History Of The

The story of the Wheeling & Lake Erie Railway Company is one that tracks closely with American railroading history. The original Wheeling & Lake Erie was part of rail's westward expansion into the new American frontier in the early 1800s. That line, across the northern third of Ohio, eventually became the Nickel Plate Railroad. When the Nickel Plate and the Norfolk & Western (N&W) merged, and the N&W merged with the Southern Railway, it became the Norfolk Southern (NS).

But when the railroads were deregulated in the 1980s, an era of consolidation began. The NS spun off its lines from Bellevue, near Lake Erie, to the Ohio River, and east to Hagerstown, Md. An investor group purchased the property and the "new" Wheeling & Lake Erie (W&LE) was born.

It was a shaky start. The investors faced a system saddled with debt, leased equipment, and a revenue base largely dependent on Ohio coal.

"In early 1992, fully a third of our gross revenues were tied up in coal," recalls Reggie Thompson, the W&LE's vice president of marketing, sales and real estate. "By September of `92, half the coal hauled on the line disappeared when the Saginaw Mine shut down. It got my attention!"

As a result, a management team headed by Larry Parsons went to work. Parsons crafted a corporate strategy emphasizing equipment upgrades, a new customer focus, and a diversified customer base. Four years later, the improvement is dramatic. "We're now a $40 million-plus company with 120,000 carloads a year," says Thompson.

The railroad was bought by its management team, making it Ohio-owned and operated. Coal is now just six percent of the W&LE's revenue picture-and the future looks bright. "This area's ripe," Thompson says. "Northeastern Ohio is growing by leaps and bounds. There's a lot out here."

Steel comes back

A large part of the W&LE's recent success is fueled by the rebirth of another traditional Ohio industry-steel. Five steel mills are on the line: LTV, Wheeling- Pittsburgh, USX, Republic, and Timken. Like the railroads, these companies are finding new niches, and injecting new life into an old industry. Thompson says the new breed of steel company is more than happy to welcome the new breed of railroad like the W&LE. "We're a small railroad," says Thompson. "We have the flexibility to do things the big guys can't do. We can move a lot faster."

To meet customer's needs, the W&LE can partner with larger carriers. For example, W&LE and NS recently combined their resources for a 200-mile move, taking steel coils from U.S. Steel's Irvin Works in Pittsburgh to the new Pro Tec steel coating plant in Leipsic, Ohio. This new state-of-the-art mini-mill applies a coating that protects the steel from rust, while permitting automotive finishes to adhere to the metal. Pro Tec requires clean, rust-free inbound steel. To win the business, the W&LE spent over $2.5 million to buy 40 new covered coil cars. "They were impressed," says Thompson of his new customers, "but that's what you have to do."

Pulling plastic pellets

Traveling through Akron and northeast Ohio, the railroad serves the heart of the nation's polymer industry. As coal tonnage has declined, it's being replaced by railcar after railcar of plastic resins. It's an industry that sprung from the labs of the rubber companies based in Akron. Today, Ohio leads the nation in plastics employment and plastic products shipments. Plastics is a $15 billion-plus a year industry in the state. The Wheeling & Lake Erie stays in step with an industry that's growing twice as fast as the U.S. domestic product because it is fast and flexible.

The new W&LE will always go the extra mile for its customers. The railroad teamed up with Akron Storage and Warehouse, a large logistics company that devotes a 300,000- square-foot building to the storage of plastic resins for customers. The W&LE brings hoppers full of resins to a 50-car storage track where it has created special inspection areas, so loads can be checked and sealed before the pellets ever reach a production plant. "This is what the customers demanded," says Thompson, "so we made accommodations for them."

The Wheeling has over 500 customers on its 800 miles of rail. Technically, a Class II regional railroad, the line runs from Bellevue in northwest Ohio to Hagerstown, Maryland. It connects with the CSXT, Norfolk Southern, Conrail, and a number of short line railroads. The railroad and the state of Ohio rail program have invested heavily in track maintenance. "It's really in excellent shape," admits Thompson.

The railroad's 53 locomotives and 1,600 cars are kept up to snuff in the company's updated locomotive and car repair facility in Brewster. In addition, the Wheeling can offer customers expert maintenance service for customer-owned rolling stock. "We have the mechanics, we have the parts, we have the people, we have the expertise, and we're easy to work with," says Thompson.

Keeping the entire railroad customer- focused is the goal of the management team. Thompson explains, "Everybody in the company is involved in marketing and sales in one form or fashion. We want everybody to be aware of who the customers are-those are the people paying the bills."

For new or expanding companies, the Wheeling offers assistance through its real estate and industrial development divisions. The railroad can smooth the way for new development by helping a company locate a site, and bring in development organizations at the state and local levels. The Wheeling also has a subsidiary rail construction company to help customers with track installations.

The future: NEOMODAL

The new $11.2 million intermodal facility that the W&LE manages near Canton is described by Reggie Thompson, vice president, marketing, sales and real estate, as "a gift that comes twinkling down from heaven." Neomodal, as it's called, is a brand new intermodal yard built with a combination of federal, state, and local funds. Adjacent to the yard is the Neocom Park with over a thousand acres of prime industrial land. Neocom is ideal for shippers who want to take advantage of the cost savings inherent in intermodal shipping.

"Every time we turn around in this part of the world," says Thompson, "something new and exciting is happening-we just happen to be in a great location."

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