Watco Companies

Watco Companies, L.L.C. (Watco) is a transportation company based in Pittsburg, Kansas, formed in 1983 by Charles R. Webb. Watco is composed of four divisions: transportation, mechanical, terminal and port services, and compliance. Watco is the owner of Watco Transportation Services, L.L.C. (WTS), which operates 41 short line railroads in the U.S. and Australia. It is one of the largest short line railroad companies in the United States. As of December 2018, it operated on 5,500 miles (8,900 km) of leased and owned track. Also under transportation is the contract switching the company provides service for 30 customers. That is the service that Watco originally offered before it branched out into other areas.

Watco Transportation Services, L.L.C.

Overview
Headquarters	Pittsburg, Kansas
Dates of operation	1983–
Technical
Track gauge	4 ft 8 ^1⁄2 in (1,435 mm) standard gauge
Length	4,500 track miles

Watco’s mechanical division has 19 car repair shops and is one of the largest mechanical services provider in the United States. They provide program, contract and emergency repairs. These services include maintenance of all types of cars including tank cars and coal fleets, and the preparation and cleaning of boxcars and refrigerated cars.

The terminal and port services division operates ten warehouses throughout the country. They also operate several transloading facilities and specialize in loading and unloading railcars and moving commodities to their next destination.

Watco also operates two port services in the Gulf Region. Greens Port Terminal on the Houston Ship Channel in Harris County, Texas and Port Birmingham Terminal on the Black Warrior River in Alabama both provide access to the Gulf of Mexico.

Watco's newest division, Watco Supply Chain Services, provides supply chain logistics for highway, intermodal, rail, and international logistics.   

History

CBH class hauled train at Yilliminning, Western Australia in October 2013

Watco CF7 #5 at Pittsburg, Texas in August 2015

Watco Companies was started in 1983 by Charles R. "Dick" Webb. The first operation was an industrial switching operation in DeRidder, Louisiana, that is still in existence. Webb then started his first mechanical operation, a railcar repair shop in Coffeyville, Kansas in 1985.

The Coffeyville mechanical shop was held captive to the major rail lines, and during discussions with the Union Pacific the opportunity arose to purchase the line running from Nevada, Missouri, to Coffeyville. This was the Union Pacific’s first short line sale. Watco then looked to the West Region, acquiring the Blue Mountain Railroad in 1998, the Palouse River and Coulee City Railroad in 1992 and the Eastern Idaho Railroad in 1993.

In 1998, they began operating the Stillwater Central Railroad in Oklahoma and the Timber Rock Railroad in Texas. The Kansas and Oklahoma Railroad was acquired in 2001 and the Pennsylvania Southwestern Railroad in 2003. In 2004, they started operations of the Great Northwest Railroad in Washington, the Kaw River in Kansas and Missouri, and the Mission Mountain Railroad in Montana. In 2005 they began operating the Alabama Southern Railroad, the Louisiana Southern Railroad, the Mississippi Southern Railroad, and the Yellowstone Valley Railroad in Montana. The Austin Western Railroad was started in 2007 and shares rail with passenger rail. They also acquired Millennium Rail, Inc., a mechanical service company in 2007. The Baton Rouge Southern and the Pacific Sun Railroad were started in 2008, and they also acquired the mechanical services company Fitzgerald Railcar Services, Inc., and Reload, Inc., a 25-year experienced transloading business. The Grand Elk Railroad began operations in 2009.

In December 2010 Watco entered the Australian rail haulage market when it was awarded a 10-year contract to operate grain services for the CBH Group of Western Australia.[1][2] Operations commenced in March 2012.[3][4] In late 2016 Watco Australia was awarded an infrastructure train contract with Brookfield Rail operating ballast and rail work trains.

