Railway Age’s 2021 Short Line of the Year is the R. J. Corman Memphis Line (RJCM), the second short line acquired by the company’s late founder, Rick Corman. Here’s the railroad’s story, as told by Executive Vice President Commercial Affairs Justin Broyles.
YOU CAN’T TEACH AN OLD DOG NEW TRICKS?
Acquired in 1987, RJCM has witnessed many successes over the past 30 years due to our dedicated team of railroaders, the dynamic communities we serve, and our relentless drive to partner with our customers on safety, efficiency, innovation and capital investments.
By all accounts, 2020 was an extremely challenging year in many ways. The worldwide pandemic significantly impacted the economy and global supply chains and challenged the daily lives of so many of our families, colleagues, and the communities we serve. Nevertheless, the R. J. Corman team and our Memphis short line were able to overcome these obstacles and thrive.
RJCM produced a record-setting year for carload volume with several key customers. It created new efficiencies in service with technology advancements, invested more than $5.5 million in infrastructure and joined forces with Class I partners in innovative ways to dramatic effect. Our success represents a team of men and women exceptionally committed to top-of-the-line service and loyalty to our customers that provides integrated solutions with impactful results.
There is an adage that you can’t teach an old dog new tricks. The thinking is that long-established ways become a mindset that cannot be changed. At first glance, this adage may seem well-placed in the railroad industry—one birthed in the age of Lincoln —but the short line industry knows better and RJCM knows best: A short line railroad has the unique capacity for homegrown innovation and success, an approach that leverages its long-standing commitments to the clients and communities it serves combined with an entrepreneurial spirit to drive economic growth.
So, what happens when an industry established nearly 200 years ago and more specifically, a rail line acquired more than 30 years ago, is challenged by a new reality? Or as it was coined last year, a “new normal”?
As 2020 unwittingly ushered in a global pandemic that severely impacted supply chains and the economy, it was a remarkably difficult year to sustain business and more difficult still to adapt and thrive. If responsiveness and adaptability to this “new normal” were crucial for success, the overarching question for an operation running for more than three decades is: Can a mature railroad once again grow and adapt to meet the challenges of today’s supply chain?
THE MEMPHIS LINE
RJCM was purchased from CSX in August 1987. It was the second railroad line acquired by our company’s late founder, Rick Corman. It became a symbol because it launched the conception of what is today the R. J. Corman Railroad Group, a premier service provider for the railroad industry and operator of now 17 short lines. Spanning more than 100 miles, RJCM operates in Kentucky and Tennessee, serving urban centers and industrial facilities.
With 47 customers, RJCM has built a reputation of long-lasting relationships with its clients, some of them spanning more than 30 years of partnership.
Throughout the years, RJCM has solidified and strengthened a bond with its customers. 2020 presented us with an unprecedented reality that rocked the markets and created a perfect scenario to test those relationships by executing our plan and exploring new creative strategies for growth.
RJCM entered 2020 with an ambitious plan full of new initiatives. A plan to drive economic activity in new ways and push forward on strategic partnerships with customers, commitments to the community and our Class I partners, capital investments in infrastructure, and technology advancements that allow for greater ease of doing business.
The “new normal” that arrived unannounced in March 2020 added new challenges such as balancing the safety of employees and the evolving supply chain needs of customers during the pandemic, but it also gave way to new solutions.
Significant capital investment in capacity projects as well as critical infrastructure were needed to grow our existing business and to support commerce in the communities in which we operate.
Cumberland River Bridge Automation Project: In 2020, RJCM undertook an extensive project in the rehabilitation, automation and remote integration of the Cumberland River Bridge. These enhancements improved the operational reliability of the swing span and reduced the amount of time needed to swing the span open for water navigation of larger boats or closed for rail transportation.
Highlights of the project:
• Replacement of access ladders and integration of fall protection provisions.
• Addition of an electric drive motor on the pivot pier.
• Replacement of the rail lift crank and key.
• Replacement of bridge ties.
• Upgrading navigation lights.
• Installation of new hydraulic power to drive wedges, lift rails and latches.
• Installation of limit switches to indicate position of wedges and the swing span alignment position.
• Installation of a control panel on the approaches and swing span.
• Installation of remote-control mechanisms in the railroad locomotive fleet.
• Installation of train signals on both approaches.
This significant investment was made possible by the combined funding efforts of R. J. Corman, the Montgomery County Rail Authority, and a Consolidated Rail Infrastructure and Safety Improvements (CRISI) Program grant. It provides substantial benefit to both R. J. Corman operations and the community. R. J. Corman Railroad contributed $1.9 million toward a total project spend of $3.4 million for 2020.
Expansion of the South Union Distribution Center: R. J. Corman coordinated with a key customer, Logan Aluminum, to expand its warehousing capabilities at the R. J. Corman South Union Distribution Center in Woodburn, Ky. The distribution center primarily handles large coils of aluminum and serves as a vital part of Logan Aluminum’s supply chain.
The expansion project increased warehousing capabilities by approximately 30% or 52,000 square feet. In addition to improved storage capacity, the project also added three new truck bays to better support short hauls to local customers, and three new railcar spots inside the warehouse to better support outbound rail shipments.
