New Short Lines Begin Operations

The first trains on Watco’s Fox Valley & Lake Superior Rail System (FOXY), the Grand Elk Railroad’s (GDLK) upper Michigan line, and the Agawa Canyon Railroad (ACR) made their maiden journeys without a hitch.

In the days leading up to the launch of operations, teams were warned about below-zero temperatures that were predicted at startup. The temperatures ranged between 1° and 19° in Wisconsin as operations got under way for the FOXY, and it turned out to be a bit warmer for the ACR.

Watco officially began operations on the FOXY at 12:01 a.m. January 29. About six hours later, a local switching crew was lining up cars in CN’s Wausau Yard for the journey outbound, with stops at several customer locations on the lines north of Wausau.

“Things went very well that first day,” said Jason Danz, who’s no stranger to the cold or Wisconsin. He moved from Watco’s Kansas & Oklahoma Railroad (KO) to become general manager of the FOXY, but prior to his KO stint was at the Wisconsin & Southern Railroad (WSOR). “But most of all I want to thank everyone who assisted in making the startup run so smooth. We couldn’t have done it without all of the help and support of the Watco team.”

The FOXY lines are one part of over 900 miles of track Watco purchased from CN in the U.S. and Canada. The Surface Transportation Board gave Watco regulatory approval in late December on the U.S. portion of the acquisition. The deal closed January 28. U.S. operations began January 29, and Canadian operations began February 1.

The acquisition includes roughly 660 miles of active track serving more than 100 customers. Four Watco railroads are owner-operators of the acquired trackage:

The new FOXY – The FOXY operates over 9 segments of track totaling 261 active track miles in Wisconsin and upper Michigan. The interchange locations are in Wisconsin at Wausau, Spencer, Appleton, and Green Bay with the CN and at Tomahawk with the Tomahawk Railroad. Customers in the region ship or manufacture commodities that include paperboard, siding, lumber, wood pulp, wheat, corn, canola, and other products. Team members are at 54 and counting.

The new ACR – This freight railroad, formerly the Algoma Central Railway, has about 25 customers including Algoma Steel. The ACR, stretching about 245 miles in Northern Ontario, anticipates about 36,000 carloads annually, with 80 percent of that being metals and forest products. The ACR will interchange at Sault Ste. Marie with the CN and the Huron Central Railway, at Oba with the CN, and at Franz with the CP. Part of the purchase includes a Sault Ste. Marie-based tour train that operates about during part of the summer and fall with scheduled excursions to the Agawa Canyon Wilderness Park and back to Sault Ste. Marie.

ACR Director of Operations Wes Logan joined Watco in April from the transportation division of J.D. Irving’s New Brunswick and Maine operations. He’s been busy since then preparing his team of 27 for operations of the first Watco-owned railroad in Canada. “We worked closely with the province of Ontario as well as Transport Canada and CN to ensure we had all of our regulatory certificates to operate a railroad in Canada. We needed a Railway Operating Certificate from Transport Canada and a Shortline Operating License from the province of Ontario to begin operations.” In addition, they worked to hire and train team members local to the area, move equipment from the U.S. and line up assets in Canada such as locomotives, maintenance of way equipment, trucks, tools, and other supplies.

The GDLK - Already operating in Michigan’s Lower Peninsula, has taken on about 95 track miles comprising the Newberry Subdivision in Michigan’s Upper Peninsula. More than 1,200 carloads of siding, paper, timber, and other products were hauled on the Newberry Sub in 2019. Five team members support the GDLK Newberry line, which interchanges with the CN at Trout Lake, Wisc.

The WSOR began operations on 44 track miles on three newly added lines in southeastern Wisconsin. The WSOR has added the Eden Spur, interchanging with the CN at Fond Du Lac, and two lines that it connects to already: the Saukville and West Bend lines, interchanging with the CN at Ackerville. Steel products and lime made up more than half of the nearly 2,500 carloads transported in 2019.

Doug Conway, vice president of sales over the new lines, said the Watco team is excited to add these lines and customers to our service offerings. “While we were waiting for regulatory approval, our team has been talking to customers, communities, economic development groups, and interested parties about our plans,” he said. “The most important message we communicated: Watco is here to make a difference. We have been very focused on Day 1 and ensuring the transition was smooth for both the customers and CN."

“Moving forward, we know we have a tremendous opportunity to earn new business with our customers through our first mile/last mile service and our creative approach to developing new business and solving logistics and supply chain problems.”

Editor’s Note: We’ve had a lot of interest in our FOXY and ACR hats! Those are available for order at watcogear.com/hats, then select style, color, and logo from the dropdown menus.