Rail Outlook 2015: OmniTrax Inc.'s Kevin Shuba

Kevin Shuba, CEO, OmniTRAX Inc.

What's your take on near-term business potential heading into 2015? What's your best-guess business forecast for next year and how can it come to fruition?

We are bullish on 2015 and began investing in 2014 to grow our business development efforts for the railroads we operate and to expand our industrial development efforts for the railroad real estate we manage. We see carload growth in the 3 percent to 5 percent range in 2015 as being very realistic for the short-line industry as a whole. Our business should match those numbers, with some fluctuation on the properties within our portfolio.

Two things will drive our growth in 2015 and beyond — expanded demand for existing commodities and our recent acquisitions. On the demand side, our railroads that support the oil and gas industry throughout the Midwest and Rocky Mountain region should see continued growth. In other parts of the country, we see growing traffic for several commodities, including steel, aggregates and chemicals.

For acquisitions, we continue to look for those characteristics that attracted us to Sand Springs, Okla. (Sand Springs Railway), and Brownsville, Texas (Brownsville & Rio Grande International Railroad); diversified commodities shipped, developable land, transload opportunities and strong management.

What will be an important issue for your railroad in 2015 and what are the potential obstacles to growth?

Safety will remain the most critical priority for OmniTRAX in 2015, and every year after. We want our team members, partners and the general public to go home in the same shape they come to work in every day. We are committed to continuing to adhere to the rigorous standards we have set for all of our properties. We are proud that 13 of our railroads earned safety commendations from the American Short Line and Regional Railroad Association last year and are working to increase that number in 2015.

After safety, we are addressing the issue of profitable growth for our existing and new lines. We plan to bring our experience, capital and best practices to provide growth, create jobs, spur investment and increase income in the Brownsville region and all the regions we proudly work in.

As for obstacles, we are still concerned about government over-regulation of the industry and the cost implications of increased regulatory requirements. Additionally, we would like Congressional support for the renewal of the 45G short-line tax credit, as it provides tremendous incentive for investment in infrastructure. Lastly, if oil prices continue to slide, that may have an impact on the growth we have seen from the energy related commodities.