News:

This the the text of an Associated Press article that appeared in the August, 29, 2009 edition of the Rochester Democrat and Chronicle

Local shortline railroads keep factories connected

by Ben Dobbin

After an hour of shunting rail cars aside, a 1964-vintage locomotive operated by Tim Carney nudges six hopper-loads down an embankment into the Barilla pasta factory in Avon. It's a routine delivery: 540 tons of semolina flour milled in St. Louis from durum wheat grown in North Dakota.

The Livonia, Avon & Lakeville Railroad, a scrappy private firm with 30 employees and $4.5 million in sales, owns just 27 miles of track. But it offers bulk freight shippers like Barilla customized access to America's 140,000-mile rail network.

Nevermind tax breaks, cheap land or owner Guido Barilla's delight at the proximity of the Finger Lakes wine region. Without that rail ribbon, the world's biggest pasta maker wouldn't have contemplated putting a $100 million-plus Northeast hub in Livingston County in 2007.

"It was a must for us," said Kirk Trofholz, president of Barilla's U.S. subsidiary.

Spawned by a grass-roots "Save the Railroad" campaign in 1964, the LA&L is a vital ingredient in keeping its namesake trio of small towns humming.

With patrons like Kraft Foods, Archer Daniels Midland, Cargill and Perdue churning out Cool Whip, corn sweeteners, cereal grains and chicken feed, the railroad helped hatch a "food corridor" that has once again ducked hard times hitting vast sectors of the economy— not least, the bellwether rail industry.

As big carriers abandoned old branch lines considered too short or remote to be profitable, micro-enterprises like the LA&L filled the vacuum.

Since federal deregulation in 1980, so-called shortline railroads have surged in number from 200 to roughly 520. Dwarfed by behemoths like CSX and Union Pacific, each has freight revenues below $28 million a year. Two-thirds operate along less than 50 miles of track and only 50 extend beyond 250 miles.

But they employ nearly 20,000 people and handle one-quarter of all freight, although it's often just the first and last few miles of a transcontinental journey. They offer businesses big and small — foundries, grain elevators, power plants, mines — high-volume advantages that trucking can't match. A rail car can carry up to 125 tons, triple the capacity of a truck.

Overall rail volumes have slumped 15 percent to 20 percent this year due to the recession, with the steepest drops occurring on lines hauling metals, lumber and other raw materials and industrial products for manufacturing and construction.

Spread across every state but Nevada, few shortlines have folded but employees' hours have been chopped back, said Adam Nordstrom, a lobbyist with the American Short Line and Regional Railroad Association in Washington, D.C. "We've been hit very hard. If our customers aren't moving goods, they're in trouble, too."

One bright spot is food.

"That's been fortunate for us because obviously, even in an economic downturn, it has to get pretty bad to stop eating," said LA&L Chief Executive Gene Blabey.

Blabey, 70, is a major stakeholder in the LA&L, the Bath & Hammondsport subsidiary with 42 miles of track in Steuben County, and the Western New York & Pennsylvania, a 300-mile-track affiliate.

"Were it not for these boutiques, rural and small-city America would have lost its railroad infrastructure," he said. "The trend in every aspect of business is 'bigger is better.' Yet rail has, since the 1980s, gone to 'smaller is better.'"

Each of the seven mammoth Class 1-category railroads has annual revenues exceeding $346 million. The LA&L links with three: CSX, at a Rochester junction, and Norfolk Southern and Canadian Pacific via a regional line to Silver Springs in Wyoming County.

The resulting bidding between long-distance carriers translates into cheaper costs for LA&L customers whose wide mix of commodities — lumber, plastic, food, fertilizer — arrives from all across North America.

While there are far fewer miles to traverse, LA&L crews eat up the hours moving empty cars back to Rochester, picking up new ones and often parking them for days along two short sidings in Avon until a factory calls looking for a fresh delivery.

NEW WNYP TRANSLOADS

2 new transload operations have been established on the Western New York & Pennsylvania Railroad.

