For RBMN, Another Record Year

The Reading & Northern Railroad (RBMN) has again surpassed its own records for freight revenue, freight traffic and excursion passenger ridership.

Freight revenues at Railway Age’s four-time Regional Railroad of the Year (2002, 2011, 2015, 2020), Pennsylvania’s largest privately owned railroad, rose 10% over both 2020 and pre-pandemic 2019 levels, “fueled by increased traffic and a shift in traffic mix to higher revenue moves. RBMN also earned significant ancillary revenues related to its warehouse and transloading business.

Leading the way in traffic growth was RBMN’s Forest Products franchise, consisting of pulp, paper and wood products. Traffic rose by approximately 1,000 carloads to almost 11,500 carloads. The 9.6% year over year increase “doubled the 4.7% growth of the nation’s railroads,” RBMN noted. “And this growth was done without any new facilities. Growth resulted because many customers reached new highs in rail inbound volume. Much of the growth can be attributed to the so-called ‘Amazon Effect,’ the fact that more Americans are relying on home deliveries of goods, thus increasing the demand for corrugated packaging. We are fortunate to have many manufacturers of packaging material on our railroad. Growth would have been even higher if not for the diversion of more than 400 rail carloads to trucks due to various service disruptions on the nation’s rail system. Senior Vice President Marketing Rian Nemeroff is optimistic this growth will be sustained in the future.”

While Forest Products leads RBMN’s business portfolio in volume and revenue, RBMN said it still focuses much of its attention on outbound moves of anthracite coal. “Known as ‘The Road of Anthracite,’ we continued our pattern of significant investment in the coal business in 2021,” the Class II carrier noted. “RBMN purchased 153 additional coal cars at a cost of more than $1.5 million as well as three additional conveyors at a cost of more than $600,000. These conveyors are critical to RBMN’s strategy of assisting the movement of Pennsylvania anthracite to domestic EAF (electric arc furnace) steel mills. 

“For the past few years, the EAF market segment has been RBMN’s largest and fastest growing. With domestic steel production surging, two new mills came on-line in 2021, additional furnaces were added to four existing mills, and six new mills have been announced. RBMN, under the leadership of Senior Vice President Coal Bill Clark, has been laser-focused on getting Pennsylvania anthracite to the steel mills. Part of that strategy was to invest in off-line facilities where the coal could be transloaded from railcars to trucks for delivery to the mills. That is where conveyors come into the picture. Another part of that strategy was the construction of a new coal loadout on RBMN at Locust Summit, where an off-line coal producer can truck coal for loading into barge-equivalent rail shipments for movement to inland rivers. 

“The growth of the EAF market has helped to soften the blow of the rapid decline of export coal. Over the past five years, RBMN and Pennsylvania anthracite producers,have lost half of their export business to foreign competition. Although RBMN hopes to see an increase in exports in 2022, the fact is Russia has been dumping coal into the global market for the past few years and that has made exports a difficult market for Pennsylvania producers.”

While Forest Products and Coal provide the bulk of RBMN’s traffic base, the railroad continues to handle significant Food, mostly adult beverages like wine and beer, Plastics, Chemicals/Minerals, and Metals business. “RBMN continues to invest in facilities to handle these commodities through warehousing or transloading,” the railroad noted. “Those commodities add close to 10,000 carloads a year for RBMN as well as millions of dollars in revenue. In 2022, RBMN anticipates its largest growth in business will come from these segments. RBMN has just completed construction on a large Marcellus Shale-focused transload facility in Tunkhannock, Pa., that is in an excellent geographic location to help that region more efficiently handle the development of the area’s gas reserves. Jim Raffa, Vice President Market Development, is leading the development of that facility. RBMN has also signed a construction contract for another significant customer who will come on-line in the third quarter of 2022. As a result, RBMN’s traffic base will be even more diversified in 2022.”

RBMN called its results in the passenger business “nothing short of amazing. Under the direction of General Manager Matt Fisher, RBMN hosted 225,175 riders in 2021, a 75,000-rider increase since our pre-pandemic high. The growth in ridership was achieved by adding more train trips, more equipment and more origins. In 2022, there will be further expansion of RBMN Passenger service. RBMN has already begun passenger service in 2022 as Jim Thorpe trains are now operated year-round. Later this year RBMN will be starting excursion service from the Wilkes Barre/Scranton area out of Pittston. And, of much interest to railfans everywhere, RBMN steam locomotive 2102 will be entered into train service. As further proof of the commitment to the passenger business, RBMN Owner/CEO Andy Muller, Jr. purchased 13 additional passenger coaches at a cost of more than $2 million. The future looks very exciting for RBMN passenger operations.”

“Despite all these amazing accomplishments, 2021 will be remembered at RBMN as the year it acquired the 19-mile rail line connecting its Lehigh and Reading Divisions,” the company said. “Although RBMN had trackage rights over that segment for more than 20 years, the lack of ownership prevented RBMN from doing the significant track upgrade that was necessary for this midsection of the RBMN main line. This year, RBMN reached an agreement with Carbon County to acquire the line for $4.7 million, which included $1.7 million in track improvements and crossing upgrades at Jim Thorpe. After acquisition, RBMN forces began the long overdue work of upgrading the track, which is essential for both the freight and passenger business.” 

“The accomplishments of RBMN this year, and in fact over the past two years during the worldwide pandemic, are nothing short of amazing,” said Andy Muller Jr., Owner/CEO. “They are a testament to the men and women at the RBMN who come to work every day dedicated to taking care of our freight customers and passenger riders. I couldn’t be prouder of our workforce, and my entire family is thankful for all that they do. In recognition of the efforts of RBMN employees, the Muller family shared the company’s success with them. In addition to the existing profit-sharing program, the Muller family announced a 3% pay increase for full-time employees to assist with the impact of inflation. The family also gifted all employees a $500 ‘Turkey Day’ check before Thanksgiving. These efforts were in addition to the decision early in the year to give all employees two additional paid holidays, bringing the total to eight. The way RBMN treats its employees has been critical to RBMN’s success. Not only is RBMN successful in retaining its staff, but even in a tight labor market, we were able to hire 31 additional employees this year, bringing the total full and part-time staff to more than 300. The secret of our success is simple. Take care of your employees and work with them to take care of your customers. If you focus on people, everything comes together. That’s the Reading & Northern way.”