Watco
TypeFreight Transportation Services and Logistics
IndustryRailroads

Logistics

Terminals & Ports
FoundedJuly 1 , 1983
FounderCharles R. "Dick" Webb [1]
HeadquartersPittsburg, KS 66762
Area served
North America and Australia
Key people
Dan Smith, CEO
Number of employees
4,800
Websitewww.watco.com

Watco Companies, L.L.C. (Watco) Watco is an American transportation and logistics company based in Pittsburg, Kansas. The company’s core services are freight transportation, material handling and storage, logistics, railcar repair and maintenance.

Watco owns and/or operates 45 short line railroads in North America and Australia, with more than 8,000 miles of track connecting to Class I railroads. It is one of the largest short line owner-operators in the U.S. The company also operates, and in many cases owns, over 70 transload and marine terminals, and a handful of terminals that specialize in the repair and maintenance of railcars and locomotives.

Watco employs about 4,800 team members, led by Chief Executive Officer Dan Smith. The company earned $1.6 billion in revenues in 2022.

In 2023, the company was certified by Best Practice Institute (BPI) for the second year in a row as a Most Loved Workplace. In 2022, in collaboration with BPI, Newsweek named Watco to its annual list of America’s Top 100 Most Loved Workplaces. Watco was also named a 2023 Newsweek Top 100 Global Most Loved Workplace®. [2]

History

CBH class hauled train at Yilliminning, Western Australia in October 2013
Watco Santa Fe CF7 #5 at Pittsburg, Texas in August 2015

Watco was established in 1983 by Charles R. "Dick" Webb. The first operation was an industrial switching operation in DeRidder, Louisiana that is still in existence. Webb then started his first mechanical operation, a railcar repair shop in Coffeyville, Kansas in 1985.

The Coffeyville mechanical shop was held captive to the major rail lines, and during discussions with the Union Pacific the opportunity arose to purchase the line running from Nevada, Missouri, to Coffeyville. This was the Union Pacific's first short-line sale. Watco then looked to the West Region, acquiring the Blue Mountain Railroad in 1998, the Palouse River and Coulee City Railroad in 1992 and the Eastern Idaho Railroad in 1993.

In 1998, it began operating the Stillwater Central Railroad in Oklahoma and the Timber Rock Railroad in Texas. The Kansas & Oklahoma Railroad was acquired in 2001 and the Pennsylvania Southwestern Railroad in 2003. In 2004, they started operations of the Great Northwest Railroad in Washington, the Kaw River in Kansas and Missouri, and the Mission Mountain Railroad in Montana. In 2005 it began operating the Alabama Southern Railroad, the Louisiana Southern Railroad, the Mississippi Southern Railroad, and the Yellowstone Valley Railroad in Montana. The Austin Western Railroad was started in 2007 and shares rail with passenger rail. It also acquired Millennium Rail, a mechanical service company in 2007. The Baton Rouge Southern and the Pacific Sun Railroad were started in 2008, and they also acquired the mechanical services company Fitzgerald Railcar Services and Reload, a 25-year experienced transloading business. The Grand Elk Railroad began operations in 2009.

In December 2010 Watco entered the Australian rail haulage market when it was awarded a 10-year contract to operate grain services for the CBH Group of Western Australia.[3][4] Operations commenced in March 2012.[5][6] In late 2016 Watco Australia was awarded an infrastructure train contract with Brookfield Rail operating ballast and rail work trains.

On December 15, 2010, Kinder Morgan Energy Partners, announced an agreement whereby it would invest up to $150 million over the next year in Watco in exchange for a preferred equity position in the company. Kinder Morgan made an initial $50 million preferred shares investment on January 3, 2011.[7] Additional $50 million equity investment completed in December 2011.[8] Kinder Morgan will receive 3.25% quarterly distribution on the equity investment. Kinder Morgan is a leading pipeline transportation and energy storage company in North America. The transaction provides capital to Watco for further expansion of specific projects and offers Kinder Morgan the opportunity to share in the subsequent growth.

