Some people live out their dream of running a small business by buying a restaurant or a bed-and-breakfast. Alan Maples bought a railroad.
“People say, `You own what?’ ” says the 35-year-old president of Everett Railroad Co., which hauls such cargo as scrap paper and wood pulp to little factory towns in central Pennsylvania. The company’s assets: three aging locomotives, a crew of 10 and a 25-mile track that townsfolk park on. “They’re not aware we’re even there,” Maples says.
Tiny railroads such as the Everett are popping up all over the country, reviving a century-old American tradition. Instead of operating between major cities, more than 500 lines ship freight to businesses and farmers in small towns, usually as a link to long-distance carriers. It’s a market major railroads have been abandoning but a curious breed of die-hard rail buffs and entrepreneurs has turned into a $3 billion-a-year business.
The lines have revived or kept alive nearly 50,000 miles of track, a third of the country’s track. Much of it had been classified in the 1980s as “surplus” by the big railroads and would have become hiking trails. But short-line operators saw a chance to buy the routes cheap, and rely on less expensive labor and equipment to keep freight fees down. They also saw a need for what locals say they never got from the big railroads: personalized service.
“The little guys are just doing a better job with these lines. They’re more aggressive,” says William Rennicke, vice president of Mercer Management Consulting Inc., in Lexington, Mass., who calls the short-line revival “a classic case” of entrepreneurship outdueling big business.
Still, running a railroad is peculiar. Minor derailments and other accidents recur, and “it’s a lot more expensive to rerail cars when you can’t pick them up with your hand” like toys, says Edward Lewis, editor of the American Short Line Railway Guide.
Homeowners often complain about train noise and fight efforts to reopen more track. At the North Shore Railroad in Northumberland, Pa., operator Robert Robey says one resident kept asking whether her son could ride his dirt bike along the tracks. “I said, `Lady, do you want me driving my trains in your driveway?’ ” he recalls.
A former stage manager for a magic show and part-time tax preparer, Maples was one of the first people to get into the short-line business. At 22, he bought the first eight miles of the Everett for about $50,000, using money he had saved and money his grandfather had set aside for college. (He still hasn’t gone.)
He thinks short lines are becoming such a rage now because the big railroads, following a wave of mergers, are selling off tracks. In the West, Burlington Northern Santa Fe Corp. has 4,000 miles of track on the block; in the East, Conrail Inc. has sold more than 1,000 miles in a year, most of it little clusters of lines.
Such sales, he says, are just too hard for railroad aficionados like himself to pass up. Maples has accumulated timetables and history books on the great rail barons and had a Lionel train set as a child. “I can’t explain it. The railroad business just gets into your blood,” he says.
His short line, which he expanded to 25 miles in 1995, is a Y-shape system that splits in Brookes No Mills, Pa., (population about 30) and makes five stops along a picturesque ridge of mountains and farmland. Once prosperous, the towns make do with a hodgepodge of businesses, from a warehouse that stores propane gas to Roaring Spring Blank Book Co., whose name appears on millions of school notebooks throughout the U.S.
For years, Conrail ran the line, alienating many of these businesses by delivering goods late and cutting service to just twice a week. (A Conrail spokesman says the railroad needed to focus on more profitable operations.)
“It was pathetic. You were at their mercy,” says Drusan Bithell, shipping coordinator for Appleton Papers Inc. in Roaring Spring. Appleton relies on the Everett for the local portion of shipments of wood pulp from Canada and other raw materials from Georgia. The fee is an average of about $300 per carload for the local part of the trip, close to what Conrail charged but “with a lot more deliveries,” says Bithell.
Maples can do this because he has low overhead and uses nonunion employees, who make 40 percent less than major rail line workers. Work rules, an enormous cost issue for big railroads because they limit what functions workers can perform, don’t exist at this level. But one of his biggest savings comes from scavenging at salvage yards for the equipment–engines, steel rails, wooden cross ties–his line needs.
All three of the Everett’s locomotives are from the 1950s and 1970s, with one painted in the faded black and yellow of original owner, Seaboard Coast Line. “I’d be out of business if we had to buy everything new,” Maples says.
On a recent day, riding the train, he faced the kinds of headaches all tiny-railroad operators do: A locomotive pulling a nine-car shipment of scrap paper and wood pulp couldn’t make it up a hill outside Roaring Spring because the load was too heavy. Scratching his head, the train’s engineer decided to uncouple two of the cars, sending the other seven ahead. Later, when the train moved through Roaring Spring, Maples had to hop off the locomotive and direct traffic at a railroad crossing. Most rural crossings have no signal warnings, and motorists have crashed into Everett trains twice.
Weather is a much bigger liability for a tiny railroad. Last year, a flood after a heavy rainstorm washed out a half-mile section of track and damaged another two miles, and the repairs alone cost more than $70,000. Smaller floods have forced Maples to call the local game commission to complain about beavers building dams near his tracks.
In the end, Maples probably will never make millions. Last year, the Everett earned about $50,000 on $1 million in revenue. He tried to entertain customers with luncheon trips, but the roof on his one passenger car leaks, and it hasn’t been used. If he makes any big profits this year, Maples says, he will plow them back into the freight business, which he never seems to stop thinking about.
Indeed, on a late January evening, he trudges through a half-foot of snow in Hollidaysburg, Pa., to switch tracks for an approaching freight train.
“Oh, how I hate snow,” says Maples. But he has a change of heart when he remembers that an important commodity for the Everett to haul is road salt. “One good thing about snow is they dump a lot of salt on the roads.”
