Davenport Industrial Railroad's Berish follows in the footsteps of independent short-line owners
9/15/2023
By Julie Sneider, Senior Associate Editor
Steve Berish says the “gateway drug” for his lifelong love of railroading was Thomas the Tank Engine.
“That’s the cliché, but it’s actually pretty true,” he says. “I was interested in trains all while growing up. Finally — I want to say it was my sophomore year in high school — I decided, ‘Hey, I want to go into railroading somehow.’”
He says “somehow” because he wasn’t yet sure how he would get into the business. But with his dad’s encouragement, the Ohio native decided to study civil engineering at the University of Toledo. He completed some internships working for a railroad construction contractor based in Cleveland; post-graduation, he left Ohio to run the contractor’s South Carolina division.
While he liked the work, he missed his home state. So, a few years later, Berish moved back to Ohio, worked a stint in rail-car repair, then found himself without a job. That was in fall 2019.
On Day No. 2 of unemployment, Berish sat at a table in a Dunkin Donuts in Medina, Ohio, perusing Surface Transportation Board filings, when he read the city of Davenport, Iowa, was looking for a new operator for its short line. He soon called John Howell, a friend and president of NIWX Corp., a locomotive leasing company.
“I’m adamant about independent short lines and trying to survive in the face of all these people calling you on a regular basis to ask if you’re for sale.” — Steve Berish, Davenport Industrial Railroad. Erik Rasmussen“John and I had always talked about trying to find a railroad that we could bid on,” Berish says. “There was a request for bids to operate the short line, and we agreed to work together and put a price in. We did bring in a third partner, who's mainly silent, and we bid on it and won the bid within about two weeks of that [initial] conversation.”
Per their contract with the city, the pair had 67 days to get the Davenport Industrial Railroad (DIR) up and running.
“The previous operator vacated the property and we took over on Jan. 1, 2020,” Berish says. “We ran our first train on Jan. 6, 2020, and we were in business.”
Today, DIR operates on 3 miles of track in the Eastern Iowa Industrial Center on Davenport’s north side. It connects with Canadian Pacific Kansas City in Eldridge, Iowa, and offers freight-rail service, transloading and rail-car storage to customers in the Quad Cities area. Among the commodities it moves are plastic pellets, various chemicals, fertilizer and animal byproducts.
Now the DIR’s co-owner and general manager, Berish has been “pretty much running the railroad’s day-to-day operations with some assistance from John,” he says. Since January 2020, they’ve quickly grown the short-line's business by bringing in some new customers and adding the rail-car storage service.
“We’ve added quite a bit of work to the company,” Berish says. “When COVID hit, I ended up taking a day job with another railroad construction company in Ohio and basically ran DIR on the side. I was traveling out to Iowa [for DIR business] one or two weekends a month for two years.”
By March 2022, when the economy and rail business had recovered from the onset of the pandemic, Berish was able to quit the rail construction job in Ohio and move to Iowa full time to run DIR. He’s now the railroad’s only full-time employee. The DIR employs eight- or nine part-time employees.
Youngest in the industry
Now age 29, Berish is believed to be the youngest owner of a short line or short-line operating company in the United States, according to the American Short Line and Regional Railroad Association (ASLRRA).
“I’ve always wanted to own a short line,” he says.
Over the past couple of years, he’s added to his railroad construction skills by networking with Howell as well as other friends and relatives who’ve worked or continue to work in rail. One friend is Nathaniel Mazo, now the general manager of four OmniTRAX-owned railroads in Ohio. Berish met Mazo through Berish’s cousin Mike Kole, who owned and managed Cleveland Commercial Railroad (CCRL) until CCRL and its sister company Cleveland Harbor Belt Railway (CHB) was sold to Omnitrax in 2019. Berish and Kole “would always talk railroads” when they met at family functions, he says. Kole had hired Mazo as a conductor at CCRL.
In 2022, Mazo received the ASLRRA’s Safety Person of the Year Award.
