Paducah & Louisville leadership change puts Reck on deck for retirement
1/17/2022
By Jeff Stagl, Managing Editor
Have a long conversation with Tony Reck and you’re bound to hear “know what I’m saying” many times. The longtime leader of Paducah & Louisville Railway Inc. (PAL) and its parent P&L Transportation Inc. tends to pepper his remarks with that phrase.
It’s apropos because Reck has come to know quite a bit about railroading, short-line operations, business management and a host of other topics during his more than 52-year career in the rail industry. And after guiding PAL and P&L for nearly 37 years, he came to know something else late last year: It was time to step down as the company’s day-to-day leader.
Reck will turn 73 later this year — not that his age or long railroading tenure figure to slow him down anytime soon. He’ll remain active in the rail industry, and stay very active overall.
From 1988 to 2021’s end, Reck was CEO of P&L and its subsidiary railroads PAL, Evansville Western Railway Inc. (EVWR), Appalachian and Ohio Railroad Inc. (A&O) and Midway Southern Railway Inc. (MWS). PAL is a 280-mile regional operating in Kentucky that interchanges with BNSF Railway Co., CN, CSX and Norfolk Southern Railway; A&O is a 158-mile short line operating in West Virginia that interchanges with CSX and three other short lines; EVWR is a 124-mile short line operating in Indiana and Illinois that interchanges with BNSF, CSX, NS and UP; and MWS is a small short line that serves CSX’s intermodal terminal in Bedford Park, Illinois.
Garrett — who's served PAL and P&L for more than 34 years — assumed the CEO post on Jan. 1. P&L Transportation Inc. Reck now serves as P&L’s chairman. The leadership change is a natural line of succession and sets him up for retirement, Reck says.
“I figure to be chairman at least through the end of this year, and maybe a bit longer. It’s a good place to come to an end,” he says.
Most of the people he worked with over the years at PAL and P&L are gone, many of whom have been replaced by younger workers, says Reck.
“The industry is changing,” he says.
But P&L hasn’t changed its approach to conducting business much over the past three-plus decades. The private company — which also manages intermodal and transload operations — strives to remain private. The firm only issues a press release on rare occasions, and doesn’t provide any operational or financial information.
“We prefer to keep to ourselves. We have accomplished a lot, but there are no reasons to brag about it,” says Reck. “We have tried to not to run this company as a railroad, but as a business.”
Reck has pursued the knowledge and experience of running a business since he began his railroading career with the Illinois Central Railroad Co. (IC) as a brakeman in 1968. He joined IC’s management team after college and held a variety of marketing department positions.
In 1986, Reck joined the newly formed PAL’s management team as vice president of marketing and sales. He became president and CEO just two years later.
Throughout his P&L career, Reck helped the company grow from a single railroad operating in Kentucky to six subsidiaries despite occasional economic downturns.
His 18 years of railroading experience prior to joining PAL — which included heavy exposure to sales, marketing, operations and other key departments — was beneficial to draw from during his CEO tenure, Reck believes. He later gained knowledge in maintenance-of-way, mechanical and other departments.
The payoff for Reck: P&L hasn’t had a bad year in terms of finances and operations, and has been debt-free since 2005. COVID-19 led to P&L’s first-ever job and cost cuts in 2020, but the company has since bounced back strong.
“Even when 2020 was bad, it wasn’t that bad compared with other railroads. We have been fairly steady and consistent,” says Reck.
Since P&L acquired the EVWR in 2005, the company’s annual carloads have nearly quadrupled from 55,000 to more than 200,000.
“And then you still need to move all those empties,” says Reck, referring to the challenge of ensuring operations keep up with rapid traffic growth.
PAL alone handles about 150,000 carloads annually. The regional’s lines are compatible for 286,000-pound rail cars and feature continuous-welded rail and centralized traffic control.
PAL mostly moves coal and chemicals, but also transports auto frames, crushed limestone, lumber, and food and agricultural products. The regional serves Muhlenberg County Coal Resources Inc.’s Pride Mine in Central City, Kentucky, and Warrior Coal LLC’s Cardinal Mine near Madisonville, Kentucky, which rank among the Midwest’s largest production coal mines.
Paducah & Louisville Railway serves two Kentucky mines that rank among the Midwest’s largest production coal mines. P&L Transportation Inc. Now, Tom Garrett leads P&L as president and CEO. He has served as president since 2010.
Garrett, 67, began his railroading career in 1987 as general counsel for PAL and since has held a number of management positions with the company and its subsidiaries, including vice president and executive VP. He has worked with Reck for more than 34 years.
“Tom’s a lawyer, so he's more technical. I always said he’s the brains and I’m the personality,” says Reck.
In the not-too-distant future, Garrett and Reck — who own stakes in P&L — expect to depart the company at the same time. CSX also retains partial ownership and three of P&L’s seven board seats.
CSX eventually will buy out Garrett’s and Reck’s shares, which will lead to board and leadership changes, says Reck. There is a succession plan in place, he adds.
When the time comes to depart P&L, Reck will miss putting deals together, such as the acquisition of EVWR and landing several bulk terminals, warehouses and transload facilities along PAL’s lines. He’s counting on what he characterizes as the company’s “good young team” to keep the deals coming.
His advice to them and other youthful managers in the rail industry: go at it hard, log long days and expect unpredictable work hours since railroading is a 24/7 outdoor business.
“I would tell them to embrace that and put the time in,” says Reck.
