Lining up more business

When Carolina Coastal Railway took over operations of a 17-mile Pinetown-to-Bellhaven line from Genesee & Wyoming Inc.’s Rail Link in 2003, the North Carolina short line’s traffic totaled less than 500 cars a year.

Today, Carolina Coastal is moving about 500 cars a month. How? By using small-business marketing techniques to win back shippers and attract new ones, and helping existing customers increase their business. Oh, and by acquiring a 142-mile Raleigh-to-Plymouth, N.C., line from Norfolk Southern Railway last year — a deal that expanded the short line’s system more than eightfold.

Created in 1989, Carolina Coastal was purchased in July 2003 by Doug Golden, who also owns the Landisville Terminal & Transfer Co. in Landisville, Pa. Golden didn’t waste time trying to build Carolina Coastal’s business, primarily by providing consistent service to win over customers.

“We made calls on customers and told them that if we had a car, we would run,” says Golden, Carolina Coastal’s president. “We kept our word, got some credibility and got some business back.”

By 2006, the short line was hauling about 1,200 cars annually, mostly agricultural products — inbound fertilizers and outbound grain.

Meanwhile, NS was operating two parallel lines between Raleigh and eastern North Carolina. Carolina Coastal’s 17-mile line branched off from one of the lines.

In 2005, the Class I upgraded one line and decided to divert almost all of the area’s traffic onto it, essentially making the other 142-mile line between Raleigh, Wilson and Chocowinity a local operation, says Golden.

“Service went from five or six days a week to two or three days,” he says.

Around the same time, part of a NS-served Plymouth paper mill shut down, eliminating a large piece of business on the secondary line. So, the Class I decided the line would be better served by a short-line operator.

“And we were sitting right there with a good track record of building business,” says Golden.

Carolina Coastal signed a long-term lease with NS and took over operations of the 142-mile line in June 2007. The short line reopened a 13-mile segment between Raleigh and Plymouth in November that had been out of service for about three years. Carolina Coastal obtained a 50/50 matching grant from the North Carolina Department of Transportation and invested $250,000 to reopen the line, mainly by installing about 5,000 new ties.

Full staff

To handle the expanded operations, the short line went from employing two part-time workers — who were responsible for everything from locomotive maintenance to MOW to clerical duties to operations — to 15 full-time and a handful of part-time workers. In addition, Carolina Coastal began operating four locomotives instead of one, and moved traffic five days a week instead of two.

Railroad officials also met with every customer along the line — even those that weren’t directly on the railroad, but had a siding or potential rail access.

“Some people told us that we were the first railroad people they’d seen in many years, so that got our name in front of people,” says Golden.

The officials worked to retain shippers, too. For example, one customer who threatened to stop using rail service about a month before Carolina Coastal took over operations needed rail cars for a few months to address a car supply and demurrage issue. The short line obtained a small fleet of cars and let the shipper use them at no cost.

Carolina Coastal also helped a wood chip customer — the line’s largest volume shipper — cut almost two days off transit time for a 150-mile move by increasing service.

The “go the extra mile” efforts are paying dividends. During the first six months as operator of lines totaling 159 miles, Carolina Coastal averaged about 360 cars a month. And during the past two months, the railroad averaged 510 cars. This year, the short line aims to increase traffic another 15 percent.

“Part of the strategy is to provide the level of service the customers have been asking for,” says Golden. “Whether we’re holding cars or providing an extra switch they used to not get, we’re trying to enhance service so these customers always think of rail as an option.”