On May 8 more than 400 representatives from the railroad industry participated in 350 Congressional meetings as part of our annual Railroad Day on Capitol Hill.
Participants came from every part of our industry—short lines and Class I’s, rail labor, suppliers, contractors, shippers and local economic development officials. It was a show of force that focused the attention of Congress on our industry’s importance to the economy, the environment, our geographic reach and the critical role railroads play in providing the competitive transportation services that keep American businesses moving. It is an exhausting (but fun!) day for participants, and we owe them hearty thanks for taking the time and expending the energy needed to make this day a success.
Railroad Day is all about telling our story, both at the industry-wide level and at the individual-railroad level. There are more than 600 short lines in the country, working with thousands of different customers to solve transportation problems every day, so there are near endless stories to choose from, but here are two good ones.
The Texas & New Mexico Railroad (TXN) found itself in a quickly changing oil market where supply and demand and changing transportation patterns for frac sand and diesel presented an opportunity to substantially increase rail traffic. Diesel needs began to exceed pipeline capacity, requiring inbound diesel for operations to be trucked for 450 miles. Crude oil production had also exceeded pipeline capacity, and truck shortages resulted in some 300,000 barrels of oil per day being stranded in place.
The solution required the cooperation and financial resources of the shipper, the short line and the Class I connection. The shipper made an underutilized terminal on their property available. TXN required new access points into the terminal and capacity increases on its own property. TXN’s interchange partner, Union Pacific, would also have to fund capacity increases and obtain enough DOT 117 cars to move the product. All this planning and facility improvement was accomplished in 120 days from inception to completion, and 4,000 carloads of crude oil were shipped in the first four months.
Lake State Railway (LSRC) customer Weyerhaeuser operates an Oriented Strand Board (OSB) production facility in Grayling, Mich. In 2018 Weyerhaeuser proceeded with a planned shutdown to retool the facility to extend the life of the plant. During the shutdown LSRC would lose rail traffic and local loggers would lose work. While planning for the shutdown, Weyerhaeuser noted that following Hurricane Florence it had to furlough workers at its OSB mill on the Appalachian & Ohio Railroad (A&O) in Heaters, W.Va., due to a lack of local logs. LSRC saw an opportunity to move logs from Michigan to West Virginia, but faced significant hurdles. Neither LSRC nor the connecting railroads had the specialty equipment needed for the move. The participating railroads would have to offer a rate that could compete with what was historically a cheaper short-haul move. Neither LSRC nor Weyerhaeuser had a suitable loading site for the logs.
The solution involved working out a very competitive rate with LSRC’s connecting partners, CSX and A&O, and locating suitable LSRC yard track capacity for loading. The third piece of the puzzle was securing the specialty equipment—none of which was available on the three railroads. In this instance LSRC located a fleet of underutilized CN log cars in neighboring Wisconsin. CN was not in route and the car hire on the cars was not sufficient to justify sending them off line. But CN was eager to make this work for those with whom they did business elsewhere, and a satisfactory arrangement was made. The results were a win-win-win-win for everyone; LSRC moved 40,000 tons of logs in the first quarter of 2019 and Weyerhaeuser was able to keep the West Virginia facility and mitigate job losses.
These stories are being replicated in state after state across the country. They are stories about cooperation that preserves competitive rail service for shippers and jobs for employees. They are stories that demonstrate the creative spirit and problem-solving mindset of railroad entrepreneurs. They are the stories that highlight the railroad industry’s constant effort to do things better today than yesterday. They are the stories that we told Congressmen during Railroad Day on the Hill and that we must continue to tell so our elected officials understand the importance of what we do and the need for them to enact public policies that allow the railroad industry to succeed.