FRONT ROYAL -- The Virginia Inland Port here didn't work out as planned, but it may work out. Designed for international cargo, the $10 million train and truck terminal opened in 1989 and rang up a string of losses that reached as high as $2.3 million.

But in the past two years, the 161-acre, state-owned facility has watched its domestic cargo-handling business grow, producing a first-ever profit in the fiscal year ended June 30 of nearly $10,000.

"I'd rather be lucky than anything else," said terminal manager Charles W. Beckett, describing the business that the planners of the port, near the intersection of Interstates 81 and 66 in the Shenandoah Valley, didn't envision.

Their idea was to use the terminal to enhance the ability of Virginia's seaports -- Norfolk, Portsmouth and Newport News -- to compete against Baltimore for international traffic by making it faster and cheaper to get cargo there.

Bags that were filled with pumice stone from Europe and destined for a Wrangler plant in Luray, Va., to stone wash jeans sat in the terminal grounds earlier this week, attesting to the fact that international cargo still counts. But domestic traffic is growing faster and may hold the key to the future.

If the $10 million investment in the facility depended on the increase in cargo to Virginia's Hampton Roads Ports (as the three are called collectively), it probably wouldn't have been justified, said Tom Finkbiner, vice president for intermodal of Norfolk Southern Corp., whose trains serve the Inland Port.

"If it were to rise or fall on international business alone, it would be a disaster, but fortunately, it didn't," he said.

Norfolk Southern, which originally provided service to the terminal three times a week, now runs a train every weekday.

In addition to carrying international cargo to the Virginia ports, it carries goods produced in the immediate area to markets in the south, and carries goods produced in southern states to the huge Washington-Baltimore market and other markets from Harrisburg, Pa., down to Richmond.

There are used automobile tires bound for recycling in Georgia, empty beer cans bound for the Coors brewery in Elkins, W.Va., light bulbs from General Electric Co.'s plant in Winchester, just north of here, and parts bound for the General Motors Corp. parts depot in Martinsburg, W.Va.

In June, the railroad carried 1,084 revenue shipments -- up from 591 a year before. Of those, 644 were trailers for domestic shipment and 450 were seagoing containers.

"Two years ago, we didn't have any domestic," said Beckett.

Joe Dorto, general manager and chief executive of Virginia International Terminals Inc., a private, nonprofit company that contracts to the state and runs the port terminals, noted that the facility is breaking even now.

It also has helped increase traffic to the Virginia seaports by providing competition that has helped hold down trucking and barge rates, he said.

But Michael P. Angelos, executive director of the Maryland Port Administration, discounts the role the facility has played in the success of the Virginia ports.

"It's really just a rail ramp for Norfolk Southern, and we don't see it as being a significant factor in the competition for container business," he said.

Both Finkbiner and Virginia port officials said the facility, in its early years, was the victim of both changes in the shipping industry and a recession in Europe and the United States that planners probably couldn't have foreseen.

International cargo-shipping lines went through a period of consolidation that resulted in fewer ships calling at fewer ports, they said.

In addition, according to Beckett, the facility's losses were exacerbated by a three-year contract that required the Inland Port to pay for a certain number of trains a week, whether any containers went out on them or not.

Now the facility pays a slightly higher rate for each box it puts on the train, but it only pays for what it ships, which is cheaper, said Beckett.

"Today, when I only had 25 containers come in, I had a train that held 60," he said.

The international cargo that the facility handles also has changed in ways that the terminal's planners didn't anticipate, Beckett said.

The growth in the domestic poultry industry and changing tastes has made frozen poultry bound for the Pacific Rim the largest outbound international cargo that the terminal handles, he said.

The Shenandoah Valley is home to major poultry producers, including WLR Farms Inc. and the producers of Shady Brooks Farms turkeys.

In 1993, the terminal moved a total of 12,000 containers -- or about 96,000 to 144,000 tons of cargo.

Beckett said he anticipates further growth at the facility, in part because of its proximity to the two interstate highways and in part because of the anticipated continued economic growth in the Winchester area.

"The idea, the concept, is valid," and finally shifting out of the loss column to report a small profit underscores it, he said.

"It's a complete turnaround. It really is."