100 Years of Passengers, Freight, and Real Estate

The Alaska Railroad’s centennial

By Amy Newman

Catch a glimpse of the Alaska Railroad snaking its way south to Seward or crossing Hurricane Gulch between Talkeetna and Denali Park, its passengers snapping photographs from a glass-domed car or open-air viewing platform, and you’d be inclined to think the railroad is just another piece of the Alaska tourism puzzle.

But the Alaska Railroad, which celebrates its 100th anniversary this year, is so much more. The last fullservice railroad in the country, it’s a vital piece of infrastructure that literally and figuratively keeps Alaska moving. Each year, the railroad transports tourists and residents, delivers freight, and develops its vast real estate holdings to benefit both the railroad and Alaska’s economy.

“The railroad is a big, big deal all around for residents of Alaska… the passenger and freight and real estate sides,” says Alaska Railroad Corporation President and CEO Bill O’Leary, who in 2013 became the first lifelong Alaskan to hold the position. “It’s really critical for Alaska to have this infrastructure in place.”

The infrastructure, which supports the railroad’s combined passenger and freight service, includes 656 miles of track; 170 bridges and culverts; 793 freight and passenger cars; rail yards in Seward, Whittier, Anchorage, and Fairbanks; 10 rail depots; and 36,000 acres of land.

“People have a tendency to think about railroads as, ‘How quaint, how 19th century,’ but so much of this is driven by cutting-edge type technology now,” O’Leary says. “It’s quite incredible what modern railroads are about. It’s not your grandfather’s railroad anymore.”

Quasi-Public Corporation

The Alaska Railroad was officially born on July 15, 1923, when President Warren G. Harding drove the golden spike in Nenana, signifying the end of construction. But the history of the tracks stretches to 1903, when the Alaska Central Railway built the first railroad in Southcentral. Headquartered in Seward, the railroad extended 50 miles north; seven years later, it was renamed the Alaskan

Northern Railway Co. and extended another 21 miles to Kern Creek, near Girdwood.

In 1914 the federal government, looking to access Interior mineral deposits while skirting a private railroad out of Cordova, authorized $35 million to construct and operate the Alaska Railroad. The project extended the tracks from Seward to the Tanana Valley Railroad yard in Fairbanks and relocated headquarters to Ship Creek, which became the town of Anchorage.

The railroad’s first profitable year was 1938, and World War II saw profits continue to grow as the railroad hauled military and civilian supplies and materials. Car-barge service out of Whittier began in 1962, followed by train-ship service in 1964. Trainship service, managed by Lynden Alaska Marine Lines, enables rail cars to be transferred directly from train to barge in Seattle for transport to the railroad’s Whittier dock; the rail cars are then loaded directly from the barge to the railroad for delivery to any destination along the railroad’s route.

In the ‘70s “the railroad was in really bad shape, it was falling apart,” says Jim Kubitz, vice president of real estate and facilities at the Alaska Railroad. “The feds wanted to get rid of it.”

The state, however, “recognized the railroad’s importance as a key piece of infrastructure,” O’Leary says, and in 1985 bought it from the federal government for $22 million.

The quasi-public Alaska Railroad Corporation (ARRC) oversees railroad operations and management. Headed by a seven-member board of directors appointed by the governor, the ARRC is tasked with ensuring the railroad provides safe, efficient, and economical transportation and real estate services that grow and support development opportunities. State law mandates that the ARRC operates as a self-sustaining entity, which means it is solely responsible for its legal and financial obligations.

“It’s designed to smell, taste, and feel like private industry, but it is still very much owned by the state,” O’Leary says. “By and large we make our money the old-fashioned way—we go out and earn it.”

The railroad earns its revenue through a mix of freight and passenger services, its real estate holdings, and federal grants.

Freight from the Lower 48

When it comes to revenue, the railroad’s cash cow is its freight service. In 2022, the railroad earned $110 million, or 44 percent of its annual revenue, transporting 3.7 million tons of freight. Freight service is provided from the railroad ports in Whittier, Seward, Anchorage, and Fairbanks.

Alaska Railroad (AKRR) operations budget analyst Scott Winther explains, “It’s groceries and dry goods, supplies to Home Depot and Lowe’s, that type of freight, as well as other project freight,” which can include goods like lumber, heavy machinery, and rebar.

The Alaska Railroad also transports materials directly from the Lower 48 through the Alaska Rail-Marine Service. Working in partnership with Lynden Alaska Marine Lines, materials purchased in the Lower 48 are delivered to the railroad’s Seattle dock and loaded onto the barge via Lynden’s rail barge. The patented system allows rail cars to roll between train and barge, which improves efficiency and increases the amount of cargo that can be shipped.

“The barge can hold fifty rail cars on a good day,” O’Leary says. “It’s a tremendously efficient and costeffective way of transporting heavy bulk cargo.”

Materials for the mining industry and chemicals for the oil fields are the major commodities shipped via rail barge, Winther says. Kubitz adds, “We haul a lot of powdery cement. People just don’t realize how many common things the railroad transports.”

The railroad’s freight service also makes it possible to deliver items that would be impossible to move by any other mode of transportation.

“If it wasn’t for the railroad, there wouldn’t be a windmill farm up in Healy,” Kubitz says. “The wind turbine arms were carried in special rail cars that were long and arched in the middle.”

There are secondary benefits to the railroad’s freight business as well. One train can carry the equivalent of hundreds of truckloads. Winther says trailer companies typically move between 150 to 200 trailers per week