Elk City has purchased a 130-acre trackside parcel west of town for development as the rail-served Big Elk Industrial Park. The first tenant is expected to be an existing local employer intending to expand its operations. The community’s geographic location and civic foresight with respect to forward planning and infrastructure improvement has enabled it to become the focal point of renewed regional oilfield activity.
GNBC’s 25-year operating agreement with BNSF is being replaced to recognize changed circumstances for both parties. GNBC becomes a switching carrier with BNSF, publishing rates for interline traffic via the Enid and Altus interchanges, but customers will continue to be billed by BNSF. A new tariff designed to improve traffic velocity and routing flexibility will be effective April 1 and certain other provisions as of May 1.
Traffic in 2012 set a record, 38% above the prior year, reflecting
rapidly growing volumes of Anadarko Basin crude oil. Altogether,
oilfield-related carloadings accounted for 66% of a freight-service
business that was 60% wheat-dependent as recently as 2000. This
transformation should lead to more regularly scheduled operations and
also moderate extreme seasonality formerly experienced at the midyear
Traffic in 2012 set a record, 38% above the prior year, reflecting rapidly growing volumes of Anadarko Basin crude oil. Altogether, oilfield-related carloadings accounted for 66% of a freight-service business that was 60% wheat-dependent as recently as 2000. This transformation should lead to more regularly scheduled operations and also moderate extreme seasonality formerly experienced at the midyear harvest.
Growing oil production in western Oklahoma and the Texas Panhandle is further stimulating activity on FMRC at Sayre, the logistical “sweet spot” for truck-to-rail transloading. Though capacity restrictions remain in effect until extensive TIGER III track upgrading can be completed, FMRC’s first non-grain mini-unit train was assembled for movement last month, transporting high-grade crude to domestic refineries.
Farmrail has achieved record traffic in 2012 as heightened horizontal-drilling activity in the oilfield provided welcome stimulus to the regional economy. Predictably, inbound frac sand again was the leading commodity, following three decades dominated by wheat. Outbound crude oil, which began moving in 2011, was second and could take the lead next year as production ramps up from newly drilled wells.
In anticipation of further growth in movements of Anadarko Basin crude oil, Farmrail is adding seven leased locomotives, increasing the system fleet to 35. The new power includes five fuel-efficient, Caterpillar-powered units to increase tractive effort on heavier road trains and two 12-cylinder switchers to be used in assembling mini-unit consists at the principal truck-to-rail transloading site.
WestOK Logistics has become the fifth crude-oil gatherer on FMRC at
Sayre. Meanwhile, JP Energy has established a truck-to-rail
transloading operation on GNBC at Carleton, affording efficient access
to production from the Mississippian formation in west-central
Oklahoma. On the opposite side of the 50,000-square-mile Anadarko
Basin, Performance Minerals is distributing frac sand from an
FMRC-served site at Altus.
WestOK Logistics has become the fifth crude-oil gatherer on FMRC at Sayre. Meanwhile, JP Energy has established a truck-to-rail transloading operation on GNBC at Carleton, affording efficient access to production from the Mississippian formation in west-central Oklahoma. On the opposite side of the 50,000-square-mile Anadarko Basin, Performance Minerals is distributing frac sand from an FMRC-served site at Altus.
Farmrail’s transformation from an agriculturally
dependent system to one driven primarily by resurgent
oilfield development is underscored by year-to-date
traffic growth. Carloadings for the first three
quarters of 2012 will eclipse any full year since the
present route structure was assembled in 1993. Frac
sand is certain to be the leading commodity for the
third consecutive year, with crude oil a likely future
contender with wheat for second place.
Farmrail’s transformation from an agriculturally dependent system to one driven primarily by resurgent oilfield development is underscored by year-to-date traffic growth. Carloadings for the first three quarters of 2012 will eclipse any full year since the present route structure was assembled in 1993. Frac sand is certain to be the leading commodity for the third consecutive year, with crude oil a likely future contender with wheat for second place.
Work on FMRC’s expedited TIGER
III track-rehabilitation project between Clinton and
Sayre is set to begin next month. Contractor crews will
start at the west end so that the Sayre yard and
excepted track comprising 17 of the 49 route-miles can
be upgraded promptly to Class 2 standards, enabling
longer blocks of originated crude oil to be moved more
expeditiously. Completion is expected by the second
quarter of 2013.
