Robert Melloway holds a one-man office in Jefferson City for Trees Unlimited, a building material company based in Joplin. The booming housing and lumber market sweeping the nation has kept him busy, and a new warehouse built in northeast Columbia along the city-owned COLT railroad has broadened his business horizon.
“Local access is a major advantage,” Melloway said. “Now I’ve gotten my materials local. I have more customers and provide them more convenience.”
Before the warehouse was there, Melloway had to unload lumber at terminals in Kansas City and St. Louis and use trucks to deliver them. Now, the lumber can come right into Columbia, stay in the warehouse and be sent directly to customers across Missouri.
“I’m a lot closer to the lumber,” Melloway said. “It definitely helped with my business.”
The warehouse is a major project supported by the city of Columbia since 2003 to boost traffic on COLT, a city enterprise operated by the Water and Light Department. The short rail line connecting Columbia to Centralia has never been profitable in two decades. But construction of the warehouse last year brought a significant increase in traffic. The terminal’s budget might finally be in the black by the end of September.
For the warehouse, the city spent $1.3 million to purchase land at Brown Station Road. With the money, it also paid for utilities and rail-line expansion. It then leased the land to a private company, Columbia Transload Inc., to build the warehouse. The warehouse opened in March 2004, and traffic on the railroad jumped 50 percent that year. Two months from the end of fiscal 2005, the city expects income of $250,000.
The Water and Light Department has also subsidized COLT by $50,000 every year since the city purchased the rail line in 1987. The money will stop once the terminal makes it into the black.
“It might be within another year or two,” said Jim Windsor, manager of rates and fiscal planning for the Water and Light Department. “Now, everything looks good.”
As a freight line, COLT has 18 customer companies, including seven companies attracted by the warehouse.
“Storage component is the key,” said Christian Johanningmeier, the supervising engineer for COLT. “Before we had the warehouse, to reach customers we had to load and truck at the same time. Now, we can store their goods and deliver to them whenever they want and however they want it.”
In addition to volume, the type of commodities carried has changed. The capability to store inventory brought in several steel and lumber companies, which made steel exceed coal as the largest source of traffic, followed by chemicals, petroleum, lumber and wallboard.
Local trucking companies, however, might not share the joy.
One side effect of the increase in rail business is reduced truck traffic. The Missouri Department of Transportation estimates that there will likely be 3,000 to 4,000 fewer heavy trucks on Interstate 70 per year because of the warehouse. A single train car can carry as much freight as three or four heavy trucks.
But Chad Hager, owner of Columbia Transload Inc., said trucking and rail cater to different goods. Large, bulky materials might be more suitable for rail shipment, while trucks are better for goods that damage easily or are time sensitive. Still, the competition is real.
“We drop into their (trucking companies’) pockets,” Hager said. “And we are working to drop deeper.”