REMODELING A RAILROAD
Through innovation and hard work, West Michigan Railroad Co. went from a dead line to a roaring success
Envision you’re a budding shortline entrepreneur, and you’ve just acquired your own line to operate. Within two weeks, however, your only customer gives you the news it will no longer be shipping by rail. What do you do? The West Michigan Railroad Co. was forced to figure this out. Its response is a case study in making an unused line relevant again — a story of marketing, networking, hard work, and some good luck.
In southwest Michigan, a former Pere Marquette Railway branch links the small town of Hartford with even smaller Lawrence, a line that started life in 1877 as part of the Toledo & South Haven Railroad. Over time it became part of Pere Marquette, then Chesapeake & Ohio, Chessie System, and finally, CSX Transportation.
In 1986, the branch extended east 15 miles from Hartford to Paw Paw and was sold in its entirety to the Southwestern Michigan Railroad, doing business as the Kalamazoo, Lake Shore & Chicago, which operated a dinner train and hauled some freight. After KLS&C went into bankruptcy in 1995, the shortline holding company Pioneer Railcorp acquired the line, naming it West Michigan Railroad Co. But even Pioneer, which specialized in operating lowdensity lines, decided to call it quits in 2013.
Watching all this unfold over the years was Linus Starring and several associates. Starring is a native of the area, and had tried to hire on with CSX in the late 1970s. In 1981, he and his wife purchased Saugatuck Dune Rides and have operated the popular attraction since. Starring eventually would meet some of the KLS&C staff through a local tourism group and began volunteering with that railroad.
He worked as both conductor and engineer, obtaining the necessary certifications for the jobs. When Pioneer acquired the line, he stayed on and also worked other nearby Pioneer short lines. A later change in management, however, eliminated his job. In the meantime, he had started Great Lakes Locomotive LLC, or GLLX, and dabbled in used motive power.
After Marquette Rail started operating ex-C&O lines north of Grand Rapids in 2005, Starring began helping out as an engineer and got to know the general manager, Rick Jany, who would become an investor in West Michigan. Also at Marquette Rail, Starring met Mike Hnatiuk, who would become West Michigan’s marketing director.
FORMING A NEW RAILROAD
While working at Marquette Rail, Starring kept an eye on the Hartford-Paw Paw line. When Pioneer filed to abandon the route from Lawrence to Paw Paw in 2013, he saw his chance.
Under Surface Transportation Board procedures, an entity can offer to purchase a line being abandoned under an Offer of Financial Assistance provision. Starring and some associates formed Hamilton Hartford Group LLC to acquire the line and filed for an OFA, using GLLX as the acquirer, requiring Pioneer to discuss with GLLX a potential sale.
What came next can only be described as a roller-coaster ride, with several onand-off negotiations and frequently chang
ing terms. During negotiations, the rail from Lawrence to Paw Paw was sold to a scrapper, much to Hamilton Hartford Group’s dismay. A competing interest — the state of Michigan — also was hoping to acquire the corridor for a trail.
Finally, everything came together. On Nov. 4, 2015, the railroad was theirs: 41/4 miles of deplorable track from the CSX Transportation connection at Hartford to near Lawrence. One switch and one transload customer doing 70-100 cars a year.
The prior day, when they were meeting with Pioneer, they were given the number of a boxcar coming from California, their first carload.
As it turned out, it was the last. West Michigan’s only customer, Hanson Logistics, was transloading tomato paste and had lost the business. For about six months after that there would be no traffic. Although there were no full-time employees nor an office to support — and Starring owned the locomotive personally — expenses such as insurance had to be paid. Business needed to be found.
With Mike Hnatiuk, West Michigan acquired an experienced sales and marketing man. He grew up in western Michigan and began his career working for Marquette Rail, followed by a stint at Watco’s Kalamazoo-based Grand Elk Railroad. Later, at Canadian National, Hnatiuk was a regional account manager, covering lower Michigan, before going over to Saginaw-based Lake State Railway.
Having known Starring at Marquette Rail, Hnatiuk relished the chance to grow railroad business in his backyard. He figured the quickest way to do it would be to land some transload business.
He also was aware of a plastic receiver, about 10 miles away, using another party’s track for transload. When the track owner went out of business, the customer agreed to relocate to the West Michigan. The first 17 cars per year had been secured.
Next, West Michigan landed a shredded-rubber-tire shipper, located on Norfolk Southern Railway. The customer couldn’t get consistent service at their twocar track, so West Michigan promised the customer as much service as needed, then backed it up. No longer having access to NS cars for loading, West Michigan negotiated a private car lease for him. Thus, another 170 cars annually were secured.
Expenses remained tight, but at least the insurance could be covered instead of coming out of pocket.
Next to come to the railroad was a methanol customer whom Hnatiuk knew through a mutual connection. With scarce locations for transloading hazardous material in the area, the customer contacted him. Although initially hesitant to get involved in the regulations surrounding hazmat, Hnatiuk eventually found a suitable location along the track and secured an easement with an adjoining property owner to allow truck access.
BUILDING A CUSTOMER BASE
Hnatiuk continued to find ways to expand the railroad’s customer base.
Soon came another transloading opportunity in which corn oil, various greases, and lard are custom blended in a tank car. The end product goes into biodiesel or animal feed. Also transloaded is used cooking
oil from restaurants, another ingredient for making biodiesel.
What came next was pure chance. A young railfan who lived in the area had made a post on social media, to which Hnatiuk replied. After communicating back and forth for a while, Hnatiuk invited him out to see the railroad. The young fan asked if he could bring his father along, and Hnatiuk said “sure.” At the same time, Hnatiuk was in conversation with a local farmer whose business he had been chasing. On the appointed day, Hnatiuk and Starring arrived to meet the young man and his father and each immediately recognized the other.
