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Rail News Home Short Lines & Regionals
Rail News: Short Lines & Regionals
September 2003
Rail News: Short Lines & Regionals
Sticking to it
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If at first you don’t succeed, try bringing new ideas to the table, getting supporters in your corner and asking the government for help — especially if you’re seeking to land what could be your biggest customer.
That’s the lesson Florida Central Railroad Co. Inc. (FCEN) officials learned as they tried to obtain business from Florida Auto Auction, which annually trucks 300,000 automobiles.
Because its mainline is located just one mile from the auto auction’s Winter Garden, Fla., facility, the 64-mile shortline appeared to be a logical carrier for the auction. FCEN officials approached the auction about 10 years ago with the idea to drive automobiles to the mainline, load them onto rail cars and ship them to CSX Transportation’s Taft Yard in Orlando. CSXT then would transport the cars throughout the country.
But the plan never panned out. The railroads and auction couldn’t agree on who would take possession of cars during transport. And since cars are high-theft items, security rules required a vehicle inspection every time a vehicle changed locations, adding another step to a complicated process, says Ben Biscan, FCEN vice president and general manager.
“Over 10 years, you throw a lot of ideas on the wall. Some of them stick and some don’t,” he says.
One idea eventually did stick.
“The only way we could get everybody interested was if we had a physical track inside the auction’s facility,” Biscan says.
Financial foibles. Placing a rail spur inside the facility would eliminate the need to move cars to FCEN’s mainline. Vehicles are loaded at the auction, and the process is orchestrated by auction personnel. The move reduces liabilities that could be created by transporting cars to the mainline.
But the mile-long rail spur’s $3 million price tag presented yet another problem because neither party had money to invest in the project. That is, until two years ago, when the Florida Transportation Department began the Transportation Outreach Program, designed to alleviate congestion by offering intermodal funding. FCEN convinced state Rep. Randy Johnson the spur was worthy of funding and Johnson added the project into the budget. The state approved a $1.2 million grant to help build the spur.
The rest of the project was completed through cooperative efforts between FCEN, CSXT and the auction.
The spur opened for service early last month. FCEN has a two-man crew and supervisor dedicated to operate the auction spur, and the short line and CSXT work directly with car dealers to reach a transportation agreement.
“The concept is to create capacity to the degree we can flow and cycle products in, load them up and get them out of the facility, generating space for the auto auction,” says Andy Strok, vice president of CSXT’s automotive service group.
Seeking new opportunities. Car dealers from across the country visit the auction to bid on cars, then ship vehicles back to dealerships. The business is different from most auto shipments railroads make. Rather than dealing with one major manufacturer, the shippers are individual dealers, which complicates administrative processes because CSXT can’t use its dedicated routes and rates. But the Class I’s officials welcomed the challenge.
"This is clearly a new business opportunity for the railroads,” says Strok.
The concept is a new one for the auction, too. Few auto auctions offer rail as a transportation mode, says Biscan.
“From the auction’s perspective, this is just another transportation option to offer dealers,” says Florida Auto Auction factory manager Ryan White. “Rail — in many ways and to many destinations — is much cheaper than truck.”
And that selling point has enabled the auto auction to market northern and West Coast territories.
Railroad and auction officials are unsure how many dealers will opt to use rail to ship automobiles, but FCEN expects to obtain about 10 percent of the auction’s business. Officials will have a better idea in a couple of months, when the auto auction’s season picks up as manufacturers unveil 2004 models. The auction’s busy season also coincides with the state’s tourism season, which further congests highways.
“This fits with our strategy of modal conversion, taking highway traffic and converting to rail opportunities,” says CSXT’s Strok. “We envision this as a pilot where similar opportunities in other markets can be pursued. As highway congestion becomes more of an issue, it will become important to seek these opportunities.”
That’s the lesson Florida Central Railroad Co. Inc. (FCEN) officials learned as they tried to obtain business from Florida Auto Auction, which annually trucks 300,000 automobiles.
Because its mainline is located just one mile from the auto auction’s Winter Garden, Fla., facility, the 64-mile shortline appeared to be a logical carrier for the auction. FCEN officials approached the auction about 10 years ago with the idea to drive automobiles to the mainline, load them onto rail cars and ship them to CSX Transportation’s Taft Yard in Orlando. CSXT then would transport the cars throughout the country.
But the plan never panned out. The railroads and auction couldn’t agree on who would take possession of cars during transport. And since cars are high-theft items, security rules required a vehicle inspection every time a vehicle changed locations, adding another step to a complicated process, says Ben Biscan, FCEN vice president and general manager.
“Over 10 years, you throw a lot of ideas on the wall. Some of them stick and some don’t,” he says.
One idea eventually did stick.
“The only way we could get everybody interested was if we had a physical track inside the auction’s facility,” Biscan says.
Financial foibles. Placing a rail spur inside the facility would eliminate the need to move cars to FCEN’s mainline. Vehicles are loaded at the auction, and the process is orchestrated by auction personnel. The move reduces liabilities that could be created by transporting cars to the mainline.
But the mile-long rail spur’s $3 million price tag presented yet another problem because neither party had money to invest in the project. That is, until two years ago, when the Florida Transportation Department began the Transportation Outreach Program, designed to alleviate congestion by offering intermodal funding. FCEN convinced state Rep. Randy Johnson the spur was worthy of funding and Johnson added the project into the budget. The state approved a $1.2 million grant to help build the spur.
The rest of the project was completed through cooperative efforts between FCEN, CSXT and the auction.
The spur opened for service early last month. FCEN has a two-man crew and supervisor dedicated to operate the auction spur, and the short line and CSXT work directly with car dealers to reach a transportation agreement.
“The concept is to create capacity to the degree we can flow and cycle products in, load them up and get them out of the facility, generating space for the auto auction,” says Andy Strok, vice president of CSXT’s automotive service group.
Seeking new opportunities. Car dealers from across the country visit the auction to bid on cars, then ship vehicles back to dealerships. The business is different from most auto shipments railroads make. Rather than dealing with one major manufacturer, the shippers are individual dealers, which complicates administrative processes because CSXT can’t use its dedicated routes and rates. But the Class I’s officials welcomed the challenge.
"This is clearly a new business opportunity for the railroads,” says Strok.
The concept is a new one for the auction, too. Few auto auctions offer rail as a transportation mode, says Biscan.
“From the auction’s perspective, this is just another transportation option to offer dealers,” says Florida Auto Auction factory manager Ryan White. “Rail — in many ways and to many destinations — is much cheaper than truck.”
And that selling point has enabled the auto auction to market northern and West Coast territories.
Railroad and auction officials are unsure how many dealers will opt to use rail to ship automobiles, but FCEN expects to obtain about 10 percent of the auction’s business. Officials will have a better idea in a couple of months, when the auto auction’s season picks up as manufacturers unveil 2004 models. The auction’s busy season also coincides with the state’s tourism season, which further congests highways.
“This fits with our strategy of modal conversion, taking highway traffic and converting to rail opportunities,” says CSXT’s Strok. “We envision this as a pilot where similar opportunities in other markets can be pursued. As highway congestion becomes more of an issue, it will become important to seek these opportunities.”