(The following story by Martin Luttrell appeared on the Telegram & Gazette website on May 1.)
WORCESTER, Mass. — With a global slowdown in the transport of intermodal containers, and the nation’s economy in a downturn, Providence and Worcester Railroad Co. last year added contracts for coal, ethanol and automobiles to boost business.
Speaking to about 80 people gathered at its annual shareholders meeting at the Crowne Plaza yesterday, P. Scott Conti, president and chief operating officer, said the three new commodities hold the promise for growth amid the slow economy.
Mr. Conti said that last year the company began transporting coal to the Mount Tom power plant in Holyoke and another in Bow, N.H. The company also started ethanol shipments from a Providence terminal, and automobiles are being unloaded at a newly improved terminal in Davisville, R.I.
The company moved 4,000 carloads of coal last year, and has already moved 1,200 so far in 2008, Mr. Conti said.
“It’s a very good commodity for us,” he said. “I expect for it to continue to grow.”
He said the three new commodities will provide growth during a slow economy.
“With those three commodities, we worked hard to gain new business,” he said. “Now the automobiles made in North America, we’re bringing them into New England, via rail and going by truck to local destinations. We’re seeing the benefits of that on an ongoing basis.”
The company also made improvements at the Providence port terminal where coal arrives, making shipments to power plants in as little as 16 hours, and alleviating the power plant operators’ concerns of coal freezing together in the rail cars.
“What we did is shorten the trains to 30 to 35 rail cars, gave them very good service, as little as 16 hours from the port to the plant,” he said.
“These utilities serve New England. There’s always going to be competition. But we see this as part of our growth.”
Mr. Conti said the company’s business is diversified among 165 customers, none of which comprises more than 15 percent of its business.
“Coal, ethanol and automobiles will be revenue gainers for us,” he said. “We’re very happy.”
Robert H. Eder, chairman and chief executive officer, declined to comment when a shareholder asked about the company’s first quarter of 2008.
“We won’t have anything to say about that until a statement comes out in 10 days,” he said. “The first quarter is always bad. Last year was a disaster, but we’re sitting here, smiling.”
Providence and Worcester Railroad is an interstate freight carrier with operations in Massachusetts, Rhode Island, Connecticut and New York. Its rail system extends over approximately 516 miles of track, and its trains transport several commodities, including iron and steel products, construction aggregate, chemicals, lumber, plastic resins, coal and processed food stuffs.
In response to a question of raising rates during the slower economy, Mr. Conti said that customers have other alternatives if rates go up.
“If our customers turn the corner and need to move more rail cars, we can handle it,” he said.
Yesterday, the board of directors declared a dividend of 4 cents per share on the outstanding common stock payable May 27 to shareholders of record on May 12.