“What are you doing here?” asked Jason Meachum, the boy’s father and also the farmer. “And what are you doing here?” Hnatiuk replied.
Needless to say, a business partnership bloomed. Meachum began handling the trucking involved in the transloading and had the land for a much-needed permanent transload site. As business had grown on the railroad, efficient switching had become more difficult, with only the one switch and side track at Hanson Logistics. A new transload area and track was constructed on Meachum’s property and the footprint has expanded three times since. West Michigan and Meachum formalized their partnership as Paw Paw River Transload LLC.
Chance then aided West Michigan Railroad Co. a second time. A hydraulic “frac” sand transloader was liquidating and had portable conveyors for sale. Although the railroad had no use for them, on a whim it made a lowball offer and took them home! Within a month, West Michigan got a call from a company needing immediate help getting cars of inbound animal feed unloaded. The conveyors allowed the railroad to capitalize and soon cars were arriving. The railroad acquired other pieces of machinery such as an excavator on stilts to unload gondolas of rock, and a tamper.
West Michigan was able to identify frozen cherries being trucked to Chicago for transloading there into refrigerator cars to go west. These are now loaded on railcars at Hanson Logistics. The customer is happy because his trucks can make multiple local
shuttle trips in a day and are much more efficient, instead of one round trip in and out of congested Chicago. West Michigan handles the car ordering.
Next came frozen pork parts outbound to the West Coast, again through Hanson, followed by inbound apples used for applesauce and cider production from the Pacific Northwest. As all these moves are in mechanical refrigerator cars, the inbound apple cars can be loaded back to Union Pacific with the frozen pork parts. Hnatiuk thinks this is just the start, having identified additional apple movements coming into the area by truck.
Another business West Michigan captured is organic soymeal. This required Paw Paw River Transload to go through a certification process to handle it, but it has given them a niche site. Cereal waste is trucked in and loaded in railcars to hog farms in the East. Decorative stone is brought in by rail for unloading. Inbound canola meal has become a significant move, being used in animal feed as a protein source.
All this business put stress on West Michigan’s infrastructure. When the railroad first started, cars had to be spotted as close to the CSX interchange as possible. The railroad wanted to minimize the movement of cars on its track, fearing a derailment. Accordingly, all the money West Michigan can spare is put back into the right-of-way. From an initial 1,500 ties, the railroad replaces more and more each year. The railroad has purchased 9 track-miles of rail, which will eventually replace the old 75-, 85-, and 90-pound rail.
In 2020, ballasting was done for the first time, as was some bridge work (it has three). West Michigan can handle 286,000-pound shipments, so with the light rail, good tie condition is a must. The railroad’s goal is FRA Class 2 track (25 mph). West Michigan aspires to be a high-end service provider and does not want to have to deal with any service interruptions, so zero derailments is the goal.
DECEPTIVELY SIMPLE OPERATIONS
West Michigan runs according to customer needs, which equates to four to six evenings per week.
The crew goes to work around dinner time to move cars released during the day and to connect with the CSX interchange later that evening.
Operations at West Michigan Railroad Co. appear simple at first glance but are actually quite complex. With the main line used as an unloading track, cars have to be moved out of the way, then put back. Locomotives spend much time sandwiched between cars. There are no double-ended tracks, so the line’s hilly profile is used to the railroad’s advantage as cars can be rolled past the power at both sidings.
A lot of time is spent behind Paw Paw River Produce east of Hartford, switching the transload business. Then it’s down to the CSX interchange, with a stop if needed at Hansen Logistics, which in 2021 was acquired by Lineage Logistics.
West Michigan’s roster of three locomotives might look like overkill, but with the hilly terrain — the grade at the transload is
“OUR GUYS ARE AWESOME. WE WOULD NOT BE WHERE WE ARE TODAY WITHOUT THEM.” — MIKE HNATIUK, WEST MICHIGAN RAILROAD CO. MARKETING DIRECTOR
2% — and constant starting and stopping, the short line needs reliable power. The railroad’s first locomotive was SW1200 No. 1512, a former Grand Trunk Western unit. Two MP15ACs came later, acquired from Union Pacific.
The railroad tries to give customers whatever it takes to land and keep their business. West Michigan will order empty cars, trace incoming cars, and anticipate problems in the supply chain. Even though West Michigan is a CSX junction settlement carrier, Hnatiuk prefers to handle the formulation of the freight rate to ensure a prospective customer gets a rate that works for their business, in a timely manner. As part of the railroad’s service, crews will sit and wait for the CSX delivery when hot customer cars are due.
“Our guys are awesome,” Hnatiuk says. “We would not be where we are today without them.” The railroad has no fulltime crews, instead drawing from a group of former Class I and shortline engineers and conductors. Each might only work one or two days a week but don’t mind putting in a long day if needed. Starring says landing one or two more decent-size customers might justify a full-time crew.
Hnatiuk’s characterization “This is the stuff we do every day,” paid off in 2018 when CSX honored West Michigan at its annual shortline conference, demonstrating the largest year-over-year percentage carload increase among CSX’s connecting short lines.
West Michigan realizes the transload business can be transient and hopes to relay track eastward to directly serve industry. The railroad stockpiled 9 miles of rail for it.
For the immediate future, plans have been drawn up to lay more tracks at the transload site. This will not only provide additional capacity to handle more business, but also will clear the main line.
Traffic has grown every year, and in 2021, it surpassed the 1,300-car mark. This impressive growth aside, Starring and Hnatiuk believe 2023 will be a transformational year, with multiple projects in the works.
It’s quite a change from six years ago when the railroad saw no traffic for months on end. These results testify to the impact a customer-focused, locally based short line can have on businesses in a region. All it took was hard work, a little chance, and some lucky encounters along the way.