Bulk Transload Facility at Meadville PA. This transload is set up to handle all manner of dry bulk commodities including construction, minerals, fertilizers and grain products. Facility will be equipped to handle liquids as well. The Meadville Transload operation is owned by the Western New York & Pennsylvania Railroad and operated by T.R. Shearer AG & Landscaping Commodities under contract with the Railroad.

Food and Package Commodities Transload in Cuba NY. The Warehouse is permitted to handle Food Grade commodities as well non-food packaged items. Operated by: Sargent Transportation, Cuba, NY

PERSONNEL CHANGES AT HEADQUARTERS

The boards of the Livonia, Avon & Lakeville Railroad, B&H Rail Corporation, and Western New York & Pennsylvania Railroad, L.L.C., at their January 2009 meetings, elected Raymond R. Martel of Dalton, NY, to the position of vice president and chief financial officer of the three companies. Mr. Martel assumed his CFO responsibilities on January 5 and was elected vice president by the railroads' boards of directors later in the month.

The LA&L announced the promotion of Shellie Shellenbarger of Livonia to the position of controller for the LA&L and its affiliated railroads effective March 1. Ms. Shellenbarger, who started with the railroads in August 2008 as accounting manager, reports to vice president and chief financial officer Raymond Martel.

NEW BUSINESS MILEPOSTS

On the WNYP, Suit-Kote of Cortland, NY, is building an 1,800 ft siding to receive liquid asphalt at Meadville, Pa. The facility will open in the summer of 2009. LA&L'S in-house construction crew will prepare the side track for the new customer. Danzer Forest Products is ready to open a lumber transload facility in the WNYP Olean (NY) Yard this spring. A new track switch at the south end of the siding serving the Glenn O. Hawbaker facility at Turtle Point, Pa., on the WNYP, will improve transit times on that customer's movements of building stone in support of PennDOT and NYSDOT projects in northern central Pennsylvania and the Southern Tier of New York. The switch will enable WNYP crews to pull and place cars while operating in either direction past the Hawbaker plant. On the B&H, Inergy, at Bath, NY, has expanded their rail facilities with additional unloading stations in support of expanded underground gas storage. The track at the plant was constructed by LA&L forces and opened in late 2008. On the LA&L, Barilla America continues to invest in its Avon, NY, pasta manufacturing plant, opening 3rd and 4th production lines there in the first quarter of 2009 and adding to LA&L traffic in the process. The new Barilla plant at Avon In December 2008, the LA&L completed the construction of a new spur track serving the growing PACMA facility on Bronson Hill Road in Livonia and an 800-foot extension of the existing spur at Papermill Rd in Avon to permit increased freight car storage for the company's customers, including Sweeteners Plus and ADM. New spur under construction at PACMA in Livonia The first cars on the extended Papermill Rd. spur

OTHER ITEMS OF NOTE

The LA&L completed a track surfacing project on several main track segments, the lead to Lakeville Yard, and certain industrial spurs during the fall of 2008. A culvert was replaced on the Kraft Lead in Avon in fall 2008, and a culvert just south of Avon was rebuilt in March 2009. Sufacing track on the Livonia Spur in 2008 New turnout ready for installation in Lakeville Yard In a project funded in part by New York State in connection with the removal of LA&L track from State Routes 15 and 20A, Lakeville Yard is being augmented with two new tracks aggregating more than 800 feet, the tracks to be named in honor of our late yard conductor Stephen "Bird" Rainer.   Stephen "Bird" Rainer Photo by John Fasulo © used with permission The LA&L board of directors meeting in October, RS36 locomotive #418 was named in honor of long-time chief mechanical officer Kevin P. McGarvey. After the ceremony, the board and members of McGarvey's family rode in business car "Traveller" over the LA&L main line to Genesee Junction and back, pulled by the newly-named "Kevin P. McGarvey."   Kevin P. McGarvey (Photo by John Fasulo © used with permission)