Short Line Railroads: A Critical Connection for Union Pacific
As published in the ASLRRA Short Line Connector Magazine, Summer 2018.
Short line partners provide exceptional local train service to Union Pacific Railroad customers. It’s an important part of our business — and they do it very well.
While Union Pacific has more than 32,000 miles of track, we credit our short line connections with touching more than 20 percent of our total delivered carloads. Short lines connect coal, lumber, grain, and rock shippers and receivers (as well as many other markets) to our network in 23 states. But it doesn’t stop there. With access to the eastern Class I railroads, the six major gateways to Mexico, northern connections to the Canadian railroads and multiple ports along the Gulf and Pacific coasts, short lines help us deliver across North America.
It’s no wonder we’re looking for more ways to partner with short lines in the future through our Rail Within Reach program — and we have a Union Pacific team dedicated to developing initiatives to do just that.
Building on a Solid Foundation
Our vision is to help short lines grow organically by adding more customers to their existing infrastructure. We know that, because of their operational or financial circumstances, it’s not feasible for all new rail customers to connect to our main line. We also don’t access all market locations from our rail lines. With potentially lower project and network integration costs and more reach, short lines provide more options and additional markets to customers that are looking for locations for their rail-served business.
A key strategic goal of Union Pacific’s Network, Economic & Industrial Development (NE&ID) group, which includes our short line team, is to increasingly work with short lines as partners to drive mutual growth and create a seamless rail network together. Our Rail Within Reach program, including our State Strategy initiative and our industrial park pilot initiative, are designed to provide greater opportunities for our short line partners.
Rail Within Reach
The short line business has the potential to grow significantly by simply finding a tenant for a vacant rail-served property or a building opportunity on a piece of rail-serviceable land. Economic development is a quickly growing practice whereby economic development organizations (EDOs), developers and site selectors are working to place customers into new or existing facilities. To help facilitate locating on rail, Union Pacific recently introduced Rail Within Reach (www.up.com/within-reach), which provides resources and initiatives to connect companies to rail-served properties and helps short line railroads market these locations.
For instance, our new Site Solutions Tool provides companies on the hunt for rail-served properties with an easier way to find them. The online tool lets users search for rail-served buildings and industrial sites with just a couple of clicks. The Site Solutions Tool will provide potential clients with maps, photos and contact information for listed properties. If you wished that clients could Google available properties along your short line, this tool does exactly that. Contact your short line development consultant to work with your local EDO to list your site in Union Pacific’s online tool.
Working at the State Level
Economic development happens at the local and state level. Union Pacific’s State Strategy model brings together economic development agencies, short line railroads and ports to develop new business. Bringing all of these parties together allows us to identify opportunities where state, private and Union Pacific investments can be combined to execute projects. For example, we are currently piloting a State Strategy in Iowa that has identified specific business development initiatives in three key business sectors that are supported by all stakeholders.
Industrial Park Pilot: The Next Short Line Horizon?
Can a short line railroad focused on the rail business and real estate holdings of an industrial park retain and grow business in that park more effectively than a Class I? That’s the question our pilot program is intended to answer. It’s not about operating efficiencies; it’s about business development and real estate marketing effectiveness.
In addition to landing new customers along short lines, we are teaming up with short line railroads to pilot a program to reinvigorate existing industrial parks. Throughout 2018, we will offer some targeted requests for proposals (RFP) to short lines for opportunities to operate and develop industrial parks on our network. Criteria for the projects will include retaining existing rail business, attracting new business to the industrial park and converting non-rail-served facilities to rail-served properties. Short line railroads will be responsible for operating the parks efficiently with a high degree of customer satisfaction, but the measure of success will be focused on retention and securing new customers.
Delivering One Network Together
Union Pacific is committed to helping short line railroads develop new business. By working to create geographic transparency between “our” lines and “your” lines, we can deliver one network to the customer. Together, we can prove to our customers that rail really is within reach!