Appalachian businesses. 

• National and regional transportation capacity, efficiency, and responsiveness can be 

enhanced through expanding intermodal links between the ADHS and the Region’s rail, 

inland navigation, and aviation modes. 

• Such links offer innovative opportunities for public/private partnerships. 
49

• The transportation capacity, efficiency, and responsiveness offered by the ADHS and its 

intermodal linkages can attract new commerce and jobs into the region, as congestion 

increasingly chokes off alternative routings in other areas. 

• As commodity flows increase in volume and diversity, proactive transportation 

investments are demonstrating their potential to attract commerce and employment. 

• A comprehensive, region-wide transportation system is essential to economic success and 

offers important security, safety, environmental, and quality of life benefits. 

Emerging from these findings is a set of conclusions and recommendations that can help 

Appalachia position itself for success in the 21st century. Rather than looking to the past, these 

approaches are proactive in nature and are focused at both retaining existing businesses and at 

stimulating new commercial opportunities in the region. The recommendations and conclusions 

are intermodal by design and call for establishing a closer and more integrated relationship 

between the Region’s transportation and economic development interests. 

Conclusions and Recommendations

• Search out and identify institutional mechanisms to more effectively develop regional 

transport initiatives that extend across traditional jurisdictional boundaries. 

• Intensify the interaction and cooperation between economic development and 

transportation interests. 

• Facilitate expanded public/private partnerships and focus on opportunities to better 

achieve the full economic potential of transportation investments. 

• Optimize the capacity, efficiency, and responsiveness of the Region’s transportation 

resources and actively apply these assets to attract new commercial and employment 

opportunities into Appalachia. 

• Continually track economic and commodity flow trends to anticipate and position for 

change. 

• Establish a Region-wide process to identify and develop improved intermodal links 

between the ADHS and Appalachia’s rail, water, and aviation modes. 
50

• Seek out opportunities to better utilize advanced information, communication, and 

security technology to enhance the Region’s transportation efficiency and expand its 

potential to attract new commercial and employment opportunities. 

• Develop a collaborative approach to more actively advocate for the region’s individual 

and collective transportation resources, so as to assure that Appalachia will enjoy full 

access to opportunity in the 21st century. 

Appalachia is a region that in the 20th century experienced the stark economic and human 

consequences of isolation. As the region moves into a new century, the freedom of access that its 

transportation system will be called upon to provide will be critical to the businesses, 

communities, and people of Appalachia. In the 21st century, the globalization of trade and desire 

to broaden and diversify the region’s economic base will demand fast, diverse, and efficient 

access to opportunity.