Work on FMRC’s expedited TIGER III track-rehabilitation project between Clinton and Sayre is set to begin next month. Contractor crews will start at the west end so that the Sayre yard and excepted track comprising 17 of the 49 route-miles can be upgraded promptly to Class 2 standards, enabling longer blocks of originated crude oil to be moved more expeditiously. Completion is expected by the second quarter of 2013.
With major wildfires raging throughout the arid Western states this year, there’s also fire danger on the southern Great Plains as extreme heat and lack of moisture dry out spring cheat and post-harvest wheat stubble. Random sparks from locomotive stacks and brake rigging can easily ignite trackside vegetation, triggering Farmrail’s good-neighbor policy with affected landowners and local fire departments.
The Federal Railroad Administration has issued a temporary waiver allowing movements of 10-car blocks of crude oil and up to 20 empties over excepted FMRC track between Sayre and Elk City. This provision will begin to realize the inherent efficiencies of rail transportation and facilitate work trains delivering materials for the federal TIGER III rehabilitation project expected to get under way next month.
A winter-wheat harvest that normally begins around Memorial Day started three weeks early and was essentially over by the monthend. More planted acreage and favorable moisture conditions throughout the growing season caused statewide production estimates to be double the drought-stricken 2011 total, well above average, and the best since 2008. Good advance planning and field coordination enabled rail operations to function smoothly.
Farmrail and the six other owners of Marquette Rail have sold their interests to RailAmerica, which expects to assume operating responsibility for the Michigan carrier as of May 1. The investors, including three established short lines, founded MQT in 2005 to lease and operate 130 miles of railroad owned by CSX Transportation and extending from Grand Rapids to the Lake Michigan ports of Ludington and Manistee.
Mercuria Energy, an international commodities trading and logistics organization, has opened its new facility for transloading Anadarko Basin crude oil at a site adjacent to the large FMRC rail yard in Sayre. A two-track, expandable design with temporary storage connected to a manifold system enables rapid discharge of product from incoming trucks and simultaneous loading of multiple tank cars.
Farmrail’s locomotive fleet has been augmented and upgraded with the addition of five more GP-38s, bringing the total of that type to 11. Increased traffic requiring longer hauls, heavier trains, and intensive switching at more widespread locations justifies an active roster of 31 units, including spares. System train miles increased 17% last year and locomotive unit-miles 25% as carloadings rose 8%.
The United States Department of Transportation has awarded a $6.8-million TIGER III grant for rehabilitation of the 49-mile, State-owned Clinton-Sayre line of FMRC to accommodate growing volumes of Anadarko Basin crude oil. Improved track conditions will eliminate an inefficient limitation on train length and speed for movement of hazardous commodities from truck-to-rail transloading sites in Sayre.
Farmrail’s transformation to a system driven by Anadarko Basin energy production has continued throughout 2011. Five more GP-38 locomotives are being purchased to handle heavier trains of outbound crude oil as well as inbound frac sand. The railroad is starting to resemble a “pipeline on wheels,” with multiple input locations for sweep trains assembling traffic destined for domestic refineries.
This month marks the 30th anniversary of Farmrail’s arrival in western Oklahoma. The Company has grown from a 35-mile short line linking Clinton and Elk City to a 369-mile network radiating from Clinton and covering 12 counties. Most importantly, the customer base has expanded with the diversification of the regional economy, greatly reducing the railroad’s former dependence on agriculture.
Rail movements of crude oil are growing as additional logistics firms participate in the supply-line gathering process. Mercuria Energy has begun transloading at Okeene, Deeprock Energy Resources at Thomas and Hobart, and Gavilon at Sayre. Marquis Energy also will be locating at Sayre as the shift of regional shipments from road to rail continues in anticipation of strong production gains in western Oklahoma and the Texas Panhandle.
Crude oil is back on the rails in western Oklahoma after an absence of several decades. Anadarko Basin production has been revitalized by horizontal drilling, providing economic access to previously untapped reserves. Petroleum marketer Pacer Energy is loading the high-quality liquid at Sayre and forwarding it to the Cushing storage complex for pipeline delivery to various domestic refineries.
While underground hydrocarbon development activity continues at a high level, farmers on the surface have their eyes on the sky. The extended drought that began last October has seen only two inches of precipitation over most of western Oklahoma, severely affecting the 2011 winter wheat crop and now threatening next year’s. The parched earth contrasts with more northerly states where severe flooding has been the problem.
