LITTLE RAILROAD HAS BIG PLANS

WASHINGTON -- The New York Cross Harbor Railroad is an anachronism as much in deed as appearance, the Journal of Commerce Online reports. Its World War II-vintage locomotives and car floats that once hauled freight cars loaded with materiel destined for the front in Europe now carry more prosaic loads between terminals in Jersey City and Brooklyn.

The carrier, formed in 1983 from a merger of predecessors, is the last vestige of what was once the most important transportation system in America, a tightly interlocked rail harbor belt where eight major railroads moved thousands of freight cars across the harbor each day, connecting the rest of the country, and the world, with the manufacturing and retail nerve center of New York.

There are still just two ways to get a railroad car into water-locked New York and its environs: float it across the harbor, or run a train upstate to cross the Hudson River by bridge, then come back down to access a direct route into Queens - a three-day trip.

The postwar consolidation of the railroads and rise of trucking has reduced New York's carfloat traffic to a trickle. Each day the Cross Harbor (NYCH) makes the 45-minute voyage each way between Jersey City, N.J. and customers in Red Hook and Bay Ridge, Brooklyn. The float holds 12-15 cars per trip, for a total of about 2,200 cars in a year, fewer than half the number that came out of Brooklyn in a single day in the mid-1930s.

Today, 80 percent of New York's freight arrives by truck. But as the metropolitan area's ports and commerce continue to expand, officials are seeking other means to move freight through the region's highway-dependent bottleneck.

It's a warm autumn day at Greenville Yard in Jersey City, a weedy expanse south of Liberty State Park studded with debris from a more prosperous era. Weathered railroad tracks lead to a row of dilapidated waterside hoist houses, the remains of the old Pennsylvania Railroad's extensive harbor car float operations. (Unlike powered ferries, car floats must be towed, barge-like, by tug boats.) The PRR's five float bridges date to 1910; the sole operable one is used by the Cross Harbor to float about 3,000 cars a year to and from Brooklyn. The rusting bridges and dessicated pier is pure post-industrial decay, but to the Cross Harbor's new president, Ron Bridges, there is green beneath the grime.

"When I first saw this property, I couldn't understand why it had never been developed," says Bridges, surveying the 30 acres of waterfront property. "After all, it was only a rail yard where the tracks had been removed after the other float bridges had been closed, no need for expensive demolition or excavation."

The reason, of course, is because the Cross Harbor and its ancestors were only tenants on the property, now owned by Conrail, and rarely had adequate development capital anyway. But Bridges, who spent 30 years as an executive with Conrail and predecessor Erie-Lackawanna, is implementing a plan for profitability by diversifying the Cross Harbor's assets while growing its core rail business.

Bulldozers are clearing 15 acres in Greenville where the NYCH plans to build a distribution center and transloading facility. Plans include up to 4,000 feet of track for train-to-truck transloading of plastic pellets and other bulk commodities, and a 250,000-square foot warehouse capable of handling beer, lumber, rice, paper, and food products. Bridges has been in discussions with warehouse operator Baldwin Logistics of Palmer, Mass., to share the costs of development and manage the facility, and has also been in touch with at least two other customers for the transload business.

Bridges who led Conrail's forest products unit before joining the NYCH in October, 2000, the distribution center is the linchpin to future profitability. Despite the fact that the NYCH moves cars for rail giants Norfolk Southern, CSX and Canadian Pacific, he says, "We are not making money on the railroad. We have a lot of incremental capacity, and need another 1,000-1,800 carloads per year to make money. If you want to be profitable, you can't just be floating cars across the harbor. We have to have a distribution operation, and we think that location is on our side, both here and in Brooklyn."

To that end, the Cross Harbor recently submitted a bid to New York's Economic Development Council to operate the 65th Street rail yard located south of its headquarters in Bay Ridge. The EDC thinks as many as 10,000 rail cars a year could move through 65th Street, which connects to the national rail network in Queens via the Long Island Rail Road's old Bay Ridge freight line, and spent $20 million to rebuild the yard and its two float bridges.

"We see a lot of synergies for 65th Street with our current operations," said Bridges. "There's an art to loading a car float, and we think we are best qualified to run the yard." While an EDC official said the agency hopes to select an operator early in 2001. Shortline New York & Atlantic is operating the yard on a short-term basis; the Cross Harbor in December added a third locomotive to its roster in anticipation of the new assignment.

Conrail is the Cross Harbor's sole customer in Jersey City, and the railroad serves float terminals in Red Hook and Sunset Park, both in Brooklyn. Shippers - the railroad's reason for being - include American Warehousing, a large cocoa bean shipper; Davidson Pipe Supply, as well as a lumber yard and scrap metal dealer. And there is opportunity here, too.

"We have been dealing with truck fuel surcharges over the past year, and we had found that one of our Midwest mills had become non-competitive because transportation costs by truck were too high," said Stuart Krueger, president of Davidson Pipe. "The Cross Harbor helped hook us up with rail service, and that made the mill competitive. A railroad car brings in a 90-ton load that can be unloaded all at once. Unloading the same quantity from three or four trucks means we have to interrupt the normal warehouse procedure, and that costs money. Rail service allowed us to be the low bidder on several contracts and keep costs down, and we are passing that on to our customers."

The planned projects, and perhaps rehabbing another float bridge in Jersey City, could help the Cross Harbor double carloadings and revenue over the next several years, Bridges predicts. He brought in a former Conrail associate, Wayne Eastman, as vice president of operations, to leverage Eastman's experience as a district superintendent for Conrail's vast North Jersey operations in hopes of attracting additional customers to the Cross Harbor's rails.

"The operational key," said Eastman, "is more business. Sure, we need new locomotives and infrastructure, but we can move two, three times the number of freight cars that we're doing now with no trouble."

Bridges expects the Cross Harbor to turn a profit in 2001 with a total of 3,000 carloadings, and predicts 20,000 carloads per year by 2020.

"We have to make money on both the railroad and the distribution center - in all sectors - to become profitable," Bridges says. "They have to complement each other."


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January 17, 2001


bentley@ble.org

2001 Brotherhood of Locomotive Engineers