The Country Today Features Northern Rail & Transload

Rural Wisconsin’s biggest transload site being built near New Auburn
By Heidi Clausen, Regional Editor | | Posted: Tuesday, September 2,
2014 8:58 am

Construction work is underway at the site of what will be the largest transload site in rural Wisconsin.

Northern Rail and Transload aims to fill a perceived need for better rail-transport services throughout northwestern and western Wisconsin, benefiting everyone from farmers to those who heat their homes with liquid propane.

A groundbreaking for the new rail hub was Aug. 13 at a 220-acre property just north of New Auburn.

Company officials expect to begin providing services this November, just in time for the harvest season and heating demands, with full capacity reached by May 2015.

“The response has been extremely positive,” said Brian Gilbertson, chief operating officer for Northern Rail and Transload, based in Wayzata, Minn.

Northern Rail and Transload has partnered with Union Pacific and Progressive Railroads to design a rail hub featuring a triple-loop design with capacity for three 110-railcar unit trains. Ladder tracks will accommodate storage for up to 500 more railcars.

The facility is being billed as “Wisconsin’s only unit train and manifest cargo multi-modal facility geared to provide multiple, real-time supply-chains solutions,” ranging from providing customers with surge storage options to assembling other value-added packaging services on-site.

Land is being leveled for the estimated $13 million facility, which will be open 24 hours a day, 365 days a year.

“There’s really no clearing to do, as the site has been cleared in the past for corn and soybeans,” Gilbertson said. “There will be a nice perimeter of trees there.”

He said the company has been in discussion since last winter with many area businesses, letting them know what will be available to them, and there’s been a lot of interest.

“A lot of companies have been waiting to see, but once we started breaking ground, it became more real to them,” he said. “Conversations will heat up quite a bit more now.”

Set up like a large industrial park, the site will feature five set-aside areas for different commodities just adjacent to the rail, with good access to state and county highways for moving goods in and out, Gilbertson said.

Northern Rail and Transload will serve about an 11-county area, stretching from the Eau Claire area north to communities such as Cumberland, Ladysmith, St. Croix Falls, Hayward and Park Falls, he said.

This facility should be of interest to any business doing a lot of trucking, Gilbertson said.

“Trucking is significantly more expensive per ton than rail. Anybody moving commodities to Minneapolis and Milwaukee can benefit from this,” he said.

As supply chains relying on highway carriers frequently become taxed, rail has become a more reliable, cost-effective alternative.
On-site locomotives will assemble all railcars to synchronize with Progressive Rail’s Wisconsin Northern Railroad scheduled pick-ups/set-outs. The operation also will align with the Union Pacific rail network.

A certified railcar repair firm will be on hand to eliminate repositioning of cars for repair.

LP among commodities
The company said the site will increase the capacity for transporting a variety of commodities and satisfy the need for on/off loading and storage of commodities, including bulk propane, bulk salt, frac sand, agricultural products, forest products and small-business products.

Liquid propane will be its first focus, and the facility will have an initial capacity for 15 million gallons of LP a year, replacing about 35 percent of the volume in western Wisconsin.

Gilbertson said the site will take in wholesale propane from suppliers.

“People who deliver to farms and homes will come here to load up their trucks,” he said. “It definitely will stabilize the supply and should go a long way to stabilizing the price.”

In the past, propane has been trucked from ports on the pipeline. On the heels of last winter’s LP shortage and drastic cost run-up, Northern Rail and Transload aims to help lower the cost of transport through cost-effective unit trains and the facility’s proximity to users.

The timing of the new transload facility is critical given the complete reversal of the Kinder Morgan Cochin pipeline in April, according to the company.

For 35 years, the Upper Midwest received as much as 142 million gallons of propane per year via this pipeline. The reversal involves using the pipeline to carry light condensate to the heavy oil fields of Saskatchewan in order to blend it with heavy crude, dramatically affecting LP supplies and prices in Wisconsin and Minnesota.

A partial reversal in 2013-14 created shortages and prices hikes, and the complete reversal is expected to take a severe toll on LP supplies this fall and winter.

Farmers could benefit
Farmers also stand to benefit from the new transload facility.

“We want a couple customers to do some grain loading here and want to bring in fertilizer products in the fall and spring,” Gilbertson said. “It’s really a matter of us doing the marketing and finding out who wants to use it. We hope it has a huge impact.”
Northern Wisconsin’s forest products industry has been underserved by the rail, he said, and several firms already have expressed interest in using the site.

Other anticipated users include the frac sand industry, and those shipping salt for deicing and water conditioning.

Many townships and counties ran out of road salt last winter. Northern Rail and Transload will be able to stockpile it in warehouses and load it into trucks when needed, Gilbertson said.

The new business also will stimulate economic and employment growth, creating as many as 100 new jobs.