Some enlightening commentary from the MARS winter meeting stage
1/28/2025
By Jeff Stagl, Managing Editor
The Midwest Association of Rail Shippers held its annual winter meeting in mid-January at the Renaissance Schaumburg Convention Center Hotel in Schaumburg, Illinois.
Attended by nearly 1,000, the event featured five presentations, a luncheon keynote and five smaller breakout sessions on Jan. 15. Following are some intriguing comments from four of the presentations that day.
Industrial Development Panel
Speakers: Christina Bottomley, vice president of business development and real estate for CSX; Ryan Higgins, chief commercial officer for OmniTRAX Inc.; and Paulina San Millan, senior VP of business development for Intersect Illinois (a statewide economic development organization)
Moderator: Chuck Baker, president of the American Short Line and Regional Railroad Association
Baker first explained how industrial development has grown in importance in the rail industry to attract non-rail users and build traffic. He then asked the panel members to describe how their industrial development efforts have progressed of late.
For CSX, industrial development projects had been robust for several years, but then predominantly “paused” during the U.S. presidential election period, said Bottomley. Post-election, they “have come roaring back,” she added.
Projects involve many types of commodities, such as metals, agricultural products, food and minerals.
A panel discussion on industrial development featured (from left): Intersect Illinois’ Paulina San Millan; OmniTRAX’s Ryan Higgins; CSX’s Christina Bottomley; and ASLRRA’s Chuck Baker, who served as moderator. Jeff StaglOmniTRAX is noting that rail is more of a must-have than a nice-to-have for some shippers, said Higgins. It takes more planning and collaboration to carry out projects over a long term.
“We see more due diligence on the front end at sites,” said Higgins.
In fiscal-year 2024, the state of Illinois had 104 industrial development site “looks” or inquiries, which was an annual record, said San Millan. Projects associated with electric vehicles have slowed down, but interest is strong for projects involving solar, ethanol and manufacturing tied to energy.
Some clients prefer more rail for heavier products or rail instead of barge, said San Millan.
OmniTRAX also is noticing a changing project mix and a transition in energy.
“We are seeing more tried and true industrial projects,” said Higgins.
For CSX, interest is increasing for “mega” projects, or those that cost more than $1 billion and involve over 500 acres, said Bottomley. It could be a new steel mill or auto plant.
Yet, some communities don’t welcome such projects due to the lack of a big enough local workforce or limited utilities, she said. Those communities might be more amenable to smaller projects involving around 10 acres that can be completed faster.
“A mega project can take five years to develop while a small project can be done in 12 months,” said Bottomley.
There are significant growth opportunities for Patriot Rail in intermodal and industrial development, said Brandy Christian, who became the company’s CEO in June 2024. Jeff StaglHaving a significant inventory of available properties is key, as is the speed to market, said Higgins. Rail access can be important, but there are factors that shippers rate much higher, such as lot size, the available workforce and access to viable utilities, he said.
Illinois has had success by vetting industrial sites, especially large sites, said San Millan. The state then markets those sites through Intersect Illinois’ website.
“It’s the second-most visible part of our website now,” said San Millan.
CN Fireside Chat
Speaker: Patrick Lortie, senior vice president and chief strategy officer for CN
Moderator: Tony Hatch, owner of ABH Consulting, an independent rail industry analyst and Progressive Railroading columnist/RailTrends program consultant
Hatch began the chat by teasing Lortie about President Donald Trump’s claim that the United States should make Canada the 51st state.
“We would be called Northern Minnesota, I think. We’d have a mean hockey team,” Lortie joked.
All kidding aside, Lortie said 2024 was “a tale of two years” for CN. In the first half, CN was ahead of the Class I pack on volume.
“But things became complicated starting in June,” Lortie said.
That’s when CN experienced a large labor disruption, Canadian ports began to deal with their own labor problems and a number of forest fires broke out in Canada. Then, extreme cold weather started early in November.
