Steel rails humming

Steel rails humming

As prepares to launch a same-day delivery service by drones that will spearhead online shipping to new heights, a 19th-century mode of transport for heavy and bulk commodities is alive and growing again on Long Island.

The New York & Atlantic Railway (NY&A) runs about a dozen locomotives across 269 route lines, exclusively on Long Island lines, from Bay Ridge to Montauk, hauling everything from lumber to biofuels and beer.

The short line freight railroad made news recently after one of its cars derailed and crushed signal machinery, the rebuilding of which caused delays for several days on the Ronkonkoma line. But the company’s ongoing role as the lifeblood of the roughly 80 companies it serves is perhaps lesser known.

“We’ve become an integral part of every business we service because there is a tie between what they do with what we do,” NY&A President Paul Victor told Long Island Business News from the railway’s main freight yard in Fresh Pond Junction.

The railway primarily carries materials for construction, including vast amounts of aggregate used to make asphalt for roads and cement for construction of high-rise buildings in Manhattan. The other commodities it hauls include lumber, drywall and brick.

“All together, that’s a significant amount of our traffic base,” Victor said. Among NY&A’s customers is the Brooklyn-based D&M Lumber Products, which deals in wood products for wholesale and retail distribution from Bushwick and Maspeth. The company, which typically works directly with lumber yards, is part of 25 route miles of freight-only LIRR line that the railway operates in Brooklyn and Queens.

“We bring in products to our facilities and reload them on to customers’ trucks that are deliver to people in the New York and Brooklyn area,” said Assaf Packin, D&M’s director of new business development and strategy.

In addition to the Brooklyn-Queens component, LIRR’s rail network is divided into two other parts. One involves a passenger-only line, such as the tracks that run between Penn and Jamaica stations, where freight customers are non-existent.  The other allows freight and passenger trains to share the same lines that include neighboring tracks that consists of short, disconnected spans.

In 1997, NY&A was launched as part of a private concession to operate freight trains on LIRR’s lines. As part of a long-term lease agreement, the railway pays the public commuter railroad revenue based on its carloads. NY&A is an affiliate of Anacostia Rail Holdings and is among sixshort line freight railroads that the Chicago-based corporation owns and manages. Its entire system links to all states, as well as Canada and Mexico. When NY&A launched, the number of annual carloads was about 10,000; that number last year hit 28,000.

“You always have economic cycles that go up and down, but largely speaking the company has almost tripled its traffic over the life of the concession so far,” Victor said of NY&A’s growth.

Another customer, Elm Global Logistics, is a Brentwood-based warehouse and shipping transfer facility that also receives freight from trucks, although it has moved toward using more rail. ELM deals mainly in cornmeal manufactured in Texas, Indiana and California that is shipped to the company’s 500,000-square-foot facility, from where the products are distributed throughout the East Coast. The company also handles by rail rolled paper, lumber, and General Mills products, including Quaker Oats.

“There are a lot of things that we do via rail that is slowly increasing,” said ELM owner Bill Conboy. Conboy noted that while in past decades many companies found it more cost effective to use freight trucks after the industry underwent deregulations, the pendulum has started to swing back to rail.

“There are many commodities that it pays if you buy in bulk, especially if they are manufactured in middle America or the West Coast, to put on rail, because it’s a lot more cost effective,” he said.

The average freight car’s capacity is equal to about 4 to 4.5 trucks, and the deferential in gross fuel efficiency is roughly about 4 to 1, according to Victor. D&M Lumber Products, for example, switched to rail deliveries in 2007, after trucks that arrived from New Jersey and beyond proved too costly in terms of tolls and other expenses.

“Depending on the freight rate, it’s usually about a 30 to 35 percent savings in freight alone,” Conboy said of trains compared to trucks. “Our customers usually see a significant benefit by using the rail.”

Conboy added that despite the significant savings from rail, transport by train takes more time. Many companies no longer want to hold inventory and want to receive materials in a relatively short time span.

“Some companies do both: they’ll ship in trucks if they need something quickly, or they’ll send it on rail and save a lot of money if they don’t have to have it by tomorrow,” he said.

The combined freight rail traffic on U.S. railroads was 28.6 million carloads, containers and trailers, an increase of 1.2 million unit or 4.5 percent over 2013 and the highest annual total since 2007, according to an end-of-year report of the Association of American Railroads.

The Brookhaven Rail Terminal, a privately-funded “transload” terminal on 28-acres of land in Yaphank, also serves multiple customers since it started to receive NY&A freight trains in 2012. The terminal handles mostly bulk flour that is used primarily by bakeries on Long Island, delivered on about 35 rail cars per month. The terminal deals heavily in lumber for a number of companies, including Medford-based Triangle Building Products, Riverhead Building Supply and Home Depot.

BRT President Jim Newel said that in the terminal’s first year of operation, it handled nearly 500 freight cars; last year it received 2,000 cars. “It has doubled in each of the three years it has been in operation,” Newel said.

Victor noted that NY&A is a common carrier open to any company that can meet its net contents for bulk traffic. Some customers have invested in tracks that connect their facilities to LIRR’s lines. ELM has tracks that run inside its facility that existed when the company in 1981 moved into its building, a former Hills Supermarket distribution center.

“When they connect our track to their track,” he said, “it’s like their connecting to a phone company or power company.”