In April 2011, Watco began operating the Autauga Northern Railroad, between Maplesville and Autauga Creek, Alabama, the third short line in Alabama operated by Watco.[9]

On December 28, 2011, Watco began operations of the Swan Ranch Railroad[10] in the Swan Ranch Industrial Park in Cheyenne, Wyoming. On January 1, 2012, Watco gained majority ownership of the Wisconsin & Southern Railroad, a regional railroad in Wisconsin, and on February 1, 2012, took over operations of the Birmingham Southern Railroad.[11][12]

On June 4, 2014, Watco and The Greenbrier Companies announced that it would create an equally owned joint venture, GBW Railcar Services, providing railcar repair services.[13] This joint venture was dissolved in August 2018.[14]

In July 2018, Dan Smith was named Watco's new CEO.[15]

On March 30, 2021, Watco and Canadian National subsidiary Wisconsin Central reached a deal whereby WCL would sell roughly 900 miles of non-core rail lines located in Michigan, Wisconsin, and Ontario to Watco.[16]

In January 2022, Watco takes over operations to move cattle in Queensland CBH Group to Aurizon.[17]

Holdings

Railroad Began operations Track length (mi.) Commodities Facts
Alabama Southern Railroad (ABS)November 200597.4 [18]iron and steel, paper products, aggregatesAcquired through lease agreement with KCS
Alabama Warrior Railway (ABWR)August 20092 [19]coal, aggregates, pipe, scrap steel, cementStarted as Marylee Railroad in 1895
Ann Arbor Railroad (AA)January 201391.6 [20]automotive materialsPurchased from Ann Arbor Acquisition Corp, services mostly Chrysler plant producing Jeep Cherokees
Arkansas Southern Railroad (ARS)October 200583 [21]corn and soybean productsTwo branches, 32-mile northern branch and a 30-mile southern branch
Austin Western Railroad (AWRR)October 2007204 [22][23]aggregates, crushed limestone, calcium bicarbonate, lumber, beer, chemicals, plastic, paperShares rail with commuter operations in Austin, Texas
Autauga Northern Railroad (AUT)April 201168.2 [24][25]paper products and aggregatesThird Watco Alabama short line
Baton Rouge Southern Railroad (BRS)November 200843[26]chemicals, bauxite, plastic pellets, raw coke, calcinated cokeProvides car storage and use by local chemical companies
Birmingham Terminal Railway (BHRR)February 2012178.3 [27]iron ore, coal, steel sheets and pipeProvides rail service to Port Birmingham
Blue Ridge Southern Railroad (BLU)July 2014104.8woodchips, chemicals, paper, cementFormer Norfolk Southern T-Line (Murphy Branch), W-Line, and TR-line. Based in Canton, NC.
Boise Valley Railroad (BVRR)November 2009100 [26]frozen vegetables, lumber, fertilizer, fuelsShares customers with the YSVR and EIRR
Cicero Central Railroad (CERR)2015[28]1.09 [28]pitch and other chemicals to create plastics.Serves the Koppers Stickney Plant
Decatur & Eastern Illinois Railroad (DREI)September 2018[29]239.5[30]chemicals, plastics, soybeans, and cornOperates on ex-CSX Transportation trackage acquired in 2018 and ex-Eastern Illinois Railroad trackage acquired in 2019
Dutchtown Southern Railroad (DUSR)202141.1 [31][32]products for the chemical, gas, and energy industriesoperates on trackage leased from Canadian National
Eastern Idaho Railroad (EIRR)1993391.8 [33]corn, sugar, wheat, frozen vegetables, coalLargest Union Pacific sale
Fox Valley and Lake Superior (FOXY)January 2022[34]609.8 [34]metals, forest products, building materials, chemicals, propane, and fuelFormer Canadian National lines; major interchanges are in Appleton, Green Bay, Spencer, and Wausau
