Wednesday, Dec. 24, 2008

Modesto rail line buys two new locomotives, adds track

Getting a train set for Christmas is a holiday treat for many families.

This season, the Modesto & Empire Traction Co. joined in the fun by unwrapping two new locomotives, and the short-line railroad is building a mile of new track for them to play on.

"They're the first new locomotives we've bought in about 60 years," said Joe Mackil, M&ET's president and chief executive officer.

The red-and- white locomotives cost $1.5 million each, and they're powerful enough to pull giant, 110-car trains through the Beard Industrial District.

"They're ultra-low-emission diesel locomotives," Mackil said. "They each have three engines instead of just one, so you only have to run as many engines as you need for the load you're carrying."

Some heavy loads need hauling through Beard's industrial park these days.

Five years ago, a couple of local guys -- Mike Barry of Oakdale and Paul Konzen of Escalon -- started a business at Beard to supply feed for cattle and dairy cows.

Their Central Valley Agricultural Grinding Inc. now sells enough grain to feed 88,000 animals a day.

"They just kept growing and growing. Now they're one of our biggest customers," said Mackil.

That's saying something, considering the M&ET hauls for E.&J. Gallo Winery, Frito-Lay, Del Monte and other food processing giants at Beard.

"We had no idea there was such a need for our services in the Central Valley," Konzen said. "Five years ago it was a big deal for us to have a

10- to 15-car train. Now we need to handle 110 cars ... on trains that can be 8,000 feet long."

Those so-called unit trains come loaded with grain from the Midwest and Canada.

The Beard Industrial District and M&ET weren't set up for such long trains.

"We've been hooking up six or seven of our older locomotives to move those trains," Mackil said. "And they were straining their guts out to do it."

The railroad's locomotives -- which only haul freight around the 2,000-acre Beard complex -- primarily have 600-horsepower engines.

The two new locomotives, however, have 2,000-horsepower engines, and together they've got more than enough strength to haul 110 cars.

Besides needing lots of power, however, those 1.5-mile-long trains require lots of room to maneuver. To avoid blocking streets, M&ET has been breaking up the trains and moving them in sections around Beard, but that's inefficient and time-consuming.

"There's a metamorphosis happening in the rail industry: Now bigger is better because bigger is more efficient," said Konzen, 44. Building a mile of track

So, to accommodate the big trains, one mile of railroad track looping in front of a giant, new 4.5-acre grain storage facility is being built at Beard for Central Valley Ag Grinding. Another building covering the tracks also is being constructed so the grain can be unloaded inside without the train ever stopping.

"It's a joint venture (with the railroad and the industrial park), and there's a financial contribution on our part," said Konzen, whose company will lease the buildings. "We've guaranteed (M&ET) a certain amount of business for the next seven years."

Mackil said the new track and buildings will cost $5 million to $10 million. He's convinced the investment is worth it: "We'll make our railroad more competitive so we can keep jobs here. Over time, when you invest in your business, your business grows."

The investment also will be good for Central Valley Ag Grinding.

"We're doing it to expand and better service our customers and our community," said Barry, 38.

He said his company already has benefited the dairy and cattle industries because it has "reduced a lot of truck miles hauling feed up and down the Central Valley."

Cost of feed lowered

Before the company opened, Konzen said, most of the region's livestock grain was trucked in from the Southern San Joaquin Valley. He said by bringing in large grain shipments by train to Beard's more centralized location, "it's lowered feed costs by $3 to $5 per ton" to our customers.

Konzen said livestock feed typically costs $190 per ton, and his company sells about 500,000 tons a year. The company employs 22 people.

With the new storage building, the more-efficient indoor unloading facility as well as the new track and locomotives to serve them, Konzen is optimistic about expanding his business and saving his customers even more money.

Everyone benefits when businesses like his expand, Konzen said: "Anything that's good for the ag community is good for the urban community."

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or 578-2196.