Since the 1993 expansion of Farmrail to its present configuration of lines, 25 new rail-served customers have been attracted to the region, and 10 others have expanded their facilities. Oklahoma communities able to preserve their rail connections to the national network remain “in the game” for industrial development, as we now are seeing with renewed Anadarko Basin oil and gas drilling activity.
It’s a rare year when Farmrail train crews are not fully engaged on Memorial Day. As expected, the winter wheat harvest proved to be a non-event, and cutting started without a single foreign grain hopper positioned at country elevators or in the order backlog. The only consolation is higher prices, as more northerly crops are threatened by late flooding.
The driest growing conditions in 90 years of Oklahoma meteorological record-keeping assure that 2011 will be the second consecutive year in which wheat is not the primary commodity handled on Farmrail’s lines. A five-month stretch with negligible precipitation has not only resulted in irreversible damage to the new crop, but also heightened the risk of fire.
Horizontal drilling technology has revived western Oklahoma’s active rig count over the past four years. Farmrail has enlarged its work force and redesigned service to accommodate an increasing volume of oilfield traffic and new customers at the system’s extremities. The revised operating plan includes weekend service and night running to avoid congestion at interchanges and receivers’ facilities.
For the first time in the 18-year history of Farmrail’s present configuration of lines radiating from the Clinton hub, wheat was not the system’s largest traffic category in 2010. Frac sand accounted for 40% of total carloadings, which were the third-highest on record. FMRC soon will activate its fifth sand distribution site, and three have been established on GNBC to support Anadarko Basin shale development.
Oilfield supplier Frac Tech Services has broken ground for a sand-distribution facility at a trackside location adjacent to the FMRC-served industrial park at Elk City. Plans call for construction of a new passing siding and double-ended spur for unloading different grades of product. Permanent storage capacity is planned so that cycle time on scarce hopper cars can be improved.
Last-minute Congressional extension of the very successful federal Section 45G infrastructure tax credit will enable short-line railroads nationwide to continue accelerated maintenance and capital programs through 2011. Farmrail’s two common-carrier subsidiaries in Oklahoma have spent $24.1-million to upgrade track and bridges during the six years this incentive has been in effect.
Quest Chemical is the latest oilfield supplier to set up a transloading operation for frac sand in western Oklahoma as energy development activity continues to increase. The five-year-old, Fairview-based company has started handling sand as a natural outgrowth of its original acidizing business, serving horizontal shale drillers from a rail-served site on GNBC at Okeene.
In order to avoid confusion for traffic moving via both of Farmrail’s common-carrier subsidiaries, gross weight limits on GNBC and FMRC have been conformed at 268,000 pounds. Shippers are responsible for derailments or other damage caused by overweight cars, and the new policy will be strictly enforced in the interest of both parties.
Elk City Industrial Authority has been authorized to modify the unloading pit at its distribution facility for crushed stone so deliveries can be made more efficiently with rapid-discharge railcars. These changes should enable Farmrail to increase rail capacity to as much as 300,000 tons annually by scheduling up to two round trips weekly from the quarry at Long.
The first western Oklahoma whistle-stop campaign train in many years will run on Septemberv20 for gubernatorial candidate Mary Fallin, currently finishing her second term as a Washington Representative. Its itinerary includes stops in Thomas, Clinton, Cordell and Hobart. We’re about to see if old-fashioned platform politicking can still be fun.
Weatherford traffic this year already exceeds the 2009 total, when it was Farmrail’s third-largest station. The town has become a hotbed of rail activity as a distribution center for the development of nearby oil-shale formations, and main-line and yard trackage have been upgraded to accommodate increased tonnage of fracturing sand used in lateral drilling.
Construction of a new side track at Tillman Producers in Frederick has set the stage for increased distribution of liquid fertilizers throughout southwestern Oklahoma and parts of Texas. Nitrogen solution is rapidly replacing anhydrous ammonia as the nutrient of choice due to farmer, carrier and producer efforts to reduce exposure to hazardous substances.
The 2010 wheat harvest was the most unusual in Farmrail’s 29-year history. Lack of normal export demand, large carry-over stocks, depressed market prices, and low protein content caused much of an above-average but below-expectations crop to be held in on-line elevators. The usual June surge in carloadings therefore will be spread out over the next 10 months.
