Watco Companies (WCI) offers a wide-range of railcar services. Subsidiary Watco Transportation Services (WTS) runs 20-plus short-line railroads throughout the US on about 3,665 miles of track. WCI offers industrial contract switching services, operating more than 20 railcar switching facilities located on manufacturers' and railway shippers' sites. It also leases and repairs railcars and locomotives; provides temperature-controlled warehousing/storage and distribution services; and offers transload/intermodal services (using different forms of carriers for a single journey). Its real estate unit offers land development and property leases. Founded in 1983 by the late Dick Webb, WCI is led by Webb's son, Rick.
WCI has been on the track of expansion. In 2010 it acquired the remaining interest in Greens Port Industrial Park (GPIP) in the Houston ship channel in Texas. GPIP is served by the Union Pacific, Kansas City Southern, and BNSF railroads and encompasses 640 acres in the Houston ship channel; the location is strategic to business in the Gulf Coast. GPIP offers rail, transload, switching, and mechanical services and has four rail yards that can store as many as 1,200 railcars. Considered to be the second-busiest port in the US, GPIP's future business is expected to increase more than 15% once the Panama Canal's expansion is completed in 2014.
Late in 2010 WCI expanded Down Under when it landed a 10-year grain rail contract with farmer-owned co-operative CBH Group (made up of more than 4,800 grower-shareholders) in Western Australia. In return for rail logistics planning (scheduling, tracing, maintenance, and inventory control), CBH will invest $175 million in rolling stock that will be maintained by Watco's mechanical unit. Operations are expected to commence in 2012.
Simultaneous to GPIP and CBH, the company entered into an agreement with Kinder Morgan Energy Partners whereby the natural gas distributor will invest as much as $150 million in 2011 in WCI. In return Kinder Morgan will gain an equity position in WCI.
Expansion was the word even before 2010. In a lease-purchase arrangement, WCI purchased about 36 miles of railroad track near Boise, Idaho, in 2009 and named the new line the Boise Valley Railroad. That same year, the company spent almost $9 million expanding its operations to introduce a new shortline rail company, Grand Elk Railroad, to move freight for some more than 50 West Michigan companies. Through a leasing agreement with Norfolk Southern, Watco is replacing the transportation giant on the 123-mile track between Grand Rapids, Michigan and Elkhart, Indiana. Customers on board include Pfizer and a USG Corp. paper mill. The line is expecting to grow with the uptick in transportation demand for commercial wind turbine components, as well as agricultural commodities, corn and soybeans, and tank cars carrying ethanol. – less