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| Company type | Freight Transportation Services and Logistics |
|---|---|
| Industry |
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| Founded | July 1, 1983; 42 years ago (1983-07-01) |
| Founder | Charles R. "Dick" Webb[1] |
| Headquarters | Pittsburg, KS 66762 |
Area served | North America and Australia |
Key people | Dan Smith, CEO |
Number of employees | 4,800 |
| Website | watco |
Watco Companies, L.L.C.(Watco) is an American transportation and logistics company based inPittsburg, Kansas, U.S. The company's core services are freight transportation, material handling and storage, logistics, railcar repair and maintenance.
Watco owns and/or operates 47 short line railroads in North America and Australia, with more than 8,000 miles (13,000 km) of track connecting to Class I railroads. It is one of the largest short line owner-operators in the U.S. The company also operates, and in many cases owns, over 70 transload and marine terminals, and a handful of terminals that specialize in the repair and maintenance of railcars and locomotives.
Watco has about 4,800 employees, led by Chief Executive Officer Dan Smith. The company earned $1.6 billion in revenues in 2022.
In 2023, the company was certified by Best Practice Institute (BPI) for the second year in a row as a Most Loved Workplace. In 2022, in collaboration with BPI, Newsweek named Watco to its annual list of America's Top 100 Most Loved Workplaces. Watco was also named a 2023 Newsweek Top 100 Global Most Loved Workplace®.[2]
Watco was established in 1983 by Charles R. "Dick" Webb. The first operation was an industrial switching operation inDeRidder, Louisiana that is still in existence. Webb then started his first mechanical operation, a railcar repair shop inCoffeyville, Kansas in 1985.
The Coffeyville mechanical shop was held captive to the major rail lines, and during discussions with theUnion Pacific the opportunity arose to purchase the line running fromNevada, Missouri, to Coffeyville. This was the Union Pacific's first short-line sale. Watco then looked to the West Region, acquiring the Blue Mountain Railroad in 1998, the Palouse River and Coulee City Railroad in 1992 and theEastern Idaