After 11 years, Tacoma Rail’s red-and-white striped engines will soon stop chugging through the Olympia area because of vandalism and a lack of business.
The short-line railroad transfers freight cars to the Union Pacific and BNSF railroads for shipping across the country. The Port of Olympia and the Mottman Industrial Park are two of the railroad’s largest customers in Thurston County.
Tacoma Rail will not renew its lease on two lines. The main one is the Belmore Line, which runs from East Olympia into the Port, and from Olympia to the end of the line at 66th Avenue Southwest in Tumwater. The shorter Quadlock Line runs about 3 miles between St. Clair and International Paper on Union Mills Road in the east Lacey area.
Tacoma Rail’s lease will expire March 15. BNSF owns the lines and is searching for a new railroad to immediately take over.
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“We don’t expect there to be an impact in service to our customers,” said BNSF spokesman Gus Melonas, who did not identify the replacement. “There will be another short-line operator.”
The decision to end Tacoma Rail’s service was hastened by vandalism on the Belmore Line in August 2014. Someone put a concrete block on the tracks near the Bonneville power station at 54th Avenue and Trosper Road. The block punctured a locomotive’s fuel tank and spilled 1,700 gallons of diesel.
The cost of cleanup reached nearly $430,000 and ate up the money for maintaining the line, said Dale King, Tacoma Rail COO and superintendent. The railroad, which is owned by the city of Tacoma as part of Tacoma Public Utilities, operates at cost. Revenue from the lines was estimated at $400,000 compared to $660,000 in expenses in 2015, according to the railroad.
“It became economically unviable for us to operate down there,” King said. “We couldn’t continue running a losing operation.”
Tacoma Rail began leasing the line in 2004, and its financial struggles began shortly after. The railroad needed to haul at least 2,600 cars a year to break even. That happened only in 2005, 2013 and 2014, according to the railroad.
King said the railroad was able to “limp along and build traffic” with major shippers like Pepsi Northwest Beverages before the oil industry started to show a lot of promise in 2012.
The Port of Olympia was receiving several shipments of ceramic proppants, which are used in the oil fracking industry. These shipments peaked in 2014 when Tacoma Rail hauled more than 3,000 cars. At the time, crude oil prices exceeded $100 a barrel.
Oil prices now hover around $34 a barrel and coincide with a decline in fracking production, especially in “oil boom” cities in North Dakota and West Texas.
In 2015, Tacoma Rail handled just more than 1,500 cars — nearly half of 2014’s total.
“We all got caught up in the oil boom,” King said, “and then it went bust.”