Kansas firm takes over local rail operations

A company that specializes in short-line rail service will take over operations today along 40 miles of railroad in Northwest Montana, including the section between Columbia Falls and Kalispell.

Watco Companies, doing business as Mission Mountain Railroad, will lease the tracks from Burlington Northern Santa Fe. It currently operates nine other short-line railroads in 23 states, including Washington and Idaho.

The company, which is headquartered in Kansas, also acquired Burlington Northern's rail line from Eureka to Stryker for an undisclosed amount. Together, the two sections of Montana tracks have about a dozen customers and move 9,000 carloads of material per year, including grain and lumber products.

Ed McKechnie, executive vice president and chief commercial operator for the firm, said customers here can expect a seamless transition as well as a strong focus on service.

"We're going to try and feed our families from these sections of lines," he said. "They're going to be extremely important properties for us. Our goal is to help our customers expand their market reach by providing competitive transportation services."

McKechnie likened the transition to a similar switch earlier this year when Delta Air Lines transferred all of its commercial air service at Glacier Park International Airport and other Montana communities to SkyWest Airlines.

"We're like SkyWest," he said. "The Class One railroads, like Burlington Northern, focus on moving big trains long distances. We operate the feeder network. We're good at collecting a small number of rail cars from a number of customers and providing them to the Class One operators."

Burlington Northern has invested about $40 million in track improvements throughout Montana this year and has added more than 200 employees in the state, including 40 positions in Flathead County. It will continue to operate the main rail line through the valley, collecting local cars at Stryker and Columbia Falls.

Watco Companies had six employees when it started in 1983, McKechnie said. It now has just over 1,000 employees - including about seven maintenance and operating personnel who will work for Mission Mountain Railroad.

Norm Brown, who previously worked for Watco's Palouse River and Coulee City Railroad in Washington, has been named general manager and will oversee the local operations from a new office in Columbia Falls.

"We're going to have a much stronger marketing presence in that area than our customers have seen before," McKechnie said. "We'll focus on growing their business and on using the right size equipment for the job. We think that 9,000 carloads can grow by about 10 percent per year."

Plum Creek Timber Co., which operates several lumber, plywood and fiberboard manufacturing plants in the valley, will be Mission Mountain's largest single customer here. Hank Ricklefs, vice president of manufactured products, said he expects the transition to be beneficial.

For example, if Plum Creek needs a short-term change in shipping volumes to take advantage of a market opportunity, Ricklefs said, it should be easier for Mission Mountain to handle that because it's a smaller firm.

"We had an excellent relationship with Burlington Northern and especially its local crews," Ricklefs said. "We'll be sorry to lose that connection. But based on everything we've seen so far [from Watco], we're pretty positive about the transition."

Reporter Bill Spence may be reached at 758-4459 or by e-mail at bspence@dailyinterlake.com