Palmetto Railways keeps on track
The name has changed, but South Carolina’s state-run railroad is still rolling with its long-standing mission: to help grow manufacturing and jobs in the state.
At a glance
Name: Palmetto Railways, a division of the S.C. Department of Commerce.
Top executive: Jeff McWhorter
Property: Owns 550 acres of land in the state.
Task: A full-service railway operation with services in short-haul and switching of cargo between manufacturing facilities.
The arm of the S.C. Department of Commerce recently changed its moniker to Palmetto Railways from S.C. Public Railways, a title that went back to the agency’s inception in 1969.
2013 estimate: 131,092
Top clients: 2013 carload
BP Chemical: 12,149
Nucor Steel: 53,171
The new identity sharpens the focus of the Charleston-based agency that’s in the midst of broadening its short-haul rail operations and helping reshape the waterfront in North Charleston, officials said.
State Commerce Secretary Bobby Hitt said the publicly owned rail operation plays “an essential role in the economic development of our state.” The former BMW executive has stressed that the efficient movement of cargo is a competitive business advantage for South Carolina.
“Rail and all facets of intermodal transportation are important to moving goods via our port system and around the region,” Hitt said.
Based in a small office off East Bay Street in Charleston, Palmetto Railways operates a rail system throughout the state. It also provides technical assistance and consulting in state and local matters, in addition to acting as a short-haul rail service for manufacturers like Nucor Steel and providing switching services for the region’s two big private-sector rail carriers: Norfolk Southern and CSX.
Jeff McWhorter, president and chief executive officer of Palmetto Railways, says the new name erases “misconceptions and ambiguity” of the agency.
“People thought of us as a regulatory agency or they thought of us as a passenger rail, but we are a full-service railroad operating company,” he said.
The organization owns 550 acres of property throughout the state, which includes a spur line to the Michelin Tire factory in Anderson County and the underlying real estate for a rail line to the BMW plant in Greer.
Palmetto Railways has 10 locomotives and a work force of 46 people that includes engineers, yardmasters, trainmasters and technicians.
The organization had 105,775 rail car movements last year and nearly $11.9 million in revenue. The agency is planning to beat that this year with projected growth of 24 percent in movements and 5.4 percent more revenue, he said.
“Not only has the economy improved, but we have also gone out and captured work that we have not done before,” McWhorter said.
The added business includes broadening services it provides with existing clients and new projects, like the August 2012 deal to handle the unloading of Santee Cooper’s coal trains.
Palmetto Railways is a self-funded state organization, which means its earnings go toward its day-to-day operations. Its list of clients include well-known corporate names like Siemens, MeadWestvaco Corp. and General Electric.
Palmetto Railways is largely known in the Lowcountry for its short-haul rail service for BP Chemical and Nucor Steel on the Cooper River in southern Berkeley County, in addition to its planned intermodal terminal at the former Navy base in North Charleston.
It also works closely with the State Ports Authority, another self-funded state transportation organization. The maritime agency accounts for roughly 22 percent of all Palmetto Railways’ operations, McWhorter said.
That includes switching operations at the Port of Charleston’s Columbus Street Terminal and hauling non-containerized cargo at Union Pier.
Jim Newsome, president and CEO of the SPA, said Palmetto Railways is a major piece in the productivity of the port.
“The Palmetto Railways is critical to the success of the S.C. Ports Authority as they provide switching and other support services for cargo moving via our port,” Newsome said.
He also noted that the use of rail at the port is expected to grow when the SPA opens its new 280-acre container terminal on the south end of the former Navy base.
Palmetto Railways’ role is to deve- lop a $130 million intermodal container transfer facility on nearby property. Its 90-acre site is expected to be served by Norfolk Southern and CSX to offer port customers a choice.
The two projects are largely tied to an anticipated increase in port business after larger container ships are able to start using the expanded Panama Canal.
The rail operator’s intermodal project faced some legal setbacks when some North Charleston residents opposed the idea of more freight trains coming near their homes.
A resolution with the city was reached late last year, requiring the state agency to give the city $8 million and more than 100 acres of the waterfront land at the north end of the former base around Riverfront Park.
Palmetto Railways also agreed to complete a major transportation study aimed at improving the flow of rail and truck traffic in the city.
Earlier this month, Palmetto Railways paid $10 million for the remaining 50 acres of what was known as the Noisette property on the former Navy base.
The additional space will allow the agency to create the intermodal terminal and work with the city to develop a master plan to improve the area, officials said.
McWhorter says he sees more growth for the agency.
“I think there is growth in development of facilities and development of the base we have acquired and growth of our operations,” he said.
Reach Tyrone Richardson at 937-5550 and follow him on Twitter @tyrichardsonPC.