Ithaca Central Railroad (ITHR)December 8, 201856.2[35]salt, plastics, magnesium chlorideLeased from Norfolk Southern
Geaux Geaux Railroad(GOGR) December 2018 39.21 paper products primary customer in paper industry
Grand Elk Railroad (GDLK)March 2009329.2[36]lumber products, corn, steelInterchanges with 3 Class I railroads
Great Northwest Railroad (GRNW)March 2004286 [37][38]lumber, products, fertilizers, aggregatesCompetition to reach Lewiston while the line was being built was called the "Clearwater River Railroad Wars"
Kanawha River Railroad (KNWA)July 2016384.8 [39]Chemicals, Aggregates, Agricultural ProductsSecond railroad to be acquired by Watco in the state of West Virginia. Appalachian & Ohio was briefly operated by Watco Transportation Services. Operates on former Norfolk Southern tracks in Ohio and West Virginia.
Kansas & Oklahoma Railroad (KO)July 2001974.4 [40][41]wheat, grain products, chemicals, soybean productsHas state and federal shipping agreements
Kaw River Railroad (KAW)June 200423.6 [42][43]iron and steel, corn starch, lumber products, aggregates, plastics, industrial productsExpansions in 2005, 2006, and 2007
Louisiana Southern Railroad (LAS)September 2005217.1 [44][45]paper products, aggregates, oilsInterchanges at Gibsland, Sibley, and Pineville
Mission Mountain Railroad (MMT)December 200426 [46][47]lumber, wheatRuns from Stryker to Eureka, served by the BNSF
Mississippi Southern Railroad (MSR)April 2005191.1[48][49]corn and soybeansInterchanges with KCS at Newton
Palouse River & Coulee City Railroad (PCC)1992307.8 [50]wheat, frozen vegetables$25 million in state-sponsored track rehabilitation backed by 100-year lease
Pennsylvania Southwestern Railroad (PSWR)April 200314.6[51][52]steel scrap, steel productsFirst Watco operation to service a steel mill
Pecos Valley Southern Railway (PVSR)201244.6sand, gravel, crude oilFormerly operated by Capitol Aggregates
San Antonio Central Railway (SAC)20128.6 [53]Warehousing, distribution, and transloadingOperates within Port San Antonio's East Kelly Railport at night
Stillwater Central Railroad (SLWC)1998399.9 [53]crude oil, sand, gypsum, cement, stone, steelServes on two branches: Pawnee to Stillwater and Tulsa to Duke
South Kansas & Oklahoma Railroad (SKOL)March 1987730.3 [53]grains, cement, coal, fertilizer, aggregates, steel, sandOperates out of the historic Cherryvale, Kansas depot and serves the Port of Catoosa at Tulsa, Oklahoma
Swan Ranch Railroad (SRRR)December 201121 [54]asphaltThe SRRR serves the Swan Ranch Industrial Park
Timber Rock Railroad (TIBR)199862.12 [55]aggregates, lumber products, plastics, fuelReduced to the single line running from Kirbyville, Texas to DeRidder, Louisiana.
Vicksburg Southern Railroad (VSOR)January 200648.25[56][57]lumber, steelDelivers to the Port of Vicksburg
Watco AustraliaMay 2012NA - operator onlygrainFirst international operation of Watco, providing service in Western Australia and Queensland
Wisconsin & Southern Railroad (WSOR)January 2012808.5 [58]lumber, coal, liquid and dry fertilizers, corn, beans, plastic, aggregates, ethanol, liquid petroleumWisconsin's second-largest railroad
Yellowstone Valley Railroad (YSVR)August 20054.3 [59][60]grains, plastics, ethanol, crude oil, sandProvides service to the Dore Transload Terminal and interchanges with the BNSF