On December 15, 2010, Kinder Morgan Energy Partners, L.P. NYSE: KMP announced an agreement whereby Kinder Morgan will invest up to $150 million over the next year in Watco Companies in exchange for a preferred equity position in the company. Kinder Morgan made an initial $50 million preferred shares investment on January 3, 2011.[5] Additional $50 million equity investment completed in December 2011.[6] Kinder Morgan will receive 3.25% quarterly distribution on the equity investment. Kinder Morgan is a leading pipeline transportation and energy storage company in North America. The transaction provides capital to Watco for further expansion of specific projects and offers Kinder Morgan the opportunity to share in the subsequent growth.

In April 2011, Watco began operating the Autauga Northern Railroad (AUT), between Maplesville and Autauga Creek, Alabama, the third short line in Alabama operated by Watco.[7]

On December 28, 2011 Watco began operations of the Swan Ranch Railroad (SRRR)[8] in the Swan Ranch Industrial Park in Cheyenne, Wyoming. On January 1, 2012, Watco gained majority ownership of the Wisconsin and Southern Railroad, a regional railroad in Wisconsin, and on February 1, 2012 took over operations of the Birmingham Southern Railroad.[9][10]

On June 4, 2014, Watco and The Greenbrier Companies, Inc NYSE: GBX announced that they will create an equally owned joint venture, GBW Railcar Services, LLC, providing the railcar repair services.[11] This joint venture was dissolved in August 2018.