Despite the deteriorating state of the national highway system and accompanying stress on maintenance budgets, motor carriers have renewed lobbying efforts to increase truck sizes and weights. The push for greater road and rail efficiency is like the nuclear arms race; a truce should be declared while the country catches up with its infrastructure needs.
Another encouraging sign for continued Anadarko Basin oilfield activity is JKM Ventures’ purchase of trackside property in Elk City. The trucking firm is preparing the former cottonseed-mill site to receive fracturing sand for transloading to drilling locations on the westerly side of the field, complementing similar operations 50 miles away at Weatherford.
The roadway maintenance season has started with the third phase of rehabilitation at FMRC’s Altus yard and interchange tracks, and the Clinton-Weatherford segment is due for tie replacements and surfacing to accommodate increased industrial sand traffic. New rail is being installed at 25 road crossings on the north end of GNBC to remove slow orders.
Another new oilfield supplier, Anchor Drilling Fluids, has joined the GNBC customer list by establishing a sixth operating location in Oklahoma, in the heart of the Anadarko Basin. The Tulsa-based firm has occupied and revamped an existing rail-served building in the Clinton Industrial Park and already received its first delivery of imported barite.
A climatic cycle is evidenced in western Oklahoma by weather events not seen for several decades, but it can hardly be described as “global warming.” Last year began with severe cold spells that seriously affected winter wheat production and ended with early winter blizzard conditions and deep snowdrifts that disrupted all modes of transportation.
Outlays to maintain and upgrade Farmrail’s track and bridges will reach a record level this year despite a severe traffic decline caused by frost damage to the wheat crop, reduced oilfield activity, and general economic malaise. Its subsidiaries have installed 115,000 ties and improved 60 bridges since the federal infrastructure tax incentive was introduced in 2005.
GNBC soon expects to extend regular service via 22 miles of trackage rights between Snyder and Altus, which is to become the primary interchange with BNSF. This arrangement should result in more efficient handling of traffic by both carriers and reduce congestion during the wheat harvest, when back-ups have seriously impeded the flow of loads and empties.
Car storage has become a counter-recessionary balance to declining freight revenue for many short lines with surplus track capacity. Farmrail, which has been in that business for 25 years, is currently hosting a record inventory of out-of-service railcars awaiting an upturn in traffic, including 20 miles of mothballed container platforms.
Oklahoma’s Congressional delegation is unanimously co-sponsoring legislation to extend the federal tax credit for short-line infrastructure investment in effect since 2005. This incentive has stimulated contractor and supplier employment while improving safety and efficiency of long-term assets affording outlying communities access to the national rail network.
The concept of creating private investment accounts to supplement Railroad Retirement benefits has been a reality at Farmrail since 1993. An Employee Stock Ownership Plan gives each eligible participant an equity stake in the business. We want all our people to think like owners, because what’s good for the Company is good for them.
The 2009 excursion season began on Independence Day with “Proud To Be American” trips to honor current military personnel and veterans. Meanwhile, movie makers finished filming “The Killer Inside Me,” a western murder mystery shot entirely in Oklahoma, including 1950s period scenes in Enid and Cordell and on board FMRC’s passenger coaches.
Western Oklahoma’s winter-wheat harvest turned out to be almost a non-event, as severe late frost damaged newly formed heads and rendered most of the crop unmarketable. As a result, the usual June traffic surge will not occur this year. Since country elevators still hold much of the 2008 production, grain will be moving to terminals over the next 10 months.
A fourth GP-38AC and two standard GP-38s are being added to the motive-power roster, enlarging it to a total of 22 units. They will allow some older GP-9/10 locomotives to be placed in reserve status, leased or sold, or used as parts sources. Electronic event recorders and cameras are being installed on the primary fleet as additional safety measures.
Modernization work on FMRC Budd self-propelled railcar demonstration unit 6130 has been completed by Industrial Rail Services in Moncton, New Brunswick. The two companies are offering these versatile, economical, time tested, stainless-steel vehicles for service on light-density passenger routes where operating flexibility and fuel efficiency are essential.
Preparation for the upcoming winter-wheat harvest involves continued high-level outlays for system track and bridge improvements. Main lines were inspected by a geometry car to identify structural deficiencies for remedial attention by Company roadway workers and outside contractors so that a sound Class 2 standard can be achieved by May.
While the nation waits to see how and when massive government intervention in the economy takes effect, Farmrail has provided its own "stimulus package." The most immediate and direct impact can come from employers, and all personnel received yearend bonuses and pay raises so they could enter 2009 with greater confidence than most Americans.
