Keeping the rails busy with diversification
The City of Prineville Railway (COPR) is the oldest continuously operated municipal short line in the United States, but the staff has also demonstrated the ability to be diverse and resilient.
Although COPR has been working toward being more diversified in the past five years, the last year has been a real test in multiplicity. According to Railway Operations Manager Matt Wiederholt, the beginning of the pandemic in 2020 was initially a time of anxiety.
"We saw, from the railroad standpoint, when this all hit a year ago—it was like a switch overnight," commented Wiederholt. "Our rail traffic, like commodity traffic—just overnight went to at least 50%. We got nervous right off the bat."
He added that they were preparing themselves at the onset of the pandemic, not knowing what to expect. However, as a result of diversification, they picked up several railcar leasing contracts.
"Because we had these contracts in place with these leasing companies, as COVID hit, and we saw our commodity traffic go down, there became a very big demand for the railcar storage side of things," he continued. "Because we were sitting in a position with these leasing companies, we quickly brought in about 400 railcars and put them in storage."
Consequently, even with car haulage down, the increase in railcar leases has resulted in an increase in revenue during COVID. The COPR is a customer-oriented short line railroad operating in Central Oregon between Prineville and Prineville Junction. The railway consists of 18.34 main lines and six miles of yard track and employs four individuals. Formed in 1918, the COPR directly serves industries in Crook County.
The COPR connects with the Burlington Northern Santa Fe and the Union Pacific Railroads at Prineville Junction three miles north of Redmond.
The City of Prineville Railway has become more and more diversified in the past four to five years. Their rail cars have gradually increased from one customer five years ago, to seven over the past year. Normal commodity traffic consists of traffic that comes in for their businesses along their line. They have as many as 53 customers in commodity traffic who utilize their railroad in one aspect or another—whether it be through their warehouse, direct service and switching railcars right into the customer's property.
These accounts were impacted by COVID because manufacturing fell off, and many of the customers did not have access or need the raw materials. Lease cars or railcars belong to a national pool and are out there for anyone to load materials on. When the demand decreases, the cars must have a place to park. The City of Prineville has contracts with the car owners to park the cars until needed, and they get a per car, per day rate.
"A lot of that is we realized we have these industrial spurs that are not being utilized, and we became very aggressive in the last couple of years to find more of these leasing companies that own these rail cars. It's a big part of our business now," added Wiederholt.
Moving forward in 2021
Within the past year, COPR also signed a lease in June 2020 with a pipe company, Krah USA.
"That has been helping with our bottom line, as well. They lease 64,000 square feet at our Prineville Freight Depot facility," Wiederholt noted of their lease with Krah USA.
He added that they also have some things in the works for springtime. They are currently considering a bulk biodiesel facility at Prineville Junction.
"That was a project that was in the works, and then when COVID hit—it is a Canadian Company—and when COVID hit, they shelved it, because of COVID."
In addition, COPR is working with the Prineville campus at the Old Woodgrain Mill. The site has been acquired by Parris Group, an industrial development group that focuses on rehabilitating properties.
The developer specifically bought the property to leverage the previous mill's extensive infrastructure for a large industrial redevelopment campus to benefit the community in bringing back local manufacturing, stimulating economic revitalization and supporting the Prineville local employment market and Crook County rural region. Part of this infrastructure includes rehabbing the old COPR track to and on the property to solicit potential clients and have real access.
"We hope to start some of that rehab work as early as the middle of March."
Wiederholt emphasized that this portion of track has been neglected for the last 20 to 30 years and has not had major work done since 1953.
"That is exciting for us," he went on to say. "That is 55 acres of potential new rail customers possibly, because they are wanting to make that into a campus up there."
On Lamonta Road, COPR finished their first full season with McCall Oil, from Portland. It is an asphalt transfer station—and operates seasonally from March 15 to Nov. 1. Asphalt oil is brought in from Canada, Montana and Texas and it is offloaded for transfer on COPR property. They pick up railcars at Prineville Junction. A large boiler heats up the oil.
The other part of the year, Envirotech Services brings in magnesium chloride for deicer to be brought in by railcar from Utah and offloaded in the COPR yard.
"This is an example of the diversified traffic that we have because you have McCall (Oil), who brings in asphalt oil in the spring/summer months. That about shuts down, and we have Envirotech who brings in deicer in the fall and winter months. It really levels us out and takes those ups and down out of it," concluded Wiederholt.
COPR was recognized for their diversification and awarded Small Business of the Year Award from the Prineville-Crook County Chamber of Commerce in 2020.
City of Prineville railway (COPR)
Contact number: 541-447-6251
Matt Wiederholt, Railway Operations Manager 541-447-6233
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