May 15, 2008

All aboard?
Why the old-fashioned freight train might make a comeback
By Brian Early bearly@hippopress.com

A few times a week, Peter Dearness runs a freight train between Concord and Manchester. It’s a short distance, but a round trip can take four hours or more, traveling mostly at 10 mph. On a recent run from Manchester to Concord, Dearness hauled about 2,200 tons of freight. It took 18 cars. For that trip, he might have used eight gallons of diesel fuel. The same amount hauled in a truck would take approximately 54 tractor trailers and 152 gallons of diesel to make the 17-mile trip.

Across the country rails are being built and refurbished to meet the need for a cheaper form of transportation than trucks. Even within some regions, companies are looking back to rails as a way to move their goods from city to city. For bulk commodities, like the coal that fuels Public Service of New Hampshire’s Bow facility, using trucks instead of trains to move the product would increase the shipping cost dramatically. Trains allow shippers to move a large quantity of product with relative ease.

But here in the Northeast, rail has some problems.

Years ago, train tracks crisscrossed the state, ferrying goods and people within and outside New Hampshire. By the early 1840s, the rail was double-tracked from Boston to Concord — this is the New Hampshire Main Line. Double tracks allow the movement of trains in both directions with minimal holdup.

In Nashua, there were connections to the Seacoast and Keene. In Manchester, there were branches to the Seacoast, Henniker, Milford and Lawrence, Mass. In Concord, there were branches to Lebanon, Claremont and Lincoln. The Seacoast connected to Maine as well as northern parts of the state. Many of these rights-of-way consolidated long ago because of the duplication of tracks to certain areas of the state.

The paper mills and timber industry in the North Country relied on trains to get their goods to market. In the south, the textile makers used trains to ship goods and materials in and out of the city. Freight lines were built out to granite quarries.

Passenger rail operated frequently to all areas of the state. There were three daily trains from Boston to Montreal with stops in New Hampshire.

Many of those tracks are now gone. As trains became less profitable, as manufacturing moved out of New Hampshire and as highways took both freight and passenger from the train, rail companies shut down and abandoned tracks. Double-tracked lines were ripped up and either used elsewhere or scrapped.

In 1983 the state enacted a law that gave the state the right of first refusal of purchase on all rail rights-of-way that train companies were selling. Today, the state has amassed a bank of rights-of-way, waiting for the day when they are needed again.

Freight train, freight train, going so fast
It’s clear that, nationwide, freight trains are getting a boost.

According to a Wall Street Journal article in February, there have been $10 billion in railway improvements since 2000 and another $12 billion are planned, including the expansion of tracks and building warehouses and transfer points along the routes.

CSX Corporation, a long-haul shipper operating along the East Coast and the Midwest, airs commercials in Boston to entice businesses to use rail instead of long-haul trucking.

Today, even trucking companies utilize long-haul trains to ship goods.

The cost of fuel permeates most discussions, whether it’s at the pump or at the grocery store. As the price of fuel rises, the cost of products usually rises as well. Filling up a tractor trailer a few years ago would cost $500. Now it’s more than double that. And so, for the first time in decades, many freight companies are enjoying a renaissance.

A typical rail car can hold approximately three tractor trailers’ worth of material. Multiply that by 100 or so rail cars crisscrossing the country on long pathways that avoid traffic, and you have the ability to move an extraordinary amount of goods. “It’s a 28-lane highway,” said David Fink, president of Pan Am Railways, which operates in southern New Hampshire and Massachusetts.

For Dearness, it’s more like a six-lane highway. He owns and operates the New England Southern Railroad, a short-line freight railroad. Short-lines pick up freight and feed it to trunk lines, the main railroad thoroughfares. Dearness usually gets deliveries from Pan Am Railways, a regional long-haul freight company that connects much of northern New England to the rest of the country.

For the most part, short-lines are where the state’s freight shipping business is at, as much of New Hampshire’s old network of freight lines has been dismantled — some permanently, some indefinitely.

In 2000, at the request of Massachusetts, Vermont and New Hampshire, the Federal Railroad Administration designated a high-speed rail corridor that connected Boston to Montreal, crossing New Hampshire along the Main and Northern Lines.

Currently, the state’s main focus is making commuter rail happen, connecting first Nashua, and soon after Manchester and Concord, to Boston. The first step is for lawmakers to deal with passenger liability when the commuter train is in operation. Last week, the Senate approved a $75 million liability, which has to be passed by the House and accepted by Pan Am Railways, which owns the tracks where the commuter line would run. After the liability issue is resolved, the tracks need to be upgraded so that passenger rail can operate at a higher speed.

While much of the talk has been about passenger rail between the two cities, it is possible that a freight line with connections to Boston and Montreal would benefit business and consumers in the state.

Having different forms of transportation is important for the state’s economic vitality, said Peter Griffin, the president of the New Hampshire Railroad Revitalization Association.

“Freight is extremely important in a well-balanced transportation system,” he said. “We need freight to compete with other parts of the country.”

A solid freight service could also entice businesses to the state.

Many say that action needs to be taken soon, as it could take years to get some of the rails back in service. One of those corridors is the Northern Line, which connects Concord to Lebanon.

“Its time is coming, but it’s a slow process,” Dearness, the short line operator, said about the Northern Line. “Ten to 15 years from now, it would be foolish not to have it open.”

But for the corridor to work, Dearness said, it would have to be for both freight and passengers. If it were open for just freight now, there probably wouldn’t be enough service to maintain the track.

Soon after the high-speed corridor was designated, the three states collaborated on the first phase of the study, which was published in 2003. It looked into the possible ridership on the tracks. The next phase of the study is to look at what engineering would need to be completed, and to examine the costs of preparing the track. New Hampshire is holding up the process, as it has not funded the roughly $84,000 needed to complete the next part of the study.