“It was a question if our operations could remain consistent through the course of the year. We showed increased resilience and operations bounced back quickly,” said Lortie. “That is a great foundation to build on going forward.”
CN is very excited that the Surface Transportation Board (STB) recently approved the Class I’s plan to acquire Iowa Northern Railway, he said. CN expects to combine the short line’s 175 route miles with its nearly 20,000-mile network as early as Feb. 13.
“The Iowa Northern has a large operation with many grain customers. We can extend our single-line access to many locations,” said Lortie. “We like the entrepreneurship there.”
CN had submitted its acquisition proposal to the STB in late 2023 and expected a decision sometime in 2024.
“The delay in the STB decision gave us a lot of time to plan,” said Lortie.
For CN, short lines along with industrial development can help generate more organic growth. The Class I assigns an account manager to each of the short lines CN partners with. Business gained from short lines won’t necessarily fill up a unit train, “but it can add up,” said Lortie.
CN plans to soon roll out a short line interchange performance measure that will gauge such performance daily, he said.
For now, the Class I continues to emphasize an overall “make the plan, run the plan, sell the plan” operating strategy that was developed two years ago.
“If we make it, run it and sell it, good things tend to happen,” Lortie said.
Patriot Rail Update
Speaker: Brandy Christian, CEO of Patriot Rail Co.
Christian started by describing how she joined Patriot Rail in June 2024 as CEO after leading the Port of New Orleans for seven-and-a-half years.
During her tenure in New Orleans, the port acquired control of the New Orleans Public Belt Railroad, increased operating revenue by 70% and grew operating income by 300%. The port is located in a key gateway like Chicago, said Christian.
Ozinga Bros. currently moves its products in more than 5,000 rail cars per year and wants to triple that figure by 2027, said James Kornas, the rail shipper’s executive vice president of rail. Jeff Stagl“I got a good view of the overall supply chain,” she said. “Rail is an important component there. You could only grow and be competitive if you partnered with the Class Is and customers.”
Now, Christian is trying to take advantage of her holistic view of the supply chain at Patriot Rail. The company owns and operates more than 30 short lines and offers various integrated services.
There are “huge opportunities” for Patriot Rail in intermodal and industrial development, said Christian.
“Shippers are facing the ever-changing supply-chain environment and need to work at the local level,” she said.
Patriot Rail needs to ensure it has the knowledge to think globally, is investing in new industrial development sites and is building relationships to grow.
“Customers appreciate our ‘small business relations’ and how we work with Class Is,” said Christian.
In terms of industrial development, Patriot Rail in 2023 obtained a $49.6 million grant from the California State Transportation Agency to build and expand the Castle Rail District in Merced County, California, as an inland port. A state-of-the-art loading dock at the Castle Commerce Center opened late last year.
A 70-acre rail district there will serve large agricultural product customers, said Christian.
Since Igneo Infrastructure Partners acquired Patriot Rail five years ago, the company has doubled in size, she said.
Shipper Perspective
Speaker: James Kornas, executive vice president of rail for Ozinga Bros. Inc.
Kornas began by describing his company, which has been a longtime rail shipper and owns two short lines: the Chicago Port Railroad Co. and Mokena Illinois Railroad. A family-owned company run by six brothers and one cousin, Ozinga Bros. produces ready-mix concrete, aggregates and cementitious materials, and distributes its products in the Midwest and south Florida.
The company operates five rail-served terminals in Milwaukee; Mokena, Montgomery and South Chicago, Illinois; and East Chicago, Indiana.
“We expect to have more rail-capable sites in 2025 and beyond,” said Kornas.
Ozinga Bros. currently moves its products in more than 5,000 rail cars per year.
“We want to triple that by 2027,” said Kornas.
The company also manages a fleet of 700 rail cars, as well as numerous barges, ships and concrete-mixer trucks. Many shippers tend to favor trucking over rail because of on-time performance, equipment, pricing and shipment visibility. But Ozinga Bros. continues to buck that trend.
“Rail is critical to our corporate strategy,” said Kornas.
