Copyright © 2014 Albuquerque Journal
SANTA TERESA – The trains are rolling at New Mexico’s newest rail hub.
Union Pacific Corp. on Tuesday celebrated a “soft” opening of its massive freight facility in Santa Teresa, where it is ramping up operations over the next two months before a grand opening May 28. While painters put the finishing touches on buildings, the first trucks and trains loaded with commercial cargo began coming and going.
The launch of operations here represents the culmination of an infrastructure investment by Union Pacific of more than $400 million since 2011 – all private investment by the company – well ahead of schedule.
“It’s like spring training for us,” said Union Pacific spokeswoman Zoe Richmond.
Work buzzed around the 2,200-acre facility – about half of which is being used, Richmond said, with another half available for future expansions – situated on an 11-by-2 mile tract of desert near the Mexican border. The railroad is in the process of shifting many of its operations from El Paso to this much larger hub for refueling locomotives, changing crews and shifting goods from truck to rail and vice versa.
The new site offers “exponential” capacity growth, Richmond said.
Two tracks heading east and west splay into seven tracks for fueling, oil changes and inspections. In an adjacent area of the sprawling hub, a long train rested while cranes lifted containers from semi-trailer trucks onto the rail cars.
Kevin Garcia, Union Pacific director of road operations, said things were “going very well” on the first day.
With the railroad quickly ramping up operations, ancillary businesses have followed. Among the newest arrivals to Santa Teresa is Twin Cities Services, which provides logistics services to businesses transporting containers from truck to rail to ship.
“Our decision to move is based on our clientele,” said Ed Hazelton, who is in the processing of transferring his Twin Cities operations, including 17 employees, to Santa Teresa from El Paso. “They want to be by the railroad.”
Union Pacific’s opening represents a major step toward making Santa Teresa “the inland port of choice in the Americas,” said Jon Barela, secretary of the state Economic Development Department.
The Santa Teresa hub may be more than 800 miles from the port of Long Beach, Calif., but Davin Lopez, chief executive of the Mesilla Valley Economic Development Alliance, believes the new hub could lure logistics businesses from the West Coast.
“Union Pacific has always looked at this as an inland port,” Lopez said. “We have an opportunity to relieve congestion at the Long Beach and Los Angeles ports.”
A port is essentially a place to shift goods; in the case of an inland port, goods are moved between rail and truck, from modes of transportation into storage warehouses and vice versa. Some of the warehousing and distribution that takes place at an ocean port like Long Beach doesn’t necessarily have to happen in that location, Lopez said.
“They could move inland,” he said, and house or transfer goods at Santa Teresa to numerous points north and east or out west again.
“I think there will be some readjustments from a logistics and transportation prospective once the Union Pacific site is open and operating,” said Roberto Coronado, assistant vice president in charge of the El Paso branch of the Federal Reserve Bank of Dallas. “Companies might say, ‘Now let me start sending stuff in different ways.'”
Unlike highway infrastructure, which is publicly funded, the nation’s freight railroads are by and large built and maintained by railroad companies. Rail companies invested a record $25.5 billion in 2012, according to the most recent statistics from the Association of American Railroads, a trade group.
Omaha-based Union Pacific Corp., with a stock market capitalization of $84 billion, spent $3.6 billion on capital investment across its network in 2013 alone.
The nation’s biggest freight railroads are preparing for expected growth in freight moved by rail. The Federal Railroad Administration predicts the nation’s freight railways will see tonnage rise 22 percent between 2010 and 2035.
“We don’t just think what will be needed 10 years out,” Richmond said. “We’re really thinking generationally.”