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Indiana Rail Road 'Signals' Impact on Economy

Other than hearing the occasional distant horn or driving over a crossing, it's likely Indiana's rail industry is rarely on the mind of the average Hoosier, despite their widespread economic contributions to the state. But while Indiana Rail Road Company leaders say they aim to be a "behind the scenes" operation, they're taking one opportunity to toot their own horn. It recently celebrated the movement of its two-millionth carload of revenue freight—a testament to the importance of Indiana's rail industry and the company's role in it.

"People might not be aware how their lives are impacted by railroads every day," says Chris Rund, Indiana Rail Road Company's vice president for corporate services. "Every time you turn on a light or a computer, eat fresh fruits or veggies, drink a glass of orange juice or milk, get into your car and drive—railroads have had a direct role in keeping all of those essential conveniences available for all of us."

Rund says reliable, quality rail transportation is critically tied to the state's ability to compete economically—and Indiana has distinct advantages. Advanced manufacturing and logistics initiative Conexus Indiana says the state ranks 4th nationally in total freight railroads and 9th for railroad mileage.

Indiana Rail Road, based in Indianapolis, is a regional rail carrier that moves mostly industrial and consumer products for companies in the central and southwestern part of the state, and in recent years, has experienced what company leaders call a "meteoric" rise in business. It took the carrier nearly 19 years to haul its first million cars of revenue freight, but recently hit the two million mark—just seven years later. Listen

Operating 500 miles of rail in Indiana and Illinois, Rund says the resurgence of the coal industry in southwest Indiana is driving the increase; Peabody Energy selected Indiana Rail Road as the exclusive carrier for its Bear Run Mine in Sullivan County, the largest surface mine in the eastern U.S.

Rund also credits the changing landscape of the trucking industry for boosting business; rising fuel costs, pollution concerns and increased efficiency are causing companies to choose rail over trucks. Rund says each coal train the company delivers to Indianapolis Power & Light Company's (IPL) Harding Street Station does the work of 300 semi-trucks—a savings of 1,800 trucks per week on Hoosier roads.

"We are expecting an overall increase in our business of at least 50 percent over the next five years, and that would put us on a trajectory to cross the three-million carload mark around 2015 or 2016," says Rund. "The rail industry at large has a very bullish outlook for growth in freight traffic, and a lot of that is driven by projected consumer demands and population growth." Listen

Industry experts support the company's description of rail's resurgent nature. Rose-Hulman Institute of Technology Civil Engineering Professor Jim McKinney says there has been a marked increase in rail traffic since the 1980s. Led by McKinney, the school was recently selected to be part of the National University Rail (NURail) Center, a federally funded consortium of universities focused on rail education and research.

"We're excited here at Rose to be part of the NURail Center," says McKinney. "It's an opportunity to take what was an old technology and turn it into something that's very important to the state of Indiana and the U.S. economy in general." Listen

McKinney says a primary focus of the project at Rose is preparing the next generation of railroad engineers.

"A lot of engineering schools abandoned teaching railroad engineering either before or right after WWII and shifted attention to highway design and construction," says McKinney. "It's an aging profession; a lot of people in the rail industry and the consulting firms are reaching retirement age; there's going to be a real need for new engineering talent." Listen

McKinney says some forecasts indicate Indiana's rail industry will be at capacity by 2030, highlighting a need to increase capacity and innovation. Rund echoes the concern, saying aging rail infrastructure—particularly bridges—are at or beyond their useful life, especially as rail cars are being built larger to carry heavier loads.

"Our company has committed $65 million in capital investments through 2015 to renew our infrastructure and improve service," says Rund, "but there are scores of smaller railroads throughout the country not in the position to make those large investments."

Acknowledging the challenges that lie ahead, Rund says Indiana Rail Road is focused on its next milestone of three million carloads. Fueled by continued demand for energy products and Indiana coal, the company will continue full steam along Indiana's rail lines—remaining relatively unnoticed, but playing an increasingly important role in the state's economy.

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