(The following story by Claudia Vargas appeared on the Democrat & Chronicle website on February 25.)
ROCHESTER, N.Y. — When William B. Morse founded his lumber company on West Main Street in 1853, boats coming down the Erie Canal would deliver his bulk orders.
But soon railroads sprawled across the country. William B. Morse Lumber Co. took advantage of the rail system, and more than 150 years later, a fourth-generation Bill Morse is doing plenty of business with a railroad, one owned by Genesee & Wyoming Inc.
While trucks have taken over a lot of the freight business, rail’s fortunes are turning around, said Norman Schneider, executive director of Railroads of New York. Short-haul lines in the Rochester region, such as Genesee & Wyoming’s Rochester & Southern Railroad and the separately owned Livonia, Avon & Lakeville Railroad, have had a steady increase in freight traffic.
Rail transportation “is cheaper, it has environmental advantages … and the highways have become very congested,” Schneider said. And railroads’ financial results are supporting those assertions.
Genesee & Wyoming recently reported a 14 percent increase in quarterly revenue, to $135 million, and a 20 percent rise in operating income, to $23 million.
Chief Financial Officer T.J. Gallagher said the company, which started in 1899 as a 14-mile railroad from Caledonia to Retsof in Livingston County, expects strong growth again this year.
The freight carried by the company’s Rochester & Southern and Buffalo & Pittsburgh lines has grown almost 50 percent since 1999, to nearly 100,000 carloads per year. The company employs about 85 people in the Rochester area and almost 300 in its New York/Pennsylvania region.
Rochester & Southern operations manager Bob Wilcox said people who work in the industry develop a sense of pride in their jobs. Even though they might complain about the weather or the strenuous work, they show up the next day.
“Once you start working here, you stay here,” said Wilcox, 29, of Dansville, Livingston County. “It’s such an intriguing job that a lot of people don’t understand.”
Raw materials
Most rail freight traffic consists of raw materials delivered to manufacturers, who often ship their finished products by truck. Pennant Foods Co. on Chester Street on Rochester’s west side brings in three main ingredients — bread flour, sugar and soy oil — daily by rail to make 50-pound ready-mix bags of cakes, brownies and other baked goods, said scheduling supervisor Michelle Van Kouwenberg. The plant then ships the bags by truck to distribution warehouses throughout the Northeast.
American Rock Salt Co. in Mount Morris, Livingston County, is an exception, using its own rail line connected to the Rochester & Southern to ship out 2 million tons of salt each year, said Chairman Gunther Buerman.
Buerman said rail is usually more cost-effective but added that sometimes truck deliveries make more sense. “If it’s going to a distributor in Rochester, it’s more effective to just deliver it by truck,” he said.
Buerman said it’s difficult to compare the costs of the two modes of transportation because of factors such as weight, location and whether the truck or train will be able to pick up other shipments on the way back.
Regional lines
Most counties in New York state are served by at least a short regional line, many of which connect to main Class 1 carriers such as CSX and Norfolk Southern.
William Burt, chief executive of the Livonia, Avon & Lakeville line, said LAL uses those main-line connections to its advantage. One of its newest customers, pasta and sauce producer Barilla America Inc., built a production plant and warehouse in Avon next to an LAL line that connects to three Class 1 lines, allowing the pasta factory to receive raw materials from the Midwest and West Coast.
Western New York Energy LLC also chose the location of its new ethanol plant in Medina, Orleans County, because of proximity to multiple rail lines.
“We were looking to build on land that either had main-line accessibility or a quality short line that wasn’t too far from the main one,” said Executive Vice President Michael Sawyer.
The Falls Road Railroad, which is part of the Genesee Valley Transportation Co., runs right by the ethanol plant and connects to a CSX line 17 miles away.
Fixing the tracks
Railroad companies are investing in improved locomotive technology and maintenance of the tracks. In the last few years, LAL has been putting in new rails on the line that runs from Lakeville to Henrietta, the same one the Barilla plant is on. With 2.5 miles remaining, the project is expected to be completed by 2009. The company has already seen a 20 percent increase in business within the last few years, Burt said.
CSX announced this month that it will spend $48.5 million to improve its upstate rail system, which includes 280 miles of track in the Rochester area.
Officials at both Genesee & Wyoming and LAL said they hope improvements to their systems will induce businesses to build sidings that connect to the railroads or build warehouses right on a line.
After all, some local businesses have stayed competitive in their markets because of rail transportation.
“Rail has been a very important factor in our ability to compete in the construction business,” said Morse, of Morse Lumber. “Some retailers have to depend on trucks because they don’t have sidings.”