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Fiscal Cliff

Short line railroads face tough track ahead

Blake Farmer Jan 8, 2013
Fiscal Cliff

Short line railroads face tough track ahead

Blake Farmer Jan 8, 2013

Short line railroads is one industry that came out on top in the fiscal cliff deal. Congress’ last-minute negotiations extended a generous tax credit for repairing old tracks, and some of them could really use the help.

Often a hundred miles or less, short lines could be considered the on and off ramps to the railroad network, off the beaten path.

“Being in Amish country, we have to be a little wary of horse and buggies,” says engineer Craig Risner as he pulls through a road crossing near Ethridge, Tenn.

There are no crossing gates at this spot. On an average weekday, only two dozen railcars ride this line. The speed limit is just 20 miles an hour because the tracks are decades old and in disrepair.

Most of the short lines were sold to mom-and-pop operators in the 1980s because the big rail companies weren’t making money on them. In some instances, the tracks have been worth more dead than alive, just in the scrap metal value of the iron rails.

“There are lines being abandoned more times than we care to say,” says Matt Prince, manager of Tennessee Southern Railroad.

Prince’s company is finding its footing after the recession, he says. But competing with the nimble trucking industry has been tough.

“It’s definitely been a struggle,” he says.

Still, there are customers that depend on short lines. A giant Volvo front-loader emerges from a gray cloud, after dumping calcium silicate in a hopper car. The powdery bi-product is left over from an old phosphate plant.

“We’ll ship it down to Florida, the big stuff right yonder,” says Betty Runion, pointing to giant mounds of crushed material that will be used as fertilizer for sugar cane.

The Calcium Silicate Corp. employs a dozen workers in an area where jobs are in short supply. Employees have included several members of the Runion family, including — now — Betty Runion’s grandson. She says the short line is key to their business.

“Without it, I don’t think we could do what we do here,” she says. “It really is our lifeline down here.”

Particularly in rural areas, where employment options are limited, the short lines are an underappreciated connection to commerce, says Ed Harlan of the Tennessee Department of Agriculture. He’s trying to keep them around.

“To people in smaller rural counties that have been able to keep a job or a family member to keep a job, it’s pretty darn important,” he says.

Harlan has been out meeting with farmers, trying to drum up new short line customers.

“The efforts to keep the short line rail are not nostalgic efforts,” he says. “They are based on solid business and transportation issues.”

Trains can be a more fuel-efficient way to move goods, though they do require more planning and often more time.

Even as a mode of transportation associated with bygone days, 2006 was the industry’s best year. That’s according to the American Short Line and Regional Railroad Association.

Association president Rich Simmons says there are pockets where railroad companies are again making money hand over fist — near natural gas fields.

“If you happen to be a short line that’s in and around and operating near one of these shale formations, the money that you are making is unprecedented,” he says.

But many other short lines have been chugging along since the recession, trying to piecemeal enough work to keep moving down the tracks.

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