Holdings

Railroad	Began operations	Track length (mi.)	Commodities	Facts
Alabama Southern Railroad (ABS)	November 2005	85 [12]	iron and steel, paper products, aggregates	Acquired through lease agreement with KCS
Alabama Warrior Railway (ABWR)	August 2009	15 [13]	coal, aggregates, pipe, scrap steel, cement	Started as Marylee Railroad in 1895
Ann Arbor Railroad (AA)	January 2013	50 [14]	automotive materials	Purchased from Ann Arbor Acquisition Corp, services mostly Chrysler plant producing Jeep Cherokees
Arkansas Southern Railroad (ARS)	October 2005	62 [15]	corn and soybean products	Two branches, 32-mile northern branch and a 30-mile southern branch
Austin Western Railroad (AWRR)	October 2007	155 [16][17]	aggregates, crushed limestone, calcium bicarbonate, lumber beer, chemicals, plastic, paper	Began sharing the railway with commuter operations in 2010 with Austin, TX
Autauga Northern Railroad (AUT)	April 2011	44 [18][19]	paper products and aggregates	Third shortline Watco acquired in Alabama
Baton Rouge Southern Railroad (BRS)	November 2008	1.5[20]	chemicals, bauxite, plastic pellets, raw coke, calcinated coke	Provides car storage and use by local chemical companies
Bogalusa Bayou Railroad (BBAY)	2015	xxx	paper	Serves Bogalusa’s International Paper
Birmingham Terminal Railway (BHRR)	February 2012	75.9 [21]	iron ore, coal, steel sheets and pipe	The dragon in the logo represents the fire that is used to smelt steel
Blue Ridge Southern Railroad (BLU)	July 2014	93	woodchips, chemicals, paper, cement	Former Norfolk Southern T-Line (Murphy Branch), W-Line, and TR-line. Based in Canton, NC.
Boise Valley Railroad (BVRR)	November 2009	36[20]	frozen vegetables, lumber, fertilizer, fuels	Shares customers with the YSVR and EIRR
Decatur & Eastern Illinois Railroad (DREI)	September 2018[22]	127[22]		Operates on ex-CSX Transportation trackage acquired in 2018
Eastern Idaho Railroad (EIRR)	1993	270[23]	corn, sugar, wheat, frozen vegetables, coal	Largest Union Pacific sale
Ithaca Central Railroad (ITHR)	December 8, 2018	48,8[24]	salt, coal, plastics, magnesium chloride	Leased from Norfolk Southern
Grand Elk Railroad (GDLK)	March 2009	151[25]	lumber products, corn, steel	Interchanges with 3 Class I railroads
Great Northwest Railroad (GRNW)	March 2004	77 [26][27]	lumber, products, fertilizers, aggregates	Competition to reach Lewiston while the line was being built was called the "Clearwater River Railroad Wars"
Kanawha River Railroad (KNWA)	July 2016	309 [28]	Chemicals, Aggregates, Agricultural Products[28]	Second railroad to be acquired by Watco, LLC in the state of West Virginia. Appalachian & Ohio was briefly operated by Watco Transportation Services LLC. Operates on former Norfolk Southern tracks in Ohio and West Virginia.
Kansas & Oklahoma Railroad (KO)	July 2001	820 [29][30]	wheat, grain products, chemicals, soybean products	Has state and federal shipping agreements
Kansas City Terminal Railway (KCT)	xxx	xxx	Transfer service and scrap hauler	Kansas City area
Kaw River Railroad (KAW)	June 2004	43 [31][32]	iron and steel, corn starch, lumber products, aggregates, plastics, industrial products	Expansions in 2005, 2006, and 2007
Louisiana Southern Railroad (LAS)	September 2005	167 [33][34]	paper products, aggregates, oils	Interchanges at Gibsland, Sibley, and Pineville
Mission Mountain Railroad (MMT)	December 2004	40 [35][36]	lumber, wheat	Originally part of the Haskell Pass, built in 1904
Mississippi Southern Railroad (MSR)	April 2005	28[37][38]	corn and soybeans	Interchanges with KCS at Newton
Pacific Sun Railroad (PSRR)	October 2008	62[39]	corn, soy, lumber, plastic pellets, beer, paints, recyclables	Crews accommodate the schedules of BNSF, coaster, Amtrak and Metro link passenger trains
Palouse River & Coulee City Railroad (PCC)	1992	202 [40]	wheat, frozen vegetables	$25 million in state-sponsored track rehabilitation backed by 100-year lease
Pennsylvania Southwestern Railroad (PSWR)	April 2003	12[41][42]	steel scrap, steel products	First Watco operation to service a steel mill
Pecos Valley Southern Railway (PVSR)	2012	19	sand, gravel, crude oil	Formerly operated by Capitol Aggregates
San Antonio Central Railway (SAC)	2012	xxx	xxx	Operates within Port San Antonio’s East Kelly Railport at night
South Kansas and Oklahoma Railroad (SKOL)	March 1987	380 [43]	grains, cement, coal, fertilizer, aggregates, steel, sand	Operates out of the historic Cherryvale Depot
Stillwater Central Railroad (SLWC)	1998	279 [43]	crude oil, sand, gypsum, cement, stone, steel	Higher than industry average rating of customer service and personal attention
Swan Ranch Railroad (SRRR)	December 2011	3.25 [44]	asphalt	When finished, the Swan Ranch Industrial Park will encompass 7,200 acres
Timber Rock Railroad (TIBR)	1998	168 [45]	aggregates, lumber products, plastics, fuel	Additions in 2002 and 2004; services the founding operation site in DeRidder, LA
Vicksburg Southern Railroad (VSOR)	January 2006	21[46][47]	lumber, steel	Formerly known as the Redwood Branch
Watco Australia	May 2012	NA - operator only	grain	First international operation of Watco
Wisconsin & Southern Railroad Co. (WSOR)	January 2012	700 [48]	lumber, coal, liquid and dry fertilizers, corn, beans, plastic, aggregates, ethanol, liquid petroleum	Wisconsin's second-largest railroad
Yellowstone Valley Railroad (YSVR)	August 2005	172 [49][50]	grains, plastics, ethanol, crude oil, sand	Awarded BNSF Shortline Achievement Award for development of Customers in 2009

