(The following article by Kelly Kearsley was posted on the News Tribune website on April 19.)
TACOMA, Wash. — BNSF Railway and Union Pacific executives say transferring some of their Tacoma operations to Tacoma Rail will streamline their business – and is needed to manage the companies’ massive growth and avoid delays for its customers.
David Dealy and Jeff Koch, vice presidents of transportation for BNSF and UP, respectively, and Tacoma Rail Superintendent Paula Henry pitched the business deal to the Tacoma Public Utility Board and the City Council during a joint study session Tuesday.
The TPU board and the Port of Tacoma Commission already heard presentations on the proposal.
Many of the proposal specifics have yet to be decided, but in general BNSF and UP would pay Tacoma Rail to provide the companies with services that major railroads now do themselves, such as locomotive servicing and positioning, yard management and switching activities.
Like the Port of Tacoma, major railroads in the region are growing due to an increase in trade. Imports from the Far East by big-box retailers, as well as grain exporters that want to ship out of the Pacific Northwest, are driving the railroads’ growth in Tacoma.
Additional ships calling on Tacoma bring more business.
In the next two months, Union Pacific plans to increase the number of trains heading in and out of Tacoma each week from six to 18.
One way to keep pace with the rapid growth – not only in the region but also across the country – is to hire more employees, which both companies are doing by the thousands this year, and buy more locomotives and rail cars.
“The other way is looking at creating and developing capacity by streamlining our operations,” Dealy said.
The proposal would mean more revenue for Tacoma Rail, which brought in $16 million last year, and increase the rail line’s contribution to the city’s general fund, Henry said. Tacoma Rail brought $1.3 million to the general fund in 2005.
“It’s more revenue for government services people use every day,” Henry said. “It means more jobs for the area and more growth potential for companies.”
Dealy and Koch said BNSF and UP employees in Tacoma wouldn’t lose their jobs over the deal, though some of their duties might change. BNSF estimated the arrangement could affect 40 to 70 local employees.
Koch, with UP, didn’t know how many employees such a deal would affect. Tacoma Rail will also need additional workers if the deal goes through.
Still, the proposal worries many of the major railroads’ union employees – and has some questioning the logic of transferring the work of the major railroads, whose operating revenues exceed $290 million, to a smaller organization like Tacoma Rail.
Steven Sanders, local chairman of the United Transportation Union, said that as employees with more seniority switch positions, those with less might have to move, change shifts or switch jobs. BNSF should be able to do this work itself, he said.
In the end, he added, that would be better for Tacoma taxpayers, who could see their city-owned railroad struggle if there were a downturn in business.
“As a citizen of Tacoma, I’d have a problem with the responsibility for all this infrastructure transferred to an organization that’s run on a shoestring,” he said.
Henry, however, is confident in her organization’s success. Tacoma Rail has seen consistent revenue increases since 2001 and been in business since 1914. BNSF and UP wouldn’t have pitched such a proposal if the companies didn’t think Tacoma Rail was up for the challenge, Henry told the board members.
The major rail lines want Tacoma Rail start to these new services by midsummer.
The proposal requires approval from the TPU Board and City Council, as well as some federal review.