May 15, 2018
Freight

Lake State Railway: A plan comes together

Written by Railway Age Staff

SAGINAW, Mich. – It may have taken 25 years, but Lake State Railway is finally ready for its close-up.

The short line operating out of this mid-state city has built an impressive following, and more than one hundred employees, customers, suppliers, elected officials, friends and family turned out for the formal presentation of Lake State Railway as the Railway Age 2018 Short Line of the Year.

The Lake State story is a good one for short lines and the railroad industry in total. Briefly: Founded by the late Jim George in 1992 and still backed by the family, LSRC in late 2013 implemented a strategic growth plan and began substantial capital investment to rebuild more than 200 miles of worn-out track, and has won back lost business and attracted new shippers, adding new lanes and a focus on transloading. Along with elected representatives and a state that recognizes the value of freight rail operations, today more than a half-billion dollars worth of on-line industrial development projects are under way, generating hundreds of jobs and thousands of rail carloads along the near-300-mile system stretching north to Gaylord and Alpena, and southward to Flint.

Railway Age Senior Editor Stuart Chirls (l) presents the 2018 Short Line of the Year award to Chairperson Judy George; President and CEO John Rickoff; Chief Financial Officer Kevin Mitrzyk, and Mike Stickel, Executive Vice President and Chief Operating Officer. Photo: Kevin Burkholder

Offering Railroad Retirement, Lake State has expanded its headcount by 20% so far this year, and now has more than 80 employees operating 26 locomotives, 500 freight cars, and handling an average of 40,000 carloads a year. It interchanges with Class I’s CSX and CN, and with Huron & Eastern and Mid-Michigan Railroad.

President and CEO John Rickoff, who joined Lake State in 2010 after working at Indiana Rail Road (the Railway Age 2018 Regional Railroad of the Year), viewed the day’s event as just another part of the larger plan.

“Up to now we preferred to ‘fly under the radar,’” he told Railway Age. “This is a competitive business, and you don’t know who is watching. We are aggressive in our marketing; our employees of course are the reason why we are here and thriving. We are building something substantial here, and the time is right to let everyone know it.

“We look forward to more honors.”

Photo: Kevin Burkholder

Spotted alongside its offices, Lake State’s office car special was open for inspection led by LSRC SD40-2 6301 with special award logo to commemorate the occasion. (LSRC dresses its motive power fleet in matching paint, to present a professional, first-class image.) Behind a power car was Pullman sleeper-lounge 71 Saginaw Bay (ex-Amtrak, nee Seaboard Air Line); Budd-built dome car 202 Lake Huron (ex-Amtrak, ex-Norfolk & Western, nee Wabash), and business car 424 Jim George, a unique all-steel “shorty”car with open platform built by Pullman in the 1920s for division superintendents on the Santa Fe.

The executive train was scheduled for a shippers excursion—a time-tested strategy for winning over potential customers, observed Chief Operating Officer Mike Stickel. “Sitting out on that open platform and just riding the train put people in the railroad mindset, some who don’t really know what working with a railroad is all about. There have been a lot of contracts signed in that dome car.”

Photo: Kevin Burkholder

The executive cars are stored in the vast surviving portion of the steam-era roundhouse and backshop in Saginaw’s three-sided yard, where the vintage operating turntable harks back to former C&O subsidiary Pere Marquette.

The Lake State Railway roundhouse has 12 tracks and three drop pits. Photo: Stuart Chirls

Later, Saginaw was a staging point for auto parts traffic originating in more than a dozen area General Motors plants, before the industry declined and the yard fell into disuse. LSRC has effected renovations, lifting rails out of the mud and weeds, spending millions to add switches, respacing tracks to modern standards, and adding capacity. The carrier hauls cement, chemicals, coal, corn, soybeans, limestone, fertilizer, steel, scrap metal, and more for more than 30 industries. Saginaw hosts the short line’s modern dispatching center, classification and car storage operations; several tracks can accommodate entire unit grain trains. (LSRC provides rail service for cereal giant Kellogg’s.) “It’s all scaleable,” Stickel said. “When the time comes and traffic increases, we’ll be able to handle it.”

That time is coming sooner than later. For example, a new transload operation—little more than a track and a mobile conveyor—has been set up to supply shipments of organic soybeans for a major restaurant chain. “We are interested to see how it develops. It used to all move by truck but we think it will turn into substantial carloads for us,” said Stickel.

Just like they planned it.