Ann Arbor Railroad Wins Business Development Award

It’s always a win if the various Watco teams can come together and make something special happen for a customer. To get an award recognizing their efforts is just icing on the cake. The Ann Arbor Railroad recently won the American Short Line and Reginal Railroad Association’s (ASLRRA) 2020 Business Development Award for their work on finished vehicle logistics.

Criteria for the award included demonstrating one of the following: utilization of the railroad’s unique operating characteristics to deliver value; partnership with other development authorities, Class 1s, or companies; delivering economic success to both the railroad and the community it serves. The Ann Arbor was able to meet the criteria with a project described in the award-winning submission that follows.

Silver Creek Vehicle Distribution and Homologation Center When a vehicle rolls off the factory line, there is often an additional step in the process before the unit gets sent on to its final destination. This is the customization piece, where the vehicles are given those final touches that make it meet the new owner’s or dealer’s exact specifications, whether it’s graphics, chrome accents, headliners, chrome packages, or a variety of other extras. Watco’s Ann Arbor Railroad has the opportunity to transport many such vehicles and, thanks to a lot of hard work by the Ann Arbor team, a customized solution was developed to solve a customer’s problem in handling what the automobile industry calls finished vehicles. ANTICIPATING CUSTOMER NEEDS Short line railroads specialize in not only getting our customer’s products from A to B, but more importantly, in understanding our customers and their needs, and then finding ways to meet those needs. The Ann Arbor team was following the auto industry’s sales and production trends and recognized a possible need for additional capacity in the finished vehicle distribution network. After discovering this need within the overall finished vehicle distribution network, including the growing truck/SUV market, Ann Arbor approached Fiat Chrysler Automobiles (FCA) about their future requirements for distribution and homologation services in Toledo, Ohio, supporting Toledo and Detroit assembly production. FCA confirmed their desire and need, and development work on the Silver Creek Vehicle Distribution and Homologation Center began in late 2018. CREATING A SOLUTION Ann Arbor had a perfect location for a new space dedicated to finished vehicle distribution. The Temperance rail yard in Toledo had been used for various transloading and mechanical projects, but nothing significant or long term. In 2005, during the housing boom, 84 Lumber leased and constructed a 28,000 square foot building at the rear of the yard to assemble prefabricated homes and trusses. During the 2008-2009 recession, 84 Lumber closed their adjacent terminal, but maintained the lease on the building and surrounding paved three acres. The Ann Arbor team worked with 84 Lumber, who was eager to assist with the opportunity, and obtained ownership of the building and acreage within a three-week period. Basic grading was completed on the property and then, to protect the customer’s investment, solid steel fencing with concrete highway barricades was completed on the property in March 2019. This completion date was planned to support the initial launch of the Jeep ® Gladiator. From February to June 2019, Watco’s homologation partner modified and up-fit the building with vehicle lifts, lighting, air plants, and tools. Homologation services began in July 2019, handling the Jeep Wrangler product from the Toledo assembly plant. Temporary lighting was utilized until November 2019 when permanent LED lighting was installed. EXECUTING THE PLAN This facility is Ann Arbor’s fifth vehicle distribution center and covers approximately 20 acres. It has a state-of-the-art 28,000 square foot homologation building, a 12-car rail spot with the ability to handle a 90-car auto rack train with inbound/outbound haul-away carrier and drive-away shuttle services. The Homologation Center handles 510+ through-put vehicles per day, with current Vehicle Distribution Center capacity at approximately 1,800+ vehicles. “Congratulations to the Ann Arbor Team. This is one group who is constantly thinking outside of the box and looking for new ways to grow.” - Jimmy Patterson, SVP of Sales — Railroads

The new workflow is as follows; when the finished vehicles roll off the line, they are staged nearby for immediate loading onto railcars or to be sent over to the Homologation Center where custom options and packages are added. The Ann Arbor team drives the vehicles to the center in a small convoy of around 10 vehicles at a time to the Silver Creek Distribution facility. Our team is shuttled back to the plant for the next round and the contractor begins their work on the recent arrivals. After the custom work is complete, the vehicles are staged in the Ottawa South Yard, where the Ann Arbor also has two loading tracks. The team loads and secures the vehicles into the autoracks, prepares the railcars for shipment, and switches the loaded cars out of the yard for interchange with our Class I partners.

PROTECTING TOLEDO JOBS The project expanded revenue opportunities for Ann Arbor Railroad and all of our partners involved in the project while creating efficiencies and cost savings for the customer. The project has created approximately 102 full time jobs; 52 with Argus

Corporation and 40 with Auto Warehousing Corporation. The Ann Arbor was able to fit the additional rail moves into current job assignments adding little to no additional operating expenses. The Ann Arbor team worked with a number of partners to make the project a reality. The Ann Arbor Railroad handled the overall project concept and initial presentation to FCA. They are also the facility owner, designer, contractor and operator. Ann Arbor’s customers; Auto Warehousing Corporation, Argus Corporation, and FCA all worked together to drive the project to completion. One remaining phase of the development process is left for completion. The need for the facility was immediate due to customer and market demand, and it was pressed into service prior to fully paving the facility. By being apprised of market trends, and anticipating customer needs, the Ann Arbor Railroad was able to repurpose an unused facility, have a positive impact on all parties involved, and help stabilize the local economy.