Farmrail is well positioned to withstand the economic recession that now has been confirmed statistically. Record traffic enabled the Company to end 2008 in the best financial condition in its 27-year history, and a two-year extension of the federal infrastructure tax credit will allow for further physical improvement of track and bridges this year.
The latest additions to GNBC’s customer list are at Okeene. Oilfield supplier Skyline Chemical is building a spur to a new distribution facility for hydrochloric acid, while Canadian-based Nexen has established an experimental transloading point for crude oil railed from developing fields in North Dakota that lack direct pipeline access.
The railroads’ ability to transport heavy and oversized loads was demonstrated again last month when a 510,000-pound electrical transformer arrived on a specially designed eight-axle flat car. The shipment originated in Mexico and was delivered to Elk City for transloading to its final destination, an Acciona Energy wind-farm development near Hammon.
Controller Judy Petry received the League of Railway Industry Women’s "Woman of the Year"award at a presentation ceremony in Chicago on September 23. She has become a recognized expert in her field, serving on several industry committees and chairing the American Short Line and Regional Railroad Association’s 2008 national convention.
Brainerd Chemical and United Agri Products are joining the ranks of GNBC customers. Both will occupy rail-served portions of the former cotton-oil mill property in Clinton, completing its redevelopment to other uses. Meanwhile, newcomer Wildcat Minerals is set to receive its first shipments of fracturing sand at an FMRC unloading site in Weatherford.
FMRC plans to undertake phased improvements to the capacity and condition of the Altus yard and interchange in cooperation with Oklahoma Department of Transportation. These facilities proved inadequate for handling peak transportation demand during June, when harvesting speed and volume overwhelmed infrastructure engineered a century ago.
It was “déjà vu all over again” as nature caused two service interruptions at Enid and disabled three locomotives midway through a bountiful harvest. Train and maintenance crews did a splendid job in dealing with adversity, managing to move a record number of carloads in June despite several days of disruption from wind, rain and fire.
Unless late misfortune strikes, as it did last year, the 2008 winter wheat crop will test the railroads’ ability to move heavy traffic in a short time frame. The combination of increased harvested acreage, strong export demand, and high prices should cause a sharp seasonal spike in carloadings as farmers seek to move their grain to market as soon as possible.
With agriculture and energy production thriving, rural western Oklahoma is a pretty good place to be these days. Farmrail’s lack of dependence on forest products, building materials, automotive and intermodal business is enabling the Company to increase traffic in 2008 while the railroad industry generally reports declining tonnage as economic activity slackens.
A 6,000-square-foot, Company-owned warehouse in Clinton is being transformed into a base for maintenance-of-way personnel, materials and supplies. Renovations will include a new exterior shell and an addition incorporating office space and crew quarters that will relieve crowding in Farmrail’s other in-town facilities.
Farmrail thanks its many customers who gave their political support to an extension of the expiring three-year federal tax credit for short-line railroad infrastructure improvements. This incentive enabled the Company to enhance safety and reliability by increasing its outlays for track and bridges by more than 55% from the level of the preceding three years.
Farmrail’s recovery from last year’s unprecedented flooding and related physical damage, workforce stress, and financial consequences is complete. The Company enters 2008 with a smoothly functioning service plan and the broadest customer base, best track structure, largest locomotive fleet, and strongest financial condition in its history.
The downturn in national rail traffic has given a boost to temporary car storage. The on-line inventory has included off-lease equipment, new boxcars, hoppers and tanks awaiting their first users, and the longest trains ever seen on Farmrail – strings of intermodal container cars occupying more than 10 miles of track in outlying locations.
In support of the recently adopted system operating plan, GNBC has purchased three 2,000-horsepower Electro-Motive GP-38AC locomotives, increasing the Farmrail fleet to 21 units. The additional power will provide greater flexibility to handle new customer locations, variously sized trains, and seasonal traffic peaks.
A new operating plan is improving transit time for all customers as the extended effects of severe flooding are overcome. It involves running more frequent, shorter trains over smaller territories and coordinated meets to expedite traffic flows. The objective is same-day or next-morning service for most customers and second-day deliveries to the system extremities.
