Rail Line Upgrades Boost Industrial Development

YOUNGSTOWN, Ohio – Every day we see the ongoing major repairs to highways and interstates that serve the area: bright orange cones and traffic advisory signs, traffic reduced to one lane, the din of jackhammers, cement trucks. These inconveniences all are part of the infrastructure improvements necessary to keep business in the region moving.

Less visible, yet equally important to economic development in the Mahoning Valley, are upgrades to the major rail lines that serve businesses and could serve new companies considering locating here.

Among the most recent is the $571,000 upgrade to a four-mile stretch of the Norfolk Southern Railway line that stretches from North Jackson to Lordstown, says Sarah Boyarko, vice president for economic development at the Youngstown Warren Regional Chamber.

The chamber was instrumental early last summer in putting together a proposal for state funding before the Ohio Rail Development Commission, Boyarko says. The result was a $284,000 grant to help with the overall $571,000 investment.

“We put together a 61-page proposal on why this investment needed to occur,” she recalls. The upgrades would ensure continued service to 31 development and potential development sites — 22 in Mahoning County and nine in Trumbull County. “The great majority of these sites are land, not buildings,” she notes.

That makes these sites much more attractive in marketing them for development, Boyarko says. Without the upgrades, rail service to these areas could be compromised – both to potential users and to those parcels with buildings recently occupied by industrial customers.

The former Ameristeel building in North Jackson, for example, stood the chance of losing rail service without the upgrades, Boyarko says. The 307,000-square-foot building, vacated after Gerdeau Ameristeel announced cutbacks as a result of the declining steel market two years ago, is a prime location for an industrial supplier that might also require rail service, Boyarko notes. “There’s demand there,” she says. “If you take away rail service, than it’s just another building. This has the capacity to store 18 rail cars onsite and the ability to pull cars into the building.”

Upgrades to the track encompassed tie replacements, crossing improvements and surface improvements to this section of the line, Boyarko says.

“2015 was a year of preparation for 2016 and 2017,” she says.

Ten companies depend on the two short line railroads owned by the Mahoning Valley Economic Development Corp., says its executive director, Michael Conway. Half of those businesses use the Youngstown & Austintown line, the other half the Warren & Trumbull Railroad.

Both lines are owned by MVEDC, but the Genesee & Wyoming Railroad operates them, Conway says.

The Y&A line runs behind an industrial section of Austintown, namely the Henricks Road area and provides access to the Norfolk Southern line, Conway says. “We deal with about 20 to 25 cars a month,” he says. The Warren & Trumbull track serves another five or so customers at the Warren Industrial Park and other industrial areas of Trumbull County. That line connects with CSX’ main track.

In 2014, the two tracks combined pulled 709 cars, Conway reports. “Last year, we pulled 699 cars, so we were fairly close to the previous year.”

However, traffic in 2016 along the combined 18 miles of two tracks expects to be significantly down because the busiest customer on the Warren line, Warren Steel Holdings, shut down its operations earlier this year. At one point, the steel producer was loading 100 cars a month. “We expect rail traffic to fall off because of Warren Steel Holdings,” Conway says.

Overall rail activity across the country is down, largely because of weak commodity prices of oil and gas and a sharp decline in the coal industry, according to the Association of American Railroads.

The number of carloads moving across U.S. tracks plummeted in December 2015, statistics show. That month, roughly 480,000 carloads were transported by rail in the United States compared to more than 530,000 carloads in December 2014. Volume increased to some 510,000 carloads in February, on par with year-ago numbers in 2015, 2014 and 2013, data show.

The industry did witness solid increases between 2013 and 2014, the Association of American Railroads reports. The average wage rose to $86,198 from $80,291 during that period and the number of employees in the industry increased to 166,209 from 182,819.

Freight revenues also improved between 2013 and 2014, data show. In 2013, the industry boasted revenues of $70.5 billion; in 2014, that number stood at $75.1 billion.

By far, the largest product carried by rail across the country is coal. In 2014, 713,178 tons were shipped by rail. The next highest product shipped in terms of tonnage was chemicals and related products, 177,740 tons.

Although the latest statistics reflect a slowdown in rail traffic, activity at the Ohio Commerce Center in Lordstown remains robust, notes Dan Crouse, a commercial real estate broker for Routh-Hurlbert in Warren, which markets properties at the development. The Commerce Center, which houses an array of suppliers, manufacturers and distribution centers, is today marketed to companies that either use rail or supply the industry.

“We want the available space, or most of it, to be reserved for people who work on, or use, rail,” he says.

Crouse says there’s been an increase in shipments of a variety of products into the Commerce Center. Companies such as Matalco, an aluminum smelting operation scheduled to soon begin full production at the Commerce Center, is likely to use rail extensively once its operations begin.

And, Anderson DuBose finds advantages in lower shipping costs by receiving frozen foods via rail to its distribution center, then loading the products onto trucks that deliver them to McDonald’s and Chipotle restaurants.

Over the last several years, internal track upgrades at the Commerce Center have helped improve its viability, while major upgrades along the CSX line from Baltimore to Chicago indirectly helps the region’s ability to lure companies and cargo here.

“The rail upgrades here have impacted us threefold,” he says. “First, it’s allowed us to handle longer trains on site. Second, it directly resulted in making our site more desirable for Matalco to locate there, and third, it gives us the potential to access Norfolk Southern.”

Ohio Commerce Center has access to the CSX main line, Crouse says. Improvements along the Baltimore-to-Chicago corridor – or, the National Gateway Line – will allow trains passing through the Mahoning Valley to haul double-stacked freight containers. This is especially important because the Port of Baltimore is among the deep-water harbors in the East that can accommodate container ships able to pass through a newly widened Panama Canal.

“It’s faster to go to Baltimore and ship them inland by rail rather than have them sitting in Long Beach [Calif.],” Crouse says.

All of this bodes well for the Commerce Center and the future of rail transportation in the Mahoning Valley, Crouse says. “We signed a contract two days ago that will bring in 6,000-foot-long trains of material,” he says. “There’s nobody around here that can handle that.”

Editor’s Note: The MidApril edition of The Business Journal, in subscriber’s mailboxes next week, features a series of reports on the region’s rail industry.

Copyright 2024 The Business Journal, Youngstown, Ohio.