- Associated Press - Monday, March 14, 2016

PRINEVILLE, Ore. (AP) - Business is heating up at Prineville’s Railway and Freight Depot.

In the next couple of months, a new deal the railway struck last year with a transport services company will give the short-line railroad the equipment to heat liquid to scorching temperatures. The new boiler, a machine that can make the most viscous liquids watery with heat, will allow for unloading and loading of liquid products that haven’t been able to move in and out of Central Oregon before.

Superior Bulk Cargo, the Chicago-based company that will own and operate the boiler at the freight depot north of Redmond where the Prineville Railway’s tracks tie in to the main north-south line, is setting up its facilities now. And when the boiler goes online later this spring, Superior Vice President of Operations Steve Lowman said the railway will be able to move a completely new kind of product.

“The rail car will arrive to the site transporting a liquid, and then we’ll hook the boiler up to the car and we’ll heat it using steam,” he said. “We’ll heat it, maintain it and transload the product from the rail cars to trucks. Think thicker-based products. Syrup, molasses, that kind of thing. If it’s thick, it flows very slowly, so as you heat it up it flows easier.”

Add that new liquid product to the various goods the railway already moves, and the oldest municipal-owned railroad in the country is on track for a record year, Operations Director Matt Wiederholt said.



“Our car count is going up; we’re having a stellar year,” he said. “Right now, we’re over where we were the whole year last year, and we still have four more months. We should beat last fiscal year by at least 300 carloads.”

The projected year-end total for carloads is 874, a roughly 50 percent increase from 583 in 2014-15, according to the railway’s numbers. Projected revenue shows a similar success story. The railway expects to bring in $839,600 by the end of the year, a 42 percent increase from the $590,366 it brought in last year.

It’s a big turnaround from about a decade ago, Wiederholt said.

Back in 2004, the railroad wasn’t making enough money to sustain itself and was eating away at the slush fund it had built up in the 1960s, when the local logging industry made the railroad so successful the people of Prineville didn’t have to pay taxes.

“We were not operationally viable,” said Wiederholt, who the city hired for the job in 2004. “We were milking money out of that slush fund. The city considered shutting (the railway) down.”

But instead of closing the doors on the railway, built nearly a hundred years ago in 1918, it decided to invest instead. Using the slush fund money, the city built 133,000 square feet of warehouse space, which allowed customers to unload and load cargo on-site, and even set up shop on the premises.

The two clients and 80 carloads the railroad had in 2004 - a low point, Wiederholt said - began to turn around. Now with 32 service agreements, more freight depot built in 2013 and the ability to move new kinds of product with the boiler, Wiederholt said it nearly feels like the 1960s again.

The boom can be traced directly back to the service agreements, which are contracts the railway’s customers enter into to use its facilities. Customers pay the railway to load and unload the goods they’re bringing into Prineville, as well as for the railway’s warehouse space to store the products.

“We haul everything from tires, lumber, magnesium chloride de-icer, animal feed, diesel - those are our primary commodities right now,” Wiederholt said. “Tires are our biggest shipper right now. Les Schwab - all of their domestic tires come in by rail.”

The fact that the railway is municipal-owned is a benefit to customers, Wiederholt said. While a privately operated railroad is in the business of making money, the Prineville Railway’s priority is supporting the local economy by creating business and jobs. The customers don’t seem to mind.

“The biggest difference is the service,” said Dustin Corwin, Prineville branch manager for Carson, a fuel transport company. “It’s like a corporation versus a mom-and-pop business. That’s how I would compare the two different types of railway. I think Prineville is extremely customer service-oriented.”

Corwin said the company, which began using the railway’s freight depot in July 2015 to unload diesel from railway cars and truck it elsewhere, set up shop in Prineville because the price was right and there was plenty of space. When Wiederholt contacted Carson to pitch the railway’s services, Corwin said the fuel operation jumped on board. And having lived in Central Oregon since 1991, Corwin said he was glad to be involved.

“It’s like that old building in Prineville - the courthouse,” he said. “It’s beautiful and nobody would want see it gone because it’s part of the community. The railroad is like that. It’s a huge part of Prineville and where Prineville came from, so it’s neat to see it doing well. And there’s not many of them around anymore, small railways like this. I’m glad to be a part of it.”

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Information from: The Bulletin, https://www.bendbulletin.com

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