First loads are expected this month for three new rail customers: Ventura Refining and Transmission, Thomas (petroleum distillates); Hampel Oil, Sayre (lubricants); and Livestock Nutrition, Altus (animal feed). These are good signs of an improving regional economy driven mainly by agriculture and natural resource extraction.
The farmer is a winner in western Oklahoma this year. Though the winter wheat harvest fell short of early expectations because of extended wet weather, the region produced some of the better wheat in the nation, and market prices have remained high. The unusual moisture also has improved the outlook for secondary crops.
Unprecedented spring rainfall transformed the “dust bowl of America” into a mud bowl, delaying and then prematurely ending the winter wheat harvest. Farmrail maintenance personnel did a fine job of making tracks passable where flooding and washouts had occurred, limiting a partial service interruption to just four days.
The Company’s GNBC subsidiary soon will take delivery of 48 more covered hoppers for grain-shuttle service to and from terminal elevators in Enid. This purchase replaces older cars that had exhausted their useful lives for interchange purposes and increases the total fleet to 119 units.
This year and next mark the 100th anniversary of construction of Farmrail’s “Orient Line” through southwestern Oklahoma. Planned to connect Kansas City with the Mexican port of Topolobampo, the ambitious 1,451-mile project never reached its destination due to financial difficulties that led to bankruptcy in 1908.
Preparations are under way for a potentially huge winter wheat harvest, starting next month. Additional locomotives, railcars and trainmen are being mobilized to deal with an expected overflow of country elevator capacity and resulting railroad congestion in moving a bumper crop to market.
The shop force has turned out another masterpiece of workmanship. GP-10 locomotive 1981’s unique paint scheme commemorates the Company’s 25th anniversary and the rich heritage of the routes it operates – Frisco, Rock Island and Santa Fe – as all reach or near a century of existence in western Oklahoma.
A slowing domestic economy has increased demand for railcar storage, including entire intermodal unit trains as well as smaller blocks. Farmrail’s 22 years of experience in the storage business, system capacity of more than 2,000 cars, dual Class I connections, and car-repair capability make it an attractive location for fleet owners’ out-of-service equipment.
As a result of the worst harvest since 1957, wheat comprised only 24% of Farmrail’s carloadings last year, down from 60% as recently as 2000. Increased volumes of other commodities, notably oilfield supplies, crushed stone, and feed grains, have diversified the traffic mix considerably in recent years.
Twenty-five years after its founding there, Farmrail has established a new presence in Elk City by purchasing the assets of American Milling’s railcar-repair facility. This acquisition will enable FMRC to perform a wide range of running and heavy repairs on equipment bad-ordered in a region without ready access to other shops.
November 18 marks the 25th anniversary of Farmrail service between Clinton and Elk City, begun in the aftermath of the Rock Island railroad bankruptcy and a time of booming oilfield activity. We salute the people of Elk City for their foresight in recognizing the desirability of preserving access to the national railway network, for their town has become the largest traffic center on the expanded Farmrail system.
Farmrail soon will become the first railroad of any size to use hand-held electronic devices to record freight-car movements. This technology saves trainmen time and improves reporting speed and accuracy by eliminating traditional paperwork.
More than three-quarters of Farmrail’s 46 active customers now bill their rail traffic electronically, either directly with the popular “ShipperConnect” program or through third-party agents and connecting carrier websites. This time-saving technology greatly improves reporting accuracy and minimizes the risk of service errors.
For the first time since the last system extension in 1993, June will not be the peak traffic month this year. The short wheat crop, market conditions, and available storage caused elevator managers to curtail shipments normally made during the harvest period.
Next November 18 marks the 25th anniversary of Farmrail’s founding as a 35-mile short line linking Clinton and Elk City at the time of a previous energy boom. The Company expanded to its present 347-mile regional configuration by absorbing lines of both former connecting carriers, Burlington Northern and Santa Fe, which merged in 1995.
The benefit of diversification will be evident in the coming months after the worst wheat harvest since 1957. System traffic will be down in 2006 for the first time in five years.
Groundwork is in progress for two new rail customers, a pipe yard in Elk City's industrial park and a lubricant-distribution terminal at Sayre, as Anadarko Basin gas-development activity remains at a high level.
While unusually dry growing conditions seem certain to affect this year’s winter wheat crop, natural gas development activity remains at a high level. Inquiries from new businesses seeking to support Anadarko Basin drillers are an encouraging sign of confidence in the future of western Oklahoma’s major source of “clean” energy.
