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— by Jeff Stagl, Managing Editor
On Nov. 3, the San Pedro & Southwestern Railroad (SPSR) reached a milestone by marking its 10th anniversary.
The short line launched operations in 2003 after its parent company ARG Transportation Services (then doing business as the Arizona Railroad Group) acquired a 10-mile line between Benson and Curtiss, Ariz., from RailAmerica Inc.
SPSR interchanges with Union Pacific Railroad's Los Angeles-Chicago mainline in Benson, Casa Grande and Willcox, and serves regional businesses in Cochise County.
In two years, the short line expects to arrive at another key mile marker: SPSR officials believe annual carloads will triple by 2015 after reaching a projected 3,000 in 2013 and 2,200 in 2012. Traffic already has nearly doubled in the past five years from about 1,600 carloads.
The primary reasons for the optimistic forecast: SPSR's location and traffic diversification efforts. The short line is centrally located among numerous copper mines, which generate many carloads of mining chemicals for the railroad, says Tom Foster, vice president of rail marketing for ARG Transportation Services, which also operates the Coos Bay Rail Link in Oregon.
In addition, SPSR moves agricultural products — such as feed grains — and building products, and serves the 580-acre Central Arizona Commerce Park in Casa Grande, which is located on a UP mainline. Currently, only one customer in the park generates carloads, but SPSR officials expect traffic in the park to grow over time.
"The railroad is doing exceptionally well. We want to diversify the traffic base, but continue to move more mining chemicals, as well," says Foster.
SPSR is in "a perfect spot" to serve eight copper mines in southwest Arizona and two in New Mexico, says Paul Thomas, ARG Transportation Services' VP of rail operations. SPSR customers Apache Nitrogen Products Inc. and Chevron Phillips Chemical Co. L.L.C. supply chemicals to the mines from the Benson area, he says.
The short line also is involved in several projects that are projected to boost carloads.
A company plans to build a transload spot facility in Benson for mining chemicals that will double SPSR's mining chemicals business, says Thomas. SPSR already operates a three-acre transload facility in Benson that can accommodate up to 10 rail cars. The short line also provides industrial switching services as a third-party contract provider.
In addition, a proposed copper mine expansion in Sahuarita, Ariz. — which is in the final permitting phase — would generate more mining chemicals and transload business, says Thomas.
Moreover, Arizona Grain Inc. is building a facility in Willcox that's slated to open in March 2014. The facility will double the short line's annual grain traffic in the area from 500 to 1,000 carloads, says Thomas.
Although SPSR just turned 10, its roots date back more than a century. The short line's oldest predecessor, the Arizona and South Eastern Railroad, built a 60-mile line from Benson to Bisbee, Ariz., in 1888.
The Arizona and South Eastern was acquired by the El Paso & Southwestern and extended from Bisbee to Douglas and El Paso in 1902, then later was merged into the Southern Pacific Railroad in 1955.
SP sold the property in 1992 to Kyle Railways, which became part of StatesRail Inc. in 1997. StatesRail was purchased by RailAmerica in 2002.