References

1. US group wins CBH contract from QR National The Australian December 14, 2010
2. Watco wins CBH grain rail contract Archived 2014-02-03 at the Wayback Machine Rail Express December 15, 2010
3. CBH, Watco rail agreement starts early Archived 2014-02-22 at the Wayback Machine World Grain April 2, 2012
4. CBH grain wagons go to work early Archived 2014-02-22 at the Wayback Machine Farm Weekly April 5, 2012
5. "Kinder Morgan, Inc, Form 10-K, Annual Report, Filing Date Mar 2, 2011". secdatabase.com. Retrieved May 13, 2018.
6. "Kinder Morgan, Inc, Form 10-K, Annual Report, Filing Date Feb 23, 2012" (PDF). secdatabase.com. Retrieved May 13, 2018.
7. "Watco announces Alabama short line debut". Railway Age. 12 April 2011. Archived from the original on 6 December 2011. Retrieved 6 December 2011.
8. "Watco to operate Swan Ranch Railroad in Wyoming". Trains Magazine. 30 November 2011. Retrieved 23 December 2011.
9. "Watco to buy control of Wisconsin & Southern". Trains Magazine. 29 November 2011. Retrieved 23 December 2011.
10. "Watco adds third railroad in a week". Trains Magazine. 2 December 2011. Retrieved 23 December 2011.
11. "Greenbrier Companies, Inc, Form 8-K, Current Report, Filing Date Jun 4, 2014". secdatabase.com. Retrieved May 13, 2018.
12. Alabama Southern Railroad, accessed June 2012
13. STB Finance Docket No. 35204, June 2012
14. , accessed May 2014
15. STB Finance Docket No. 34761, October 26, 2005
16. Railroad Retirement Board, Employer Status Determination: Austin Western Railroad, Inc., January 22, 2008
17. STB Finance Docket No. 35075, September 14, 2007
18. Railroad Retirement Board, Employer Status Determination: Autauga Northern Railroad, Inc., April 14, 2011
19. STB Finance Docket No. 35075, April 4, 2011
20. STB Finance Docket No. 35169, August 1, 2008
21. "Birmingham Southern railway acquired". www.bizjournals.com. December 2, 2012. Missing or empty |url= (help)
22. "Decatur & Eastern Illinois makes debut". Trains Magazine. September 10, 2018. Retrieved September 10, 2018.
23. STB Finance Docket No. 34045, June 12, 2001
24. "Ithaca Central Railroad (ITHR)". Watco Companies. 2018. Retrieved 2018-12-13. Ithaca Central Railroad (ITHR) begins operations on December 8, 2018. Watco leases the railroad from the Norfolk Southern Railway. The ITHR consists of 48.8 miles of track running north from Sayre, Pennsylvania, to Ludlowville, New York
25. STB Finance Docket No. 35188, November 17, 2008
26. Railroad Retirement Board, Employer Status Determination: Great Northwest Railroad, Inc., July 9, 2004
27. STB Finance Docket No. 34475, March 19, 2004
28. "Kanawha River Railroad (KNWA)".
29. Kansas and Oklahoma Railroad Archived 2008-12-24 at the Wayback Machine, accessed December 2008
30. STB Finance Docket No. 34042, June 12, 2001
31. Kaw River Railroad Archived 2012-08-12 at the Wayback Machine, accessed December 2008
32. STB Finance Docket No. 34510, June 24, 2004
33. Louisiana Southern Railroad, accessed December 2008
34. STB Finance Docket No. 34752, October 7, 2005
35. Mission Mountain Railroad, accessed December 2008
36. OpenDocument STB Finance Docket No. 34635, January 19, 2005
37. Mississippi Southern Railroad, accessed December 2008
38. STB Finance Docket No. 34683, April 21, 2005
39. STB Finance Docket No. 35174, October 3, 2008
40. "Home". Port of Columbia. Retrieved 2019-10-24.
41. Pennsylvania Southwestern Railroad, accessed December 2008
42. STB Finance Docket No. 34329, April 24, 2003
43. "Short Line Railroads". www.up.com.
45. "Archived copy". Archived from the original on 2010-10-18. Retrieved 2012-06-18.CS1 maint: archived copy as title (link)
46. Vicksburg Southern Railroad, accessed December 2008
47. STB Finance Docket No. 34766, January 13, 2006
48. "Wisconsin & Southern Railroad being purchased by Kansas company". www.jsonline.com.
49. Yellowstone Valley Railroad, accessed December 2008
50. STB Finance Docket No. 34736, September 1, 2005

External links

• Official website