Dow Industrial Rail Services Transition Complete in U.S.

Watco’s Industrial Rail Services, which services customers inside Dow Chemical plants, has achieved its most recent of several major milestones with the transition of key services, formerly provided by third parties, to Watco.

Watco purchased the rail assets at six Dow Chemical facilities, in the U.S. and Canada in the summer of 2020. The acquisition of the rail assets inside the plants, including track, railcar storage yards, and hopper car wash facilities was the basis for services Watco would later self-perform: railcar switching, railcar storage, hopper car cleaning, and track maintenance. In July of 2021, nine months after the completion of the acquisition, Watco began a staggered transition of those services from existing providers to Watco.

Over a period of 15 months, the Watco team accomplished an impressive feat of successfully transitioning the switching and hopper car wash services at the U.S. sites from existing service providers to being performed by Watco’s own team members. This transition saw more than 300 team members join Watco. The changeover was complete at the four U.S. locations: in Texas (Freeport and Seadrift) and Louisiana (Plaquemine and St. Charles) as of January 1. At that time, Watco added another 60 new team members to provide track maintenance services at the sites.

“We are excited to complete the transition at all U.S. sites,” said Sales Director Caleb Dellasega. “The work that the operations team has done to successfully transition the switching and hopper car services has been extraordinary and has set the foundation for our long-term partnership with Dow and our other customers at these sites.”

Having Watco provide its rail-oriented expertise in these industrial operations allows customers to focus on their core business, and the nature of the acquisition has brought other benefits as well. “We are not just a service provider with a short-term agreement,” said Dellasega. “With a long-term agreement in place, we are in a unique position to bring additional value to our customers and be a partner with them – we are in it for the long haul just like they are and have a vested interest in their success. And our teams now feel a renewed sense of ownership in their day-to-day operations knowing that the Watco team and culture is there to stay.”

The transitions at each site brought in unique challenges, but the team members responded to each challenge and overcame them through hard work and cooperation. “I could not be happier with the team and their performance during this time,” said Vice President of Operations Jason Eliot, “I know that I speak for all team members when I say that we are extremely happy to be Watco family members, and we look forward to what the future holds. We understand there are going to be new challenges and opportunities going into 2023, but with the Own It mindset that we all share, the future is bright for Industrial Rail.”

Dow is one of the world’s largest producers of polyethylene. Polyethylene pellets are produced and loaded into railcars which are then transported across North America, or exported globally, to be used in a number of industries. The application of polyethylene goes far beyond common uses such as water bottles and other packaging uses. Dow’s products are also used to support products in the construction, automobile, and healthcare industries.

In addition to serving Dow, Watco performs rail services for 12 other customers across the six sites. “To be able to connect with these customers and make Watco’s services a part of their value chain was a key piece in this transaction,” said Dellasega.

“A number of these customers, including Dow, were already receiving Watco’s services at other sites prior to the acquisition, which allowed for a smooth transition, as they were comfortable knowing the level of service Watco would provide.”