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Palmetto Railways in South Carolina Building $185M Line to Service Volvo Auto Plant

Wed May 31, 2023 - Southeast Edition #12
WCSC-TV & Charleston Post and Courier

The nearly 23-mi. rail line will connect to an existing CSX line near the Santee Cooper Cross Generating Station in Cross.
The nearly 23-mi. rail line will connect to an existing CSX line near the Santee Cooper Cross Generating Station in Cross.

Palmetto Railways has started construction on a rail line that will service the Camp Hall Commerce Park and the Volvo factory in Berkeley County.

Palmetto Railways President and CEO Patrick McCrory said the nearly 23-mi. rail line will connect to an existing CSX line near the Santee Cooper Cross Generating Station in Cross.

"This line is really intended to serve the U.S. domestic market — from here to New York and New Jersey, and from here across the country to Los Angeles and all [stops] in between," he told Charleston's WCSC-TV. "That's kind of our focus for the volumes. It's a main line used for any level of capacity."

Camp Hall will soon be home to the largest investment in South Carolina history and include Redwood Materials, which unveiled plans for a $3.5 billion campus several months ago, and is the current home of Volvo's automotive plant, where the company has been producing its S60 sedans since 2019.

The project will cost $185 million to build and has been in the works since 2016. McCrory added the rail line was included in the original negotiations to bring Volvo to the Lowcountry.

He said that as part of their agreement, Palmetto Railways, Volvo, CSX Corp., the state of South Carolina and the U.S. Department of Transportation (USDOT) each have invested in the new railway line.

"We anticipate roughly one train a day, five days a week," McCrory said to WCSC-TV. "Those are our initial estimates. That's what's tracking today. The train length is [around] 30 cars, give or take."

Palmetto Railways plans to add railroad crossings at several roadways, including Volvo Car Drive, U.S. Highway 176, and Mudville Road as part of the line construction.

Officials believe the added infrastructure could entice more investment to Berkeley County and South Carolina.

The line, which federal railroad regulators approved in 2019, is expected to take about three years to complete.

"The addition of a rail line will be a great benefit to Volvo Cars and industries in the surrounding area," noted Volvo spokesperson Katherine Bergmann in a statement. "This project represents a key investment in advancing industrial transportation capabilities, streamlining logistics and promoting economic growth."

Rail Line to Better Serve Volvo's Only U.S. Auto Plant

The 22.7-mi. track will run north and south through a swath of timberland between the Camp Hall business park near Interstate 26 to an existing freight transfer site that CSX Corp. operates in the community of Cross, on Lake Moultrie, north of Charleston.

A legislative panel on May 16 authorized the state's Commerce Department to draw $48.5 million from a special economic development fund for the long-delayed project, the Charleston Post and Courier reported May 16.

The first phase of construction began in April, according to documents provided to the state Joint Bond Review Committee, which approved the funding request.

South Carolina Commerce's financial contribution is $144 million, or more than three-quarters of the total, and the agency cited "higher materials costs, construction costs and inflationary costs" for the increased price estimate, the newspaper noted. Volvo and CSX are chipping in $6 million and $10 million, respectively. A federal transportation grant awarded two years ago is expected to cover the rest.

The rail infrastructure was part of a 2015 incentive package that the state offered Volvo in exchange for picking South Carolina for its first and only U.S. manufacturing plant. A lack of money, however, has put the project on hold.

In a letter to the lawmakers, SC Commerce chief Harry Lightsey said the four-year-old, $1.2 billion Volvo factory near Ridgeville is one of the state's biggest economic development victories in recent memory.

He added that Volvo's local rail service needs are increasing as the carmaker transitions to building electric vehicles in South Carolina and looks to reduce its reliance "on international supply chains."

The automaker has already negotiated deals with CSX to haul away from the plant as much as 75 percent of the cars that are made for the U.S. market, according to Lightsey. Right now, most are transported by trucks to a site near Columbia to be loaded onto rail cars.

"This has put an additional strain on I-26, which is already one of the more congested highways in our state," he wrote. "And the problem will only worsen as Volvo increases its domestic production of finished vehicles and sourcing of automotive components from domestic suppliers."

He noted that the CSX site in Cross directly feeds into a high-density line that serves the entire Eastern seaboard, from New England to Florida.

"These are many of Volvo's domestic markets," Lightsey told Post and Courier.

South Carolina Commerce said other companies opening in Camp Hall Commerce Park also will require rail service, including the $3.5 billion battery recycling plant that Redwood Materials is building at the Cross site.

State Rep. Gilda Cobb Hunter, D-Orangeburg, recently asked Lightsey whether the new line would cut back on the number of trucks on I-26 between Charleston and Columbia, which she referred to as "that parking lot."

Lightsey would not go that far, saying Camp Hall is not yet built out and likely is not a major source of congestion.

"I'm not sure we'll see a reduction, but what I think we'll see overall is significantly less truck traffic than we would otherwise have seen," he replied.

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