Bouyed by a resurgence in the shipping market, Connecticut Southern Railroad spent $1.4 million acquiring and building a new facility to give its workers cover, raise revenue and create a permanent Hartford location.
The operator of 79 railroad miles through central Connecticut operated out of a rented East Hartford outdoor facility for 16 years, but in January the company moved into its new location on Windsor Street in the capital city. It hopes for a payback on its investment in as little as four years.
"The biggest benefit of having this is that we are permanent now. Before we always rented," said James Bonner, general manager for Connecticut Southern Railroad, or CSO.
CSO was founded in 1996 after deregulation of the rail industry in 1980 led to the major railroads breaking off portions of their operations. The company's biggest business is hauling freight for major railroader CSX Corp. from the CSX yard in New Haven to its yard in West Springfield. CSO hauls along the Amtrak line that bisects Connecticut.
CSO also services 35 customers down the center of the state. The company moves lumber for Transport Logistics Corp. of Manchester, steel for Anastasio & Sons of New Haven, carbon dioxide for Esquire Gas Products of Enfield, hardware for Home Depot in Bloomfield and construction and debris to landfills in Ohio.
"It is a good diversity. We are very fortunate in that regard," Bonner said.
CSO, a subsidiary of Rail America in Jacksonville, Fla., decided to move into a permanent Hartford location after its shipping business picked up again in the past two years, following a dramatic crash in 2008.
The company was hauling 26,000 carloads of freight annually at its peak. In 2008, CSO hauled 23,000 carloads, but following the economic recession, its business dropped by nearly 40 percent.
The Connecticut shipping industry recovered enough in the past two years that the company hauled 20,000 carloads in 2011, making CSO the largest carrier in Connecticut.
CSO is fortunate to be back toward a full recovery as the entire rail shipping industry is still far below its peak levels in 2006, said Holly Arthur, spokeswoman for the national trade group Association of American Railroads.
Shipping of commodities nationally is down due to reductions in coal and grain, two of rail's main shipments, Arthur said.
However, the rail shipment of all other commodities is up 4 percent nationally, and the shipping of containers — known as intermodal freight — is up 3.5 percent, Arthur said.
"There are some positive signs," Arthur said.
CSO took its positives signs to become a permanent fixture on the Hartford landscape.
With a 10,500-square-foot indoor repair facility, the company can conduct inspections and repairs on its seven locomotives, instead of sending them to a facility in Vermont. Paired with a 3,500-square-foot office space, the company's 20 employees don't have to do a lot of the heavy work outdoors, subjected to the elements.
The repair facility can hold four locomotives or rail cars. In addition to repairing CSO's own equipment, employees can fix rail cars and generate new revenue from the owners of those cars.
The company estimates $100,000 in new revenue from those car repairs. CSO also plans to save $120,000 in labor and fuel from not sending locomotives for Vermont repair and $140,000 in not paying rent for its East Hartford facility.
With that $360,000 in savings, CSO hopes to have the $1.4 million in new facility costs paid off by its fourth year in the Hartford location.
The new facility will allow the company to serve customers better by reducing wait times and increasing efficiencies.
"Now we are able to do more work locally," Mark Bromirski, CSO marketing and sales manager.
CSO hopes to grow its business and eventually ship more than its peak years of 26,000 carloads, Bonner said. The company is operating seven days per week, but there is room for growth in volume.
Bonner points out rail is the most cost-efficient and environmentally friendly form of shipment. One rail car holds four times a semi tractor-trailer; one locomotive run by four employees hauls 80-100 cars.
"Railroads are far more fuel-efficient. We are way more manpower efficient," Bonner said.
CSO still doesn't do much outbound traffic from New England as it is largely a consumers market, bringing in goods to be consumed here but not shipping much out to the rest of the country, Bonner said.
Of CSO's business, 70 percent is importing to New England. Even the majority of what is exported is waste sent to Midwest landfills, a byproduct of the consumers market.
"Our bread and butter is anything that is a large commodity," Bromirski said.