What’s the holdup?
There is also a significant barrier to the project in New Hampshire; most of the Northern Line tracks no longer exist. They were there in the early 1990s; the Boston and Maine sold the line to the state, but ripped up sections of the tracks after the sale. Since then, most of the rails have been removed to be used elsewhere in the state.

New Hampshire, for the most part, hasn’t had any significant increase in investment in its tracks, except for the Main Line West line, which runs freight, and the Amtrak Downeaster from Maine to Boston via Durham. Much of the track in the state today is not up to the standards of what the cross-country carriers use. The lower quality of tracks forces freights to travel at slow speeds, like on Dearness’ short line, New England Southern.

Infrastructure issues along the state’s remaining rails could hinder freight shipments into the state. The most obvious disadvantage of trains is that they can only travel where there are tracks. To make deliveries or pick-ups, businesses have to be located on or near the line, or there must be transfer stations along the line, where goods can be transferred from trains to trucks or vice versa. Most businesses use the second option.

For faster transfer rates, freight trains frequently use container cars that can be quickly lifted on and off trains and connected to a truck. This ability to switch easily from train to truck is known as “intermodal connectivity.” To best utilize space, two containers are stacked on one car; this is called “double stack” in the industry. A cross-country train might tow a hundred double-stacked cars; it’s a rarity to see double-stacked freight in southern New Hampshire for two reasons: there is no intermodal station to unload the containers in the state (there are ones in Worcester and Ayer, Mass., and Auburn, Maine); and most rail lines in the state can’t service double-stack cars, as many of the bridges are too low for clearance. Not having the clearance means that freight has to be switched or moved if it were to be delivered in the state, costing time and money on the shipment. The St. Lawrence & Atlantic Line that runs from Vermont to Maine via Berlin, N.H., is the only line in the state that has double-stack clearance. But this is not only a New Hampshire issue, it’s a regional issue. Boston and other parts of the region aren’t yet suited for double-stack clearance either.

Another issue for many tracks and bridges is the weight of the new freight cars. In order to ship more stuff with fewer cars, freight companies now use cars that can hold 286,000 pounds apiece, up 23,000 pounds from the old standard for which many of the state’s lines were built. Tracks would need to be upgraded and bridges retrofitted to handle the additional weight.

There are also freight issues out of state that affect freight in New Hampshire. In the New York area, there are bottleneck issues on rail lines as passengers and freight compete for service around the nation’s biggest cities; these bottlenecks can stop or slow the movement of product significantly. Companies that demand time-sensitive deliveries might choose trucks instead.

It would require significant capital and time to make a high-quality freight system in the state a reality. And while freight business may be booming in other parts of the country, New Hampshire isn’t one of them — at least not yet.

Dearness has 12 customers, mostly between Manchester and Concord though he also leases the Concord-Lincoln Line from the state. He estimates that he’ll pick up a new customer every three to four years from the initial inquiry of a possible customer to when pick-ups and deliveries start. There may need to be infrastructure improvements made to tracks, creating branch lines to businesses. And there isn’t much land available near the tracks for businesses to relocate.

“Rail is difficult, especially in New England, for time-sensitive deliveries,” Dearness said. “The Interstate system is so encompassing in New England.”

After he first started operating in the early 1980s, he worked for years to build his customers, only to lose many of them when the Boston and Maine’s union had two consecutive strikes that forced shippers to use trucks instead. Many of those businesses never returned.

“It’s not a dead or dying industry,” he said. “It’s just difficult to compete with trucks.”

All aboard?
Richard Varney, CEO of Monadnock Paper in Bennington, would love to ship by train. In the past, he did.

But years ago, Boston and Maine cut its service to Varney on the Hillsboro Branch of the Main Line, which terminated in about a mile from Monadnock Paper. The state now owns the line, leasing it to Peter Leishman, who operates the Milford-Bennington Railroad, a short line that moves quarried rock at the edge of Wilton to Granite State Concrete in Milford for processing.

Varney has refitted his shipping area to work with trucks. It would be costly to change back, and he’s not sure he would get reliable service. Would the train again cut service in the future?

“It’s killing us right now,” Varney said about shipping by truck. “The truckers keep raising the fuel charges every month, and it’s very difficult to pass it on to our customers. It’s a tough business climate right now.”

“In an ideal world, we’d love to have rail service,” he said.

Dearness, who has four years left on his lease of the state-owned Concord-Lincoln Line, faces significant challenges in the near future to stay profitable. He used to have business north of Concord, but many of those customers have either left or gone out of business. He’s had a lease with Boston and Maine to use the tracks from Concord to Manchester to pick up and make deliveries for the bigger rail companies since the 1980s.

Pan Am Railways (then called Guilford Rail System), which bought Boston and Maine, announced last year it was terminating its lease with New England Southern. Dearness is litigating, as he says he is owed money by Pan Am. While in litigation, he still is able to operate his business on their tracks. But he’s resigned that at some point in the near future, many of the customers he’s worked to build for years will be gone once more.

He’s working on the tracks north of Concord, getting them ready for more travel, as he works to build a clientèle base once again. It’s a similar challenge, he thinks, as the St. Lawrence & Atlantic has in the North Country, as much of their business came from the now-closed paper mills.

While it appears there will be no significant increase in freight business in the near future, it also doesn’t appear there will be any decrease. The question is whether a significant capital improvement on the state’s tracks would create enough business to make it worthwhile, for both freight and passenger rail. The good news is that many of the rail lines, even the ones not used, are preserved for future use. And officials say that rail improvements won’t deteriorate quickly.

Or, in the words of Brian Lombard, who works for the state’s department of transportation, “What you do to the tracks lasts a long time.”