“Nate really kind of took me under his wing and said, ‘Here's how short-line railroading works.’ I like to tell people he showed me how the clock ticked. Once I understood how a short line makes money and how it functions from a business sense, I was hooked.”
Berish also has networked with other short-line railroaders through the ASLRRA, and is active in the association’s relatively new Young Professionals Committee. Through the association, he’s gotten to know or become familiar with some of the independent short-line railroaders who’ve blazed trails before him. Among those who’ve inspired Berish is Alan Maples, owner and president of the Everett Railroad Co. in Hollidaysburg, Pennsylvania. Like Berish is today, Maples was the industry’s youngest railroad owner when, at age 21, he bought the Everett Railroad, now a freight carrier and tourist excursion railroad, in the early 1980s.
Maples grew up in Montgomery County, Maryland, where as a child he was interested in trains. He decided at an early age that he wanted to go into business for himself.
“In high school I was the one kid who read The Wall Street Journal every day,” says Maples.
After graduation, Maples worked for a heating-and-air-conditioning contractor, where he picked up small-business skills, like how to make payroll, do bookkeeping, pay business taxes and seize on new business opportunities.
In 1982, he came across an opportunity to buy a 4-mile railroad for a modest price, using some of the funds his parents had saved for his college education.
“My parents had set aside some money for me to go to college, and when I made it clear that I was going to go into business instead of going to college, they allowed me to have access to some of those funds,” Maples explains. “They figured they would let me try my hand at investing in that, so that’s what I did.”
Recession, Staggers Act created opportunities
At the time, the nation was in a deep recession and the rail industry was in a financial crisis. Due to the Staggers Act of 1980 and the recession, large railroads were shedding unprofitable rail lines, leaving shippers without rail service. But Maples saw an opportunity to buy up shorter lines and restart service for a number of those customers.
Founded in 1954, the Everett Railroad had been abandoned in 1982 and moved from the town of Everett, Pennsylvania, to Blair County. By 1984, Maples was able to make the first train run — a load of bauxite ore — on behalf of a customer. Over the years, he continued to buy up lines as they became available. In 2015, Everett Railroad Co. branched out and started a passenger-rail excursion business.
Maples remains the sole owner of the company, which operates on 22 miles of railroad and connects with Norfolk Southern Railway in Hollidaysburg. The company serves about 10 freight customers “of varying sizes,” employs 10 people full time and a number of part-timers on the seasonal passenger-excursion service.
“I never had any business partners, which is one reason we stayed small,” says Maples. “I wanted to keep it small and simple.” At 61, he still enjoys the day-to-day challenges that come with running a short-line business.
“It’s an engaging business,” he says. “I’m a train buff, I freely admit it. But there is no question that there have always been good business opportunities. That’s what I felt back then [at 21] and I’d say, 40 years later, the experiment is still alive.”
While they’re a generation apart, both Maples and Berish acknowledge they’re becoming increasingly rare in an industry where large holding companies and hedge-fund-backed businesses are buying up small and regional railroads.
“There’s not a lot of us small independents left in this industry because of the consolidation,” says Maples, who uses his current position as chair of the ASLRRA’s Small Railroad Committee to stay in touch with smaller lines and independents to “make sure they have a voice in the association.” He’s also on ASLRRA’s Executive Committee.
Maples says it’s gratifying to see the association start a Young Professionals Committee to help encourage younger generations — like Berish — to consider short-line railroading as a career.
As he charts out his own career, Berish hopes to follow Maples’ example of remaining an independent railroad owner and operator. He describes himself as “fiercely independent” and “a workaholic by nature.” His goal for the near future includes growing DIR to the “best of our ability,” and then pursuing “slow and steady growth” through small acquisitions.
“I have some pretty decent funding, but I don’t have millions and millions of dollars to bid against the big hedge-fund-backed companies,” Berish says. “I’d like to focus on the small stuff and build a portfolio of a couple of railroad operations, contract switching operations, transload centers — that type of stuff.”
Berish says he relishes the role of running his own show.
“I’m adamant about independent short lines and trying to survive in the face of all these people calling you on a regular basis to ask if you’re for sale,” he adds.
