Watco turns 30, lands NS lease agreement in Ohio

On July 1, Watco Cos. L.L.C. marked its 30th anniversary. The company began its first contract switching operation with the Boise Southern Co. in DeRidder, La., on July 1, 1983.

Watco was formed by Charles "Dick" Webb, who died in March 2009. After working in the rail industry for 20 years, Webb came up with the idea of industrial contract switching, which was facilitated by the Staggers Act and deregulation, according to an item in the July edition of Watco's "The Dispatch" newsletter.

"Deregulation gave the railroads the ability to involve other operators, control their costs and pricing, and sell off lines that they didn't want to run anymore. Dick saw that many of the rail customers' hands were tied by the service that the Class I railroads were able to provide," the news item states. "By stepping in and having a crew available around the clock dedicated to that single business to switch cars, companies could control their work flow, making their business more efficient and profitable."

Through connections made in his rail industry career with the Kansas City Southern Railway, Webb connected with Boise Southern in DeRidder and landed a switching contract.

The company has operated under that same contract since July 1983 and has served the customer for 10,958 consecutive days, the news item states.

Today, Watco is the second-largest short line holding company in the United States, operating 30 short lines in 21 states. The company also provides industrial contract switching services at 27 locations; operates 16 rail-car repair, 23 railroad repair, eight locomotive shops and five private rail-car shops; and manages 22 transload facilities, 10 warehouses and two port locations.

Meanwhile, Watco annnounced on Wednesday that its Ann Arbor Railroad Inc. subsidiary filed with the Surface Transportation Board (STB) on June 24 seeking permission to lease 3.7 miles of track in Toledo, Ohio, from Norfolk Southern Railway.

An agreement signed by the short line and NS would provide Ann Arbor Railroad a 10-year lease to operate between points on the Cherry Street Branch and points between Galena Yard track. Both lines connect with the short line at the south end of its Ottawa Yard facility in Toledo.

The line handles about 925 carloads annually. Ann Arbor Railroad would operate the track — beginning in August pending STB approval — five days per week.

"Adding this trackage to the Ann Arbor presents a tremendous opportunity to create value for customers in the Toledo area," said Stefan Loeb, Watco's vice president of business development, in a press release.