In 2020, railcar shipments into the distribution center increased by an impressive 1,661 carloads or 41% vs. 2019 due in large part to the expansion’s increased capacity.
Interchange Capacity Project at Memphis Junction: In an effort to improve network fluidity at the CSX/RJCM interchange in Memphis Junction, Ky., R. J. Corman completed significant upgrades. At a total investment of $860,000, these upgrades included 2,800 feet of new track construction and four new switches that were necessary to create additional capacity and sustain the high quality and reliable service our customers have come to rely on. The improvements were also mutually beneficial to CSX, as the new infrastructure increased the ability of both railroads to handle increased freight traffic.
Logan Aluminum: As the single-largest can sheet facility in North America, Logan Aluminum supplies more than 45% of the North American can market. They produce an astonishing 2 billion pounds of aluminum annually. The company is currently owned as a joint venture between Novelis and Tri-Arrows Aluminum and has been a strategic shipping partner on RJCM since 1987.
As previously detailed, R. J. Corman operates a distribution center in South Union, Ky., and is a vital part of Logan Aluminum’s supply chain. The center stores and ships aluminum coils that can weigh up to 45,000 pounds each. It maintains a 30-ton overhead crane and 35-ton rated forklifts for its material handling needs.
R. J. Corman’s team recognized a need to expand the distribution center to better support Logan Aluminum’s growing needs for storage and material handling. The team developed a plan to increase square footage at the distribution center by 30% and increased its headcount by two people to assist in supporting the growth that the expansion generated. Plans for an expansion were under way by 2019, and the expansion was completed in first-quarter 2020.
By anticipating the needs of our customer, RJCM made it easy for Logan Aluminum to increase throughput at the distribution center with inbound rail shipments and material handling and storage at the facility. R. J. Corman’s vertical integration and broad scope of services in the supply chain space enabled a 41% growth in volume, or an additional 1,661 carloads in inbound rail shipments to the distribution center in 2020 vs. 2019.
Nyrstar’s Clarksville smelter was designed to recover zinc from the high-zinc-content, low-impurity Tennessee Valley zinc concentrates produced by the Tennessee mines. Zinc is a natural, durable and sustainable resource that has a huge impact on daily life. It has diverse applications including construction, transport, communications, electronics and consumer products. This makes zinc an essential and highly sought-after resource. The Clarksville smelter is currently the only primary zinc producer in the U.S.
Historically, rail shipments have had stiff modal competition, as a large portion of the U.S. zinc market lies within one-day delivery distance from the Clarksville smelter over the road (OTR), and the smelter has its own river port that allows efficient supply of raw materials. However, after several discussions with Nyrstar, R. J. Corman devised a plan to gauge Nyrstar’s OTR conversion potential on two key products—sulfuric acid and zinc ingots. R. J. Corman performed a rate study on all potential end user locations to determine which lanes were most economical. This analysis clearly indicated that rail could not only compete with truck on multiple lanes, but offer a more advantageous supply chain solution due to R. J. Corman’s ability to offer additional services, such as storage.
The Memphis Line was able to offer extensive storage capabilities that allowed Nyrstar to have more security over its pipeline of shipments. This shift to rail translated into approximately 1,484 OTR conversions on sulfuric acid and zinc ingot shipments. As a result, Nyrstar had an impressive carload growth of 125% year-over-year in 2020.
Hankook Tire is a South Korean tire company dedicated to manufacturing high-tech tires for passenger cars, SUVs, trucks and buses. They built their first manufacturing facility in the U.S. on RJCM in Clarksville, Tenn. R. J. Corman Railroad Company performed construction services on its rail spur in March 2015.
Due to COVID-19, the Clarksville plant was forced to shut down on multiple occasions. This decision to suspend operations greatly impacted Hankook’s ability to process railcars in a timely manner, and demurrage started to become a serious concern for this customer. R. J. Corman was quick to engage with Hankook and provided a temporary demurrage relief agreement that reduced the financial impact of demurrage, while we partnered with Hankook to finalize a new “Storage in Transit” agreement. This solution would allow Hankook Tire to forward-position a critical supply of inbound carbon black, a key raw material for the plant’s tire manufacturing operation. Additionally, this solution helped safeguard the plant against any additional unplanned shutdowns that could have resulted from inbound suppliers deciding to suspend operations later in the year, since Hankook had a secure stockpile of carbon black stored on the RJCM just miles from its facility.
Hankook increased carloads by 48% in 2020 due to the successful forward positioning of raw materials for the plant utilizing RJCM’s Storage in Transit solution.
2020 was a good year for innovation and ease of doing business projects on RJCM. Taking advantage of new digital tools, the Memphis Line implemented Wabtec’s RailConnect software into its operations. This innovative tool allows customers to have on-demand and real-time visibility of railcars on RJCM, and creates the opportunity to use this data to improve efficiencies and productivity in its railcar pipeline.
Along with access to live information, this tool enables our customers to submit requests for switching, create digital bills of lading, release orders, and access a variety of other work instructions.
This new application has created considerable productivity improvements by reducing manual processing and preventing potential data-entry errors.