References

  1. ↑ "About". Watco.
  2. ↑ Nancy, Cooper (June 9, 2023). "Most Loved Workplaces" (June 9, 2023): 39. {{cite journal}}: Cite journal requires |journal= (help)
  3. ↑ US group wins CBH contract from QR National The Australian December 14, 2010
  4. ↑ Watco wins CBH grain rail contract Archived 2014-02-03 at the Wayback Machine Rail Express December 15, 2010
  5. ↑ CBH, Watco rail agreement starts early Archived 2014-02-22 at the Wayback Machine World Grain April 2, 2012
  6. ↑ CBH grain wagons go to work early Archived 2014-02-22 at the Wayback Machine Farm Weekly’’ April 5, 2012
  7. ↑ "Kinder Morgan, Inc, Form 10-K, Annual Report, Filing Date Mar 2, 2011". secdatabase.com. Retrieved May 13, 2018.
  8. ↑ "Kinder Morgan, Inc, Form 10-K, Annual Report, Filing Date Feb 23, 2012" (PDF). secdatabase.com. Retrieved May 13, 2018.
  9. ↑ "Watco announces Alabama short line debut". Railway Age. 12 April 2011. Archived from the original on 6 December 2011. Retrieved 6 December 2011.
  10. ↑ "Watco to operate Swan Ranch Railroad in Wyoming". Trains. 30 November 2011. Retrieved 23 December 2011.
  11. ↑ "Watco to buy control of Wisconsin & Southern". Trains Magazine. 29 November 2011. Retrieved 23 December 2011.
  12. ↑ "Watco adds third railroad in a week". Trains. 2 December 2011. Retrieved 23 December 2011.
  13. ↑ "Greenbrier Companies, Inc, Form 8-K, Current Report, Filing Date Jun 4, 2014". secdatabase.com. Retrieved May 13, 2018.
  14. ↑ GBW Railcar Services uncouples Railway Age August 21, 2018
  15. ↑ Senese, Kyra (17 July 2018). "Smith new CEO at Watco". Railway Age. Retrieved 17 March 2023.
  16. ↑ "CN and Watco Reach Agreement on Sale of Rail Lines in Northern Ontario, Wisconsin, and Michigan | cn.ca". www.cn.ca.
  17. ↑ "Dedicated livestock rail freight provider wins Qld Central West contract". 9 July 2021.
  18. ↑ Alabama Southern Railroad, accessed June 2012
  19. ↑ STB Finance Docket No. 35204, June 2012
  20. ↑ Gardner, Paula (2012-12-29). "Kansas company enters agreement to buy Ann Arbor Railroad". Retrieved 2023-11-07.
  21. ↑ STB Finance Docket No. 34761, October 26, 2005
  22. ↑ Railroad Retirement Board, Employer Status Determination: Austin Western Railroad, Inc., January 22, 2008
  23. ↑ STB Finance Docket No. 35075, September 14, 2007
  24. ↑ Railroad Retirement Board, Employer Status Determination: Autauga Northern Railroad, Inc., April 14, 2011
  25. ↑ STB Finance Docket No. 35075, April 4, 2011
  26. 1 2 STB Finance Docket No. 35169, August 1, 2008
  27. ↑ "Birmingham Southern railway acquired". www.bizjournals.com. December 2, 2012. {{cite web}}: Missing or empty |url= (help)
  28. 1 2 "Cicero Central Railroad (CERR)".
  29. ↑ "Decatur & Eastern Illinois makes debut". Trains Magazine. September 10, 2018. Retrieved September 10, 2018.
  30. ↑ "Decatur & Eastern Illinois Railroad (DREI)".
  31. ↑ "Watco Holdings, Inc.-Continuance in Control Exemption-Dutchtown Southern Railroad, L.L.C." Federal Register. 2020-12-23. Retrieved 2021-05-01.
  32. ↑ "Dutchtown Southern Railroad". Watco. Retrieved 2021-05-01.
  33. ↑ STB Finance Docket No. 34045, June 12, 2001
  34. 1 2 Borchert, Hannah (August 2, 2022). "New rail system brings more train traffic to Wausau". WSAW-TV.
  35. ↑ "Ithaca Central Railroad (ITHR)". Watco Companies. 2018. Retrieved 2018-12-13. Ithaca Central Railroad (ITHR) begins operations on December 8, 2018. Watco leases the railroad from the Norfolk Southern Railway. The ITHR consists of 48.8 miles of track running north from Sayre, Pennsylvania, to Ludlowville, New York
  36. ↑ STB Finance Docket No. 35188, November 17, 2008
  37. ↑ Railroad Retirement Board, Employer Status Determination: Great Northwest Railroad, Inc., July 9, 2004
  38. ↑ STB Finance Docket No. 34475, March 19, 2004
  39. ↑ "Kanawha River Railroad (KNWA)".
  40. ↑ Kansas and Oklahoma Railroad Archived 2008-12-24 at the Wayback Machine, accessed December 2008
  41. ↑ STB Finance Docket No. 34042, June 12, 2001
  42. ↑ Kaw River Railroad Archived 2012-08-12 at the Wayback Machine, accessed December 2008
  43. ↑ STB Finance Docket No. 34510, June 24, 2004
  44. ↑ Louisiana Southern Railroad, accessed December 2008
  45. ↑ STB Finance Docket No. 34752, October 7, 2005
  46. ↑ Mission Mountain Railroad, accessed December 2008
  47. ↑ OpenDocument STB Finance Docket No. 34635, January 19, 2005
  48. ↑ Mississippi Southern Railroad, accessed December 2008
  49. ↑ STB Finance Docket No. 34683, April 21, 2005
  50. ↑ "Home". Port of Columbia. Retrieved 2019-10-24.
  51. ↑ Pennsylvania Southwestern Railroad, accessed December 2008
  52. ↑ STB Finance Docket No. 34329, April 24, 2003
  53. 1 2 3 "Short Line Railroads". www.up.com.
  54. ↑ "Unknown".
  55. ↑ "Timber Rock Railroad (TIBR)". Watco. Retrieved September 3, 2021.
  56. ↑ Vicksburg Southern Railroad, accessed December 2008
  57. ↑ STB Finance Docket No. 34766, January 13, 2006
  58. ↑ "Wisconsin & Southern Railroad being purchased by Kansas company". www.jsonline.com.
  59. ↑ Yellowstone Valley Railroad, accessed December 2008
  60. ↑ STB Finance Docket No. 34736, September 1, 2005
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