Farmrail’s dependence on the annual western Oklahoma wheat crop continues to decline as other rail business enlarges and diversifies the traffic base. Wheat accounted for just 39% of carloadings in 2005, down from 60% as recently as five years ago.
Farmrail will receive 92 carloads of pipe this month for transloading at Elk City. It is destined for a new transmission line being laid in Roger Mills County.
Farmrail enjoyed record traffic and revenues in 2005, accompanied by a much higher level of spending on infrastructure improvements. A three-year federal investment credit, supported by District 3 Congressman Frank Lucas and a substantial bipartisan majority in the House, provided additional funds to enhance the safety and efficiency of small railroads throughout the country that now operate 30% of the national rail network.
Farmrail has acquired 32 more open-top hoppers for movements of crushed stone. The enlarged fleet of 76 cars will provide capacity to handle up to 350,000 tons annually.
Farmrail is a joint-venture partner in Marquette Rail, a newly formed short line that begins operation of 129 miles of lines in western Michigan leased from CSX Transportation on November 12. All administrative support for the new company is to be performed at our Clinton headquarters.
The most unusual traffic in the railroad’s history, structural components for a new windpower project, are being shipped to Frederick this month from abroad. The oversized loads arrive in specially designed unit-trains for transloading and truck delivery to the development site north of Lawton.
Increased track work is evident throughout Farmrail’s 347-mile system, spurred by a three-year federal tax credit for infrastructure improvement enacted last October. This program will strengthen the most active segments to handle the higher level of traffic now moving over the railroad.
Custer City Co-op has become a regional distribution point for liquid and dry fertilizer to be received by rail and delivered to users by rail or truck. The new facilities - 8,000 tons of flat storage and tank capacity of 4,500 tons - should reduce costs for area farmers by allowing product to be purchased and transported during the off-season for nearby storage.
July 22 marks the 10th anniversary of our Finger Lakes Railway affiliate in upstate New York. The 154-mile cluster of lines confirms the possibilities for revitalizing properties neglected by previous owners. Improved service and aggressive marketing has raised annual traffic from less than 6,000 carloads to nearly 16,000 last year. FGLK not only is doing more business with its inherited customers, but has caused others that had given up on rail transportation to return and also attracted several new industries to locate on line.
Oilfield supplier Weatherford Fracturing Technologies becomes a new customer next month. It will occupy an existing warehouse in Clinton and construct a storage tank for sand formerly trucked into the Anadarko Basin.
Another excellent western Oklahoma wheat crop is expected to be harvested starting this month, placing heavy short-term demands on railroads to move what cannot be stored in country elevators. Car supply and system congestion are likely to cause problems, since the former practice of positioning 1,000 hoppers in advance will not be possible. As was the case last year, trains will deliver some empties from the north and return with wheat to terminals at Enid to ease the heavy flow of grain to export points.
The unloading spur at Elk City’s new stone-distribution terminal will be extended and double-ended to improve switching efficiency for increased traffic there. Construction is to take place during June and July, following completion of several pre-harvest maintenance projects.
Though rail safety statistics continue to improve in terms of train incidents and employee injuries, the number of senseless and preventable deaths from car-train collisions and illegal trespassers remains discouraging. The 849 people killed last year represent a slight increase from 833 in 2003. While “Operation Lifesaver” and various other safety initiatives have been beneficial, there is no substitute for common sense on the part of the public.
Faced with rising maintenance budgets, state transportation officials are realizing the importance of remaining rail lines in reducing shipments of heavy commodities on the highways. Since a 100-ton railcar lading represents four truckloads and a single semi-trailer inflicts pavement damage equivalent to 9,600 automobiles, one benefit of rail transportation becomes quite evident.
Five new rail-served customer facilities were built or reactivated on Farmrail lines during 2004, a good sign for the economy of western Oklahoma. In addition to Elk City's new stone terminal, they included a grain load-out at Hobart, drilling-fluids supplier at Clinton, and liquid fertilizer installations at Custer City and Frederick.
Our employee-owners wish all Farmrail's customers, suppliers, neighbors and friends the best of holiday seasons and look forward to a safe and rewarding new year.
The final phase of 2004 track maintenance and improvement calls for the installation of an additional 12,000 ties, bringing the record total for the year to about 28,000. Rather than dealing with identified problems strictly from a safety standpoint, this program should bring extended portions of the railroad into compliance with Federal Railroad Administration Class 2 track standards for several years, such that slow orders and normal maintenance needs can be minimized in those areas and future work concentrated elsewhere.
