(The following article by Tim Gulla was posted on the Wilkes-Barre Citizens’ Voice website on October 23.)
WILKES-BARRE, Pa. — Manufacturing companies across northeastern Pennsylvania are rediscovering rail service, and economic developers are laying new track instead of ripping out what once was only an artifact of the region’s steam-powered past.
The reasons for rail’s resurgence vary, from increasingly congested interstate highways and rising fuel costs, to the shift of rail-using manufacturers away from high-cost states on the eastern seaboard and logjams at ports of entry for international trade, local economic developers said.
Freight car traffic has almost doubled in 2006 compared to last year for the Luzerne County Redevelopment Authority, which owns about 66 miles of short-track rail serving 32 local businesses, executive director Allen Bellas said. He expects about 2,500 freight cars on his rails this year, compared to about 1,300 last year.
At times, Offset Paperback saves up to $35 per ton by shipping carloads of paper stock from Canada by train instead of truck, said Joe Flaherty, manager of purchasing and inventory control.
Today, the Dallas, Pa.-based book printer is one of the heaviest users of freight rail in Luzerne County, each year receiving about 1,500 train cars of Canadian paper at a Laflin distribution center. It would take three tractor trailers to move the load within each train car, Flaherty estimated.
Massive links of steel were key to attracting companies such as Archer Daniels Midland and Coca-Cola to business parks in the Hazleton area that could bring hundreds of new jobs, Hazleton Can Do President Kevin O’Donnell said.
That is why Can Do is in the process of laying 1,900 feet of new track in Humboldt North in Hazle Township, specifically for Archer Daniels Midland’s planned cocoa processing plant.
Roughly one out of every five manufacturers inquiring about northeastern Pennsylvania says it needs rail access, said Jim Cummings, president of Penn’s Northeast, an economic marketing agency.
Now talk is even growing louder of the possibility of an intermodal freight rail center somewhere in northeastern Pennsylvania – a place that could combine the best attributes of freight rail, warehousing and trucking to move large quantities of international products.
Without naming names or locations, Cummings said he was recently contacted by a developer scouting possible sites.
The hottest area for rail development will be the Poconos, because of good access to both mainline rail and interstates, and because it has some of the largest tracts of buildable sites, said Larry Malski, chief operating officer of the Pocono Northeast Regional Rail Authority, which resulted from a merger of the Lackawanna and Monroe County rail authorities.
“It’s very clear, 70 percent of the phone calls we’re getting are from people moving out of New Jersey and New York metropolitan areas because of the high costs of taxes, utilities and land,” he said. “They’re finding the Poconos region, where we have land and sites, is where they want to be because they’re out of the high-cost area.”
Malski’s agency is building new track in Pocono Summit for Monadnock Non-Wovens, and in East Stroudsburg for Excel Storage Products.
“That’s what really raises the eyebrows of the people who live here,” Malski said, “when they hear new rail is being built.”
Even in a region rich in railroad history and home to the Steamtown National Historic Site, economic developers say northeastern Pennsylvania doesn’t have enough rail to meet the new demand.
Among the Greater Wilkes-Barre Chamber of Business and Industry’s five business parks, there are few undeveloped sites remaining with rail access.
Only five rail-served sites remain in the Crestwood Industrial Park in Wright Township, none in East Mountain, none in Hanover Crossings, and all of the rail sites in Hanover Industrial Park are occupied, said John Augustine, director of economic and entrepreneurial development at the Wilkes-Barre chamber.
“We have a region strewn with rail lines, but most were in urban areas that today don’t meet the needs of growing companies,” said Luzerne County Commissioner Todd Vonderheid, a former executive at the Wilkes-Barre chamber.
The situation is similar in the Scranton area.
“We have right now probably two or three sites that we could put a rail user on,” said Austin Burke, president of the Greater Scranton Chamber of Commerce.
The lack of rail-served sites has the Scranton chamber looking north toward Carbondale, where the Casey Highway has opened access to more land for industrial development with rail service, albeit at a higher cost.
“There’s some rail sites up there that are brownfield (polluted) sites that cost a decent amount to reclaim,” Burke said. But the need for rail remains a priority, making reclamation a strong possibility.
Rail access wasn’t as important just a decade ago, so some non-rail users were placed in sites with rail service they don’t use, economic developers say, which added to the loss of inventory.
Augustine said he’d do it again, though, if it meant new jobs for the region. You can’t sit on land waiting for a perfect client.
Mainline operators like Norfolk Southern and Canadian Pacific, two companies with mainlines in northeastern Pennsylvania, have reinvented themselves.
Once competitors, rail’s best customers now include the nation’s largest trucking and shipping companies, such as UPS, according to a rail industry trade group.
Rail shipping still has some disadvantages – it might take six to seven days to transport product by rail, as opposed to two or three days by truck, and winter weather can create logistical problems.
However, New York-based rail analyst Anthony Hatch says the industry has fixed many of its flaws over the years, becoming more efficient and responsive through technology and upgrades.
“The railroad industry has definitely undergone a renaissance over the past 20 years,” said Tom White, director of editorial services at the Association of American Railroads, a trade group for the nation’s rail operators.
White estimates that rail is three times more fuel efficient than trucking.
“We have two people operating a train with the equivalent of 300 truck loads so you don’t have to have those 300 drivers,” he said.
As more companies ask for rail-served sites, economic developers are looking for suitable property.
Can Do in Hazleton, which has large tracts of undeveloped land, and new business parks such as Mericle Commercial Real Estates CenterPoint Commerce and Trade Park in Jenkins Township, may hold promise.
Bellas, of the Luzerne County Redevelopment Authority, said CenterPoint is on his radar screen for new track development.
Bellas is also holding out hope that the authority can restore 70 acres in the Ashley rail yards to productive use as buildable sites, and that joint plans by the authority and the Greater Pittston Chamber of Commerce to develop the Avoca rail yards move forward.
The state has awarded $975,000 in funding to get the Avoca site ready, and inquiries about the site are already arriving, said Rosemary Dessoye, executive vice president of the Pittston chamber.
“That was the last piece of the funding puzzle,” she said, “and hopefully that’s going to enable us to develop approximately 100 new acres of rail-served land.