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Family Business Stays on Tracks Hauling Freight

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NEW CASTLE, Pa – Two workhorse locomotives shuttle back and forth along tracks that bisect the heart of this city’s industrial sector as another car, recently purchased, sits housed in a large maintenance shop waiting to be commissioned for service.

Each day, these locomotives navigate 16 miles of rail tracks as they haul freight to and from some of the largest employers in Lawrence County. The spider-web network of tracks encircles New Castle, feeding into two major rail lines that provide access to markets throughout North America.

Scrap steel, aggregate, salt, plastics, and more recently sand (a result of hydraulic fracturing), are among the many commodities shipped and loaded onto trucks every day, thanks to what Dale Berkley Jr. calls “the best-kept secret in New Castle.”

“There are people in town who don’t even know we’re here,” says Berkley, president of the New Castle Industrial Railroad. Yet it’s very likely that residents of this city in western Pennsylvania have heard the train whistles blow each day and have seen these locomotives pull and push freight cars through the heavy industrial corridor.

The railroad employs nine and owns three locomotives that haul freight to 16 customers along the short line. New Castle Industrial Railroad owns 11 miles of the 16-mile track, and its hub is inside Elwood Quality Steel’s sprawling complex just off of Moravia Road.

Ellwood Steel, the largest customer of the short line, melts scrap steel at its plant here and manufactures specialty ingots for the steel industry, Berkley notes. “They’re constantly getting inbound scrap, but steel is down right now,” he says.

Nevertheless, business has never been better along the New Castle Industrial. “We had our best year last year, Berkley reports. Much of this business has resulted from a new trans-loading operation the railroad helped develop with McClymonds Supply & Transit, based in Slippery Rock, Pa. “A lot of this business is based on the hydraulic fracturing industry,” Berkley notes.

Hydraulic fracturing is a process used in oil and gas exploration, and is especially effective in horizontal wells in eastern Ohio’s Utica shale and Pennsylvania’s Marcellus shale. The process uses large quantities of sand and water, along with a smattering of chemicals, that are injected at high pressure into newly drilled wells to crack open fissures in tightly packed shale formations, thus unleashing oil and gas molecules.

The collapse in commodity prices has led to a slowdown in the oil and gas industry across the country. However, Berkley says, he hasn’t witnessed a drop off in his business. On the contrary, he thinks that this segment of the operation stands to grow over the next several years.

“I deal with two gas well companies – Universal Well Services and Keane Industries – and they make it seem like we’ll be going strong for the next five years,” Berkley says. “Two weeks ago, I had 200 carloads of sand at this trans-loading facility.”

The short line’s charge is hauling freight to customers off the main railways, Berkley says. Since New Castle Industrial can connect with both major carriers – Norfolk Southern and CSX – it gives its customers pricing advantages. “We’re an extension of the two major railroads,” he says, “and having access to the two helps the customer, since the railroads have to bid for their business.”

Business is likely to increase over the next several years as a large scrap operation just up the street is expected to open soon, Berkley adds. The short line serves other scrap yards in the immediate area as well.

New Castle Industrial Railroad started in business in 1992 when Berkley’s father, Dale Sr., and other local investors established the company. “We built this line around the Ellwood Group,” recalls the elder Berkley. “It was a tough 10 years at first.”

That first year, the railroad grossed all of $58,000. Last year, gross revenues exceeded $3 million, most of which is reinvested in the company, Dale Sr. says. “It’s been slow, methodical growth.”

Dale Sr., now mostly retired, began his career with the Pittsburgh & Lake Erie line, and left after CSX bought it. The five short lines that ran throughout New Castle proved an opportunity as Ellwood Group ramped up its operations in the early 1990s.

Today, the Berkley family owns the entire operation, Dale Sr. says, and credits his son with helping to expand the business far beyond its original purview. “Junior’s been the driving force,” he remarks.

Indeed, the rail industry runs through the Berkley family blood. Dale Jr. has spent the last 24 years in various capacities in the industry, he says. “I’ve been a conductor, an engineer, a yard master – I’ve done just about it all,” he says. His last position was working for CSX in Jacksonville, Fla. He left in 2007 to help his father with the New Castle line.

Since then, the railroad has made substantial investments in its tracks and building and made other aspects of the business more efficient.

“Now, I’m trying to teach my son the operation,” Dale Jr. says. “He’s worked here every summer learning all the different operations.”

Deven Berkley, who graduated from Slippery Rock University last year, says he’s learned a lot about the business since his summers in high school and is now finishing off his first year of full-time employment at the New Castle Industrial Railroad.

“When I first started, I was doing maintenance work, schedules – a little bit of everything,” he says. “More and more, my dad kind of steps away and leaves a little bit more on me. You never know what you’re going to walk into in the morning.”

On average, the short line runs seven days a week between 7 a.m. and 3:30 p.m., Deven says. “But, we’re here until we get the job done, so sometimes we’re here until 6 o’clock,” he adds.

New Castle Industrial Railroad provides a vital link to the region’s industrial sector, affecting hundreds of employees, says Linda Nitch, executive director of the Lawrence County Economic Development Corp.

“They’re certainly an important component in our ability to retain our businesses here as well as working with them to attract new business,” she says. “They’re a great asset. Dale Sr. recognized the opportunity in the early 1990s and he’s invested back into the rail itself. His son also understands the industry and sees how the short line can provide service into the heavy industrial corridor – where the Class I carriers won’t go.”

It’s imperative, however, that a short line such as New Castle Industrial recognizes the emerging trends across the industry so it can build opportunities, Dale Jr. says. “A lot of railroads are setting up intermodal facilities,” he says, “so if you have the property, there’s opportunity.”

All of this bodes well for the railroad’s long-term prospects, he says.

“We’re going to grow and there’s a lot of potential,” Dale Jr. says. “I have some ideas regarding truck-to-train and train-to-truck operations. That’s the wave of the future.”

Pictured: Dale Berkley Jr. and his son, Deven, represent the second and third generations in the family-owned business

Published by The Business Journal, Youngstown, Ohio.