The efforts of three Midwest short line railroads to grow new business have been honored by a trade organization representing the short line industry.
The three, which were recognized for their efforts to develop new business, are the Ann Arbor Railroad, the Indiana Rail Road and the Reading, Blue Mountain & Northern.
They along with a Delaware-based carrier were winners of the 2020 Business Development Awards from the American Short Line and Regional Railroad Association.
The Ann Arbor Railroad’s efforts to create an auto distribution center grew out of an analysis of auto sales and production trends in Toledo.
That review found a need for additional capacity in the finished vehicle distribution network, particularly for sport utility vehicles and trucks.
The Ann Arbor created a partnership with Fiat Chrysler Automobiles to build a distribution center in Toledo that opened in time for the July 2019 launch of the Jeep Gladiator model.
The Silver Creek distribution facility was the Ann Arbor’s fifth vehicle distribution center in Toledo.
Located on 20 acres, the facility has a 12-car rail spot and can accommodate a 90-car autorack train in support of FCA’s Toledo and Detroit assembly production with a daily 1,800-car throughput capacity.
In 2018, the Ann Arbor began using its Temperance yard in Toledo as a dedicated finished vehicle distribution center.
The yard had been used for transloading and mechanical projects but lacked significant volume.
Ann Arbor owner Watco said the distribution center played a key role in reducing FCA’s costs and maintaining its vehicles in Toledo.
That enabled work to remain in Toledo that FCA might have moved elsewhere.
The Indiana Rail Road was recognized for its work with an Indianapolis-based trucking company, Venture Logistics, to build a 406,000 square-foot distribution center in Indianapolis.
Opened in 2016, the facility with its 58 truck docks and 15 indoor rail car spots, has doubled its volume since 2017 to 2,600 carloads.
INRD CEO Pete Mills said the warehouse is a valuable asset in an era in which Class 1 railroads are practicing precision scheduled railroading and seeking to turn freight cars quickly to avoid demurrage payments.
“We can provide service six days a week and turn equipment fast with no demurrage bills,” Mills said.
The dry warehouse initially handled mostly rolled or cut stock paper, but has since expanded into food and building products, and engines and metals.
Venture provided $20 million to build the warehouse while INRD spent less than $1 million for track infrastructure.
The warehouse business has enabled INRD to broaden its traffic base beyond coal, which for many years was the short line’s primary traffic.
“We love coal, but that business is in jeopardy,” Mills said.
In Pennsylvania, the RBN&N undertook a project of providing more transloading services as a way to better serve existing shippers and attract new ones.
The railroad created new transloading facilities in West Hazleton and Ransom, and launched a trucking company that serves all four of its transload facilities.
These facilities enabled RBM&N to pick up 900 new carloads last year, which helped the short line handle a record 34,000-plus carloads for a year-over-year traffic growth of 6 percent.
RBMN purchased a former Proctor and Gamble warehouse in Ransom in October 2018. At 80,000 square feet, it’s three times larger than the railroad’s previous transload facility in the area.
CEO Any Muller said his company prefers not to lease facilities because “a lease is just throwing dollars out the window.”
He said the RBM&N has been transloading for 30 years “and it can be a big part of business, but it’s hard to accomplish. There is lots of competition.”
The Ransom facility serves five customers, handling bales of wood pulp.
The West Hazleton facility , which opened in November 2019, handles steel coils for one customer but could generate 440 carloads per year.
The short line created its own trucking company to serve its transload facilities, which enables it to provide customers with timelier and more seamless services.