Several freight customers already have taken advantage of electronic billing, now offered by Farmrail as a free service enhancement. This time-saving feature improves the accuracy of data transmissions and reduces the risk of clerical errors that can result in shipment delays or misroutings.
Champion Drilling Fluids of Oklahoma City is consolidating its operations serving the Anadarko Basin from four locations to a single facility at Clinton. Construction of a spur track off the State-owned "Sunbelt Line" will begin soon to provide rail access to an existing building now occupied by Champion and additional acreage available for industrial development.
Western Oklahoma enjoyed its best harvest since 1998, as favorable weather produced above-average yields and brought the crop in early and quickly. Farmrail moved 6.1-million bushels between May 26 and June 30, equivalent to 7,168 truckloads.
Farmrail's power roster increased to 19 units with the purchase of an additional GP-10 locomotive, increasing the Company's ability to handle heavier tonnage.
"Quartz Mountain Flyer" passenger excursions will be offered to the public on eight Saturdays this year, beginning July 3. Two-hour narrated round trips for up to 130 persons will depart from Quartz Mountain (intersection of Routes 44 and 44A) at 10:00 a.m. and include a brief stop-over at Lone Wolf. Coach ticket prices are $15 for adults and $10 for children aged 4 thru 12; infants ride free. A very limited number of one-way locomotive cab rides are available for an additional $25. See the full 2004 Public Excursion Schedule and then call 580-846-9078 or e-mail email@example.com for information and reservations to assure seating. Major credit cards are accepted, subject to 24 hours' advance notice of cancellation. Follow up the train ride with lunch at the spectacular Quartz Mountain Resort, an afternoon enjoying the recreational amenities of Quartz Mountain Park, and overnight accommodations if desired. The "Flyer" is a cooperative presentation of the friendly people of Lone Wolf, Farmrail and Oklahoma Department of Transportation.
Possible railcar shortages for the coming harvest affect planning by railroad and shippers alike. Burlington Northern Santa Fe advises that it may unable to supply hoppers for early positioning due to unusual demand throughout its system. A limited supply of guaranteed cars can be purchased on the open market, but tariff orders for interline movements will be filled only by lottery. Elevator managers therefore must be prepared to deal with potential overflow conditions. GNBC’s car fleet will be used only for local traffic to the Enid terminal in order to access additional storage capacity. All orders should be placed with Cathy Pierce at 800-933-7345.
Farmrail's GNBC subsidiary has won the American Short Line and Regional Railroad Association's 2003 Gold Safety Award for carriers of its size. Neither it nor FMRC experienced a reportable employee injury during the year.
Anyone who thinks that a train ride isn't very romantic should consult the young man from Elk City who proposed (successfully) to his sweetheart on a Valentine's Day excursion organized by the Grandview Assembly of God. Two packed carloads of romantics not only enjoyed his good fortune, but also crisp winter weather, tasty food and festive decorations on a three-hour round trip to Clinton.
District 3 Congressman Frank Lucas is among 265 House co-sponsors of federal legislation that would provide tax credits for small railroads to invest in needed track maintenance and upgrading. Many rural carriers like Farmrail operate on infrastructure designed and built nearly a century ago, when the typical loaded freight car weighed about 100,000 pounds. The newest generation of rolling stock weighs 286,000 pounds and cannot be handled safely or at reasonable speeds on many branches. The nation's 500-odd short lines are critical competitive transportation links between outlying communities and the inter-city main-line network that must be technologically compatible. Rep. Lucas and the majority of his colleagues recognize that rebuilding these rail lines keeps country elevators and other local industries competitive in their markets, is essential to future industrial development, and helps to reduce highway pavement damage by heavy trucks (one railcar is equivalent to up to four truckloads). Towns that have lost rail service aren't quite the same once the tracks have been removed.
FMRC is constructing a 1,500-foot spur to a new stone-distribution terminal being built by Elk City Industrial Authority on a 160-acre industrial tract in that community. Granite aggregates will be shipped by rail from the Martin Marietta quarry at Long, Oklahoma in a dedicated fleet of 44 open-top hoppers being acquired by FMRC and the Authority. Start-up is expected in the first quarter of 2004. The high-quality rock will be used primarily in paving projects throughout western Oklahoma and the Texas Panhandle.