Seward freight boom to help save ARRC

 

Freight at Intermodal Railroad Terminal Wed March 13, 2013 Heid Zemach photo.

Freight at Intermodal Railroad Terminal Wed March 13, 2013 Heid Zemach photo.

The Alaska Railroad Corporation is looking to Seward, and the booming freight market it hopes to take advantage of here as a way to help overcome losses in other areas, such as losses from its formerly lucrative coal and petroleum customers. Freight revenue at the Seward railroad dock has increased 142 percent since 2008, bringing in $1.248 million last year, surpassing the $1.209 million received from cruise ships.  In 2011, freight accounted for almost $940,000, while cruise ships brought in $1.3 million, and in 2010 it was only $655,000 to the cruise ship’s $1 million.

Last week ARRC announced it was eliminating 29 more positions statewide which represent an 8% reduction in the year-round and seasonal ARRC workforce, and equates to an annual estimated cost savings of $4.5 million in wage, salary and benefit costs. ARRC said it has experienced a $45 million negative swing in finances from 2011 until now.  Contributing factors include a significant drop in revenue from key freight customers (coal and petroleum), millions less in federal funding, along with a jump in required matching funds, and at least $15 million per year required to implement a positive train control (PTC) system as required by federal mandate.

ARRC coal train, although fewer now, have begun hauling more freight lately. Heidi Zemach photo

ARRC coal train, although fewer now, have begun hauling more freight lately. Heidi Zemach photo

The same week, however, ARRC officials presented its board of directors with an ambitious $80 million expanded master plan to develop its land at, and around the port of Seward. The first two phases of the multi-step plan include widening its freight dock for $1.2 million, using 50,000 cubic yards of donated gravel; moving and fortifying the ARRC jetty, dredging the basin adjacent to it, and filling the uplands area to create an additional barge operation area. Currently, ships sometimes have to wait in line to unload or load up due to limited space, said Jim Kubitz, vice president of ARRC Real Estate and Facilities. Phase three would extend the freight dock.

There would also be about 10,000 additional feet of new (and replacement) track put in for trains to carry the goods directly to, and from the barges, and elsewhere. A set of tracks would run on the east side to access both of the waterfronts. There also would be tracks on the passenger dock, and perhaps 4,000-5,000 feet of tracks in the yard to store railcars, Kubitz said.



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Customers coming from Seattle, Tacoma or Canada, using barges to ship freight would benefit from the additional dock space, he said. Seward is at least a full day closer than the Port of Anchorage, in addition to being ice-free, and trains can get it to Anchorage in four to six hours, saving fuel and a day in each direction.

Phase four would develop leasable real estate to accommodate freight customer upland operations. Phase five would be to develop an operating area to accommodate freight customer growth, and an additional operating area to accommodate barge and intermodal freight activity. ARRC would extend Port Avenue road to connect with Airport Avenue, and provide utilities along a new roadway. It would likely be a private road, perhaps with a security-gate, as those businesses would be related directly to railroad operations, Kubitz said.  They also would install track through the intermodal operating area to connect to the freight dock. ARRC also would develop the filled pond north of the coal loading facility as a long-term lease parcel, as needed.

The timing of the Master Plan announcement, which came after updating ARRC’s board, was odd in light of that week’s firings and restructuring, Kubitz admits. “But it’s also a strategic move that the board and management feel we have to do to create more revenue,” he said.

After talking with railroad customers in Seward about their growing needs last summer, what was originally to have been just a dock extension has evolved to include creating another railroad barge basin for ships, and more upland long-term lease areas nearby to support them, Kubitz said.

“We want to grow the railroad, and this part of Alaska is such a good entrance into Alaska,” he said. “I started recognizing the opportunity that existed in Seward about two years ago,” he said. Also its prime location in terms of having a harbor, railroad and road system, and recognizing that industry appears to be discovering that Seward is a great place to do business. But idea was not put on paper until the last six or eight months, with financing from a U.S. Department of Transportation TIGER grant.

Kubitz does not see ARRC’s growth as tied in with new developments at Seward Marine Industrial Center to accommodate the Coastal Villages fleet, and to meet other shipping needs. But both efforts will help Seward grow, he said, and career-training provided at AVTEC will likely play an important role in the future.

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2 Comments

  1. This sounds great!