kevin b. page virginia department of rail and public transportation virginias railroads a...

KEVIN B. PAGEVIRGINIA DEPARTMENT OF RAIL AND PUBLIC

TRANSPORTATION

VIRGINIA’S RAILROADS

A STAKEHOLDER IN TRANSPORTATION DEVELOPMENT

Today’s Rail Presentation

• VA Railroad Overview• Intermodal Partnership

– TRUCK/HIGHWAY– CONTAINER/PORTS

• VA’s response to assist rail transportation through state funded rail industrial development programs

Railroad’s Timeline

• 1960’S Began downturn of railroad dominance in ground transportation

• 1970’S Scrapping the old system• 1980’S Deregulation• 1990’S Market recovery

External Circumstances

• National Interstate System• Truck Competition• Air Travel • Automobile• Federal regulations limiting

railroads from competition and rationalization of unprofitable lines

Year 2000

• Two Main Line Railroads• Ten Shortline Railroads• 3,188 Route Miles of Track

Rail Adjusts to Market Need

• Traffic flow change – NAFTA– Import/Export to China, Far East

• Truck/Rail found its niche– CDL and Drug Testing– Higher speed intermodal trains

• Railroads step into the Just In Time (JIT) inventory management

• Industries convert to “inventory on wheels”

Intermodal Partnership

Bridging Relationships Between Truck and Rail

CONCRETE AND STEEL,

A GEOGRAPHIC RELATIONSHIP

INTERMODAL CORRIDORS TO VIRGINIA PORTS

Intermodal Rail Corridors

VA/Railroads’ Stake in Enhancing its Rail

Network

• Fostering industrial growth by promoting and investing in a balanced transportation system for Virginia• Getting Ag goods to Market

– Where rail fits in– Need rail? How do I get it?– Managing Rail Service After

Implementation

Where Rail Fits in

• Rail typically enjoys:– high tonnage moves – the bigger the better– JIT moves – Assembly plant parts and supplies– Moves over 600 miles are truck competitive

• The longer the haul the better the rate

Where Ag Products Fit in

• Rail typically enjoys:– high tonnage moves – the bigger the

better– Rate breaks begin at or about 15 car cuts– Unit trains preferred for dedicated move

and less handling at terminals – Sidings at industry plant site to

accommodate the business generated

Challenges of Ag Rail Service

• Rail service typically needs:– Siding capacities to accommodate the

business generated– “Run around track” at or near terminal– Ability to weigh cars loaded out– Unit train moves – 15 car cuts or better– Need cars? Yours or theirs

• Lower volume business appreciated but at a higher price of doing business– Shortline railroads can offer better

service at the terminal

Rail Preservation

SHORT LINE PRESERVATION

A WINDOW OF OPPORTUNITYFOR INDUSTRIAL DEVELOPMENT

Rail Preservation

Before After

Providing improvements to rail lines and interchanges to handle heavier loads and improve track safety

Need Rail? How Do I Get It?

• Not all sites on rail can be served:– Curved track deters switches to plants– Availability of switching services– Grades and other geographical obstacles

• All railroads have an Industrial Development Representative to assist in making these determinations

Cost of New or Enhanced Rail Service

• What Industry Pays For– Main Line Switch– Improvements on site

•Track and loading/unloading facilities

– Improvements off site•Runaround track or yard capacities

• DRPT’s Rail Industrial Access Program can assist in capital costs of rail service on site

RIA Program Purpose

• Virginia’s pro business environment

• Additional incentive program– Compliments other economic

development initiatives– RIA is a unique program not

available in most other states

Rail Industrial Access

• Up to $450,000 available per jurisdiction per year

• Grantee eligibility– Business, commercial or industrial enterprise– Municipal or county governments– Local departments of economic development– Railroads

Managing Rail Service After Implementation

• Anticipation of delivery and coordination on site are the biggest components of successful rail services– Coordinate placement of cars with ability

to unload or load them– Cars sitting around cost you money – Skimping on rail siding capacity in site

design will cost you in the end• Plan big• Implement in phases as you grow the business