INRD's Major Moves

Entrepreneurial Railroading SM Vol. 28 No. 2 Summer 2014 "New" INRD INRD’s Major Moves: Key White River Ballast Cars Add Bridge Replacement Gets Underway Safety, Speed to The year that Indiana Rail Trackwork Road’s bridge over the White River near Elnora, Ind., was Indiana Rail Road’s Engi- constructed, the following hap- neering department has scored a pened: The U.S.S. Maine mys- “win-win-win” with a new and teriously exploded in Havana heavily-rebuilt fleet of ballast cars (Cuba) Harbor, a catalyst for the in use across the system this year. Spanish-American War; jockey Not only do the bright-yellow cars Willie Simms won the 24th(!) distribute rock-ballast along the Kentucky Derby aboard Plaudit; right-of-way faster than ever be- and on December 18, in France, fore, but their air-actuated control the world’s first automobile land system is much safer and easier for speed record – 39 mph – was re- employees to use. corded. (Some background: Well That was 1898, and back at over a century ago, railroads dis- Elnora, crews built a 450-foot covered that rock ballast is the best Pratt-style pin-connected steel The INRD is replacing the 1898 White River Bridge with a new structure, way to keep the wooden crossties truss bridge to carry the Southern allowing for greater train capacity and speed. (or in some cases today, more ex- Indiana Railway across the White pensive concrete ties) in place. The River, eventually reaching Terre Haute. Through more to 263,000 pounds. Since the rail industry standard steel rails are firmly connected to than a century and thousands of train movements car- maximum weight is 286,000 pounds, the bridge puts the crossties with steel spikes or rying millions of tons of Indiana commerce, this rail southern Indiana businesses at a competitive disad- other fasteners; rock ballast poured line changed hands several times until 2006, when vantage. among and beside the ties keeps Canadian Pacific Railway sold the line to Indiana Rail In July, a new 450-foot steel plate girder bridge them in place. Today it's still the Road. will start to take shape, with service over the line basis for how millions of tons of Known today as INRD’s Chicago Subdivision, the continuing throughout construction aside from several freight move safely via rail.) line runs from NSA (Naval Support Activity) Crane short work curfews. INRD is keeping its 22-car to Terre Haute, where INRD provides its customers The existing bridge piers in the river will remain, ballast fleet busy this year, as the with the all-important connection to Chicago and the albeit with each receiving a major rehabilitation and railroad is investing more than $19 North American rail network. a reinforced concrete casing before new bridge sec- million on total capital expendi- Indiana Southern, an Indianapolis-Evansville tions are put in place. The wood pile approaches will tures in 2014 to improve its right shortline railroad, also utilizes INRD trackage rights get replaced with modern precast concrete and steel of way. The most notable projects over the White River bridge to link the north and south decks. lie along the north end of the rail- ends of its system. When work is completed in October 2015, the road’s Indianapolis Subdivision, The current bridge is safe and inspected regu- Indiana Rail Road, Indiana Southern and southwest between Bloomington and Indy, larly, but replacing steel forged in the Gilded Age Indiana customers will have a new span capable of where 11,000 linear feet of new (along with the wood-pile approach bridges) became carrying the heaviest loads at the posted track speed rail and 4,200 wooden crossties are a priority in recent years. Due to its age, INRD engi- of 40 mph. being installed. neers placed a 10 mph speed restriction on the White Replacing the White River bridge is no small When the project is completed River bridge and limited per-car maximum weight capital project; at $14 million, the bridge alone See "Ballast," page 2 See "Bridge," page 3 Inside: p. 2 From the President • p. 3 AAR • p. 4 Photo Briefs From the President: Capital Ideas: Reinvestment Reaches New Milestone in 2014 Ever buy a locomotive? How about 2,000 heavy-haul operations. Warren Buffett’s invest- tons of precision-rolled steel? Or an entire As a whole, American railroads devote six ment firm, Bershire Hathaway Inc., purchased bridge? These kinds of capital investments are times the average amount of other industries to BNSF Railway outright, in a strategy that he routine for the railroad industry. It takes this capital investment—roughly 18 percent of total himself described as an “all-in bet on the future level of commitment to keep a railroad running, revenue, or 40 cents out of every dollar of net of America.” Buffett’s move stunned Wall Street and the numbers aren’t for the faint of heart. earnings. Things weren’t always this robust, and created a major milestone in the history of That locomotive fresh off of the factory floor, however. American railroading. for example, could set you back as much as This year, Indiana Rail Road will mark a $2 million. ...in less than 30 years, we have milestone in our own investment history, when Everything about railroading is big, includ- reinvested from earnings nearly 35 our cumulative capital expenditure surpasses the ing the investments necessary to make it work. times the initial purchase price of our $180 million mark. To put that in perspective, Ours is one of a number of industries notable railroad. in less than 30 years, we have reinvested from for its intensive capital demands. Mining, power earnings nearly 35 times the initial purchase generation, refining, telecommunication, and In the two decades leading up to 1976, the price of our railroad. other transports are classic examples of indus- year the railroad industry bottomed out in a This sustained commitment to reinvestment tries that require major investments. (Think deep financial crisis, railroads weren’t earning has paid valuable dividends to our customers, assets such as earth-orbiting satellites, electric enough revenue to meet their intensive capi- who benefit from transportation service that is generating plants, oceangoing vessels and the like.) tal demands. As one analyst with the Illinois among the industry’s safest, most attentive and The measure of these capital requirements, Central Railroad once observed during the late reliable. referred to by economists as capital intensity, 1960s, his company could only afford to replace And we’re going to continue to reinvest is often expressed as a ratio of investment per one percent of its rail every year, meaning that in the creation of the world’s finest regional employee, the idea being that capital invest- every new piece of rail installed needed to last railroad. It has been my life’s work, and yet it ments provide equipment and tools that allow 100 years! feels like we’re just getting started. employees to be more productive. This year, After the sweeping regulatory reform en- the U.S. railroad industry is projected to make acted nearly 35 years ago, our industry entered $15 billion in capital expenditures—more than a sustained renaissance and has emerged from $80,000 per employee! crisis. Today U.S. railroads operate and main- In recent years, Indiana Rail Road has even tain the most productive freight network in the Thomas G. Hoback exceeded this ratio, being in the midst of a five- world, thanks to the regained ability to make President and Chief Executive Officer year period of elevated capital investment to necessary capital investment. This transforma- upgrade and strengthen our infrastructure for tion arguably reached its fruition when, in 2009, Ballast, Continued in early August, INRD’s 155-mile Indianapolis with the old cars, you had to carry a 10-pound Subdivision – which runs from Indianapolis to bar with you, and you were either pushing the CN Rail connection at Newton, Ill. – will down on the bar or pulling on it to open the be in better condition than at any point in its (ballast) car doors,” said Mark Hiatt, of INRD 108-year history. Heavier rail, better-quality Engineering. “The ballast would get stuck crossties and a better limestone ballast base and we’d have to beat and bang on the cars (delivered from Rogers Group’s Bloomington, to get it moving. Your arms felt like jello at Ind., quarry) will allow for a faster and smoother the end of the day, and you can imagine what ride for commerce. it did to your back. Now, it’s just the push of The air-actuated dump system is light years a button. You’re talking three or four hours ahead of the way INRD personnel had to dump (before), what you can do in one hour now.” INRD Trackman Brian “Buzz” Farris (right) cars in the past, either using a steel bar to pry Beasley’s Railcar Repair Corp., privately- keeps a hand on the air-actuated ballast unload- open the cars or using steel-wire pulley systems owned and located next to INRD’s Indianapolis ing controls and Train Operator Mike Skora to manually crank open each car, while coordi- Sub near Bloomfield, Ind., added the air system keeps an eye on the train’s progress, unloading nating with the ballast train’s engineer to start and new dump doors to the old cars, and painted fresh limestone ballast at the south end of Senate the train rolling at the right time, then stop the the entire fleet in the striking yellow scheme.

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