The Virginia Inland Port in Warren County. Courtesy of Port of Virginia.
The Virginia Inland Port in Warren County. Courtesy of Port of Virginia.

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A study commissioned last year by the General Assembly to study the feasibility of opening an inland port in either the Lynchburg or Bristol region dismissed one and gave a qualified nod to the other.

The study, paid for with a $200,000 state budget allocation, focused on what it called “two overarching determinants”: market demand and site availability.

Its conclusions: The Central Virginia Planning District, centered around Lynchburg, “does not currently have the demand to justify the development of an inland port.”

The Mount Rogers Planning District, on the other hand, which encompasses six counties and two cities in Southwest Virginia, “meets enough market-driven and physical conditions to warrant additional assessment.”

Meanwhile, the study urged both regions to pursue rail-centric development strategies – including “aggressive” site development – to further develop the kind of industry base that would support an inland port.

State Sen. Todd Pillion, R-Washington County.

State Sen. Todd Pillion, R-Washington County, said in a statement Thursday that he plans to introduce a “substantial budget amendment” in the upcoming General Assembly session to build on the study’s findings and “support the siting and development of an inland port in the region.”

“The conclusions of this report indicate the incredibly valuable and strategic assets that our entire region has to offer which, when leveraged together, can be transformative,” said Pillion, who worked with Sen. Steve Newman, R-Bedford County, to secure funding for the study. “A project of this nature could be a gamechanger for Southwest Virginia in terms of economic growth, job creation, and infrastructure development.”

Inland ports are places where cargo coming to or from coastal ports is transferred between trains and trucks. Such facilities can help relieve traffic congestion at busy deep-water ports and reduce the cost of moving cargo inland by taking trucks off the roads and replacing them with trains. 

Virginia already has one inland port, near Front Royal. The 161-acre site in Warren County sits 6 miles from the intersection of interstates 66 and 81 and a quarter-mile off Norfolk Southern’s Crescent Corridor.

Norfolk Southern trains bring loads of raw materials and finished goods from Norfolk, then pick up containers, both empty and full, for the trip back to the coast. 

An inland port itself doesn’t necessarily need many employees; a staff of 13 runs the Virginia Inland Port. But such a terminal can spur economic development across a region by attracting businesses that want to locate close to a transit hub.

The Virginia Port Authority estimates that the inland port has brought more than 8,500 jobs and more than $950 million into its region over the last three decades. Massive warehouses and manufacturing operations dot the nearby countryside; about 90% of the companies that use the inland port are within a 30-mile radius of the facility, port manager Lee Cranford estimated in November.

It’s not surprising, then, that the idea of building a second inland port in Virginia has been explored a number of times over the years, although none of the efforts has come to fruition. Pittsylvania County, the Roanoke-Blacksburg region and the Montgomery County community of Elliston all were considered possible sites for intermodal projects.

Today, interest in East Coast ports continues to rise as shippers have grown weary of watching container ships stack up at West Coast ports. Moffatt & Nichol, the consultant involved in producing the study, projects a continued modest market share shift from the West Coast to the East Coast and the Gulf. 

The state’s existing port structure is already growing. The Virginia Inland Port is poised for $23 million in improvements, while the port at Norfolk is in the midst of a $1 billion expansion.

Frank Harder, principal at the Tioga Group, a freight transportation and logistics consulting firm, in late November said that there’s “probably” room for additional inland ports in the Southeast. 

“But my experience tells me a careful market study is always a good idea,” he said. For instance, he asked, where would a new port’s competition come from? While the Virginia Inland Port, which opened in 1989, is widely considered to be the first of its kind in the U.S., the landscape has changed dramatically since then, and both Georgia and South Carolina have multiple inland ports.

Harder warned that the batting average for successful inland ports is relatively low. “There’s a lot more terminals studied than built,” he said.

The study includes an analysis of the economic impact of a “modest-sized” inland port facility, one that would sit on 100 acres and would have the capacity to handle 50,000 shipping containers a year. (In comparison, between 28,500 and 38,500 containers have moved through the Virginia Inland Port annually over the last five years.)

Assuming that it would attract several large manufacturing and warehousing facilities over its first 10 years, the cumulative economic impact of this model port would be $1.75 billion over 20 years. It would create an estimated 1,370 permanent jobs.

This model port would cost $55 million to construct, not including the cost of the land. The study doesn’t address how a new inland port would be funded.

* * *

How the two regions ranked

As initially proposed by Newman, the study would have looked just at the Lynchburg area. It was later expanded to include the region between Bristol and Wytheville, but it did not examine whether any other areas of the state would be better suited for an inland port.

Both the Central Virginia and Mount Rogers regions have relatively low populations and low population densities, and neither region on its own could meet the cargo threshold that would make an inland port financially viable for a railroad, the study found.

The picture improved for Mount Rogers after the study authors expanded the geographic boundaries of each region to include the likely market area for an inland port – extending Central Virginia west to the Roanoke Valley and Mount Rogers north to Giles County and south into Tennessee.

Using the larger geographic area, the Mount Rogers region – but not Central Virginia – has enough demand to make it worth a further assessment, the study said. 

In addition to market demand, several other factors weigh in the Mount Rogers region’s favor. It’s almost twice as far from the marine port at Norfolk as Central Virginia, and more rail miles make a location more attractive to railroads. It’s also served by two interstates, while Central Virginia has no interstate access. 

Both regions, the study says, could take steps to attract and grow companies that would increase freight demand and make them more attractive locations for inland ports. But it encouraged local leaders to consider whether pursuing an inland port is the most effective way to encourage economic growth.

“There are several paths forward for the regions to support rail-centric industry development,” it said. “These include developing strategies to grow import/export market density, developing rail-centric distribution and logistics hubs, or pursuing other cutting-edge supply chain-drive opportunities.”

In particular, it said, Central Virginia, which is served by both CSX and Norfolk Southern, has “robust rail” and should consider targeting companies that require rail service.

The study recommends that both regions pursue an “aggressive” rail-centric site development strategy, focusing on sectors including food and beverage and steels and metals in Central Virginia and, in Mount Rogers, advanced materials, transportation equipment and warehousing.

“The top priority for any industry growth strategy is to develop attractive sites ready for immediate investment when the opportunity arises for a company to locate or expand in the region,” the study says.

That recommendation dovetails with a push by Gov. Glenn Youngkin to aggressively increase the state’s supply of sites that are ready for economic development projects. In the budget amendments he introduced last month, Youngkin included an additional $450 million to prepare land for future economic development, on top of $150 million already in the budget, for a total of $600 million over two years.

Newman, who introduced the budget amendment that funded the study, wasn’t available Thursday to talk about the study’s impetus or its results. But in a written statement, he said he is “thankful” to the Virginia Economic Development Partnership for spearheading the study, which he said offered valuable ideas for his district’s future growth.

“This report demonstrates the depth of economic opportunities available in the Lynchburg region,” he said in the statement. “This report is an excellent roadmap for Central Virginia leaders to consider for a strengthened rail- and freight-centric economic engine that will broaden our economic opportunities in the long run.”

The study, which was conducted by the Virginia Economic Development Partnership, the Port of Virginia and Moffatt & Nichol, doesn’t provide a plan for what happens next, although it says that if a region decides to pursue an inland port, coordination with the Port of Virginia will be key.

“The commercial and market nature of an inland port requires that the port drive decisions about additional market assessments,” it says. “The port is in the best position to consider what market space an inland port could occupy and how an inland port could extend its market reach.”

Megan Schnabel is managing editor for Cardinal News. Reach her at or 540-819-4969.