Story published at magicvalley.com on Thursday, June 07, 2007
Last modified on Thursday, June 7, 2007 12:16 AM MDT

JEROME - WOW Logistics of Jerome ships 200 containers of dairy products overseas each month. It must ship the containers directly to port or to an internodal facility in Salt Lake City, where the containers are placed on a rail line for transport.

If an internodal facility was built in southern Idaho, his business would be better equipped to grow, said warehouse manager Mitch McClurg

"I would guess the savings, especially with fuel prices the way they are, would be at least 30 percent, if not more, if we were able to ship our containers to a closer facility," McClurg said. "Having an internodal facility in southern Idaho would be a huge advantage for everyone in the state. We alone could probably increase our shipments overseas by 50 percent."

An internodal facility, a place that would allow for the loading and unloading of ocean-going containers between trucks and rail cars, is not a new idea, said Rural Magic Valley Economic Development Association Director Kelly Bangerter.

"I've been in contact with many businesses, and shipping improvements is a big issue," he said.

The rural Magic Valley is served by Union Pacific and the Eastern Idaho Railroad, which is dependent on UP to serve the area by way of a connection point in Minidoka, Bangerter said, but businesses can't just put their freight on a rail car anywhere. They must first put their goods in a container and haul it 270 miles to Salt Lake City, the area's closest internodal facility.

"Businesses have two solutions really, build a facility in southern Idaho or relocate to be closer to an existing facility," Bangerter said. "Idaho is the only state west of the Rocky Mountains that doesn't have an internodal facility and we are also hundreds of miles from most major markets and ports."

Bangerter says businesses such as the Standlee Hay Co. in Eden could see substantial savings on their freight bill.

"Standlee Hay ships about 150 containers each month but could boost that to 300 to 400 if they had an internodal facility nearby," he said. "Those in agriculture are the biggest ones hurt by shipping costs because they only work on a 3 percent profit margin. With such a tight margin they can be crippled with a bad crop or soaring fuel costs."

"The Surface Transportation Board has calculated what is considered the normal threshold for shipping and in some parts of southern Idaho they are paying 180 percent of what's considered normal," Jacobsen said. "About 40 percent of the wheat grown in Idaho is raised in southern Idaho and almost all of it is bulk shipped by rail. They are a captive market and depend on Union Pacific. There just isn't any competition."

The commission fully supports an internodal facility being built. Jacobsen also sits on the Idaho State Department of Agriculture's transportation advisory group and says that the need for such a facility has been discussed.

"It's an idea that's surfaced and I'm sure we'll talk about it more," Jacobsen said.

Right now RMVEDA is going after a $50,000 Gem Grant to help pay for a feasibilty study that supporters hope will be wrapped up by early fall.

"Union Pacific has to be behind this for it to be a go," Bangerter said. "We sat down with them about a year ago and they were actually quite open to the idea. We just have to show them the economic advantage to them putting a facility here."

Times-News correspondent Blair Koch can be reached by e-mail at blairkoch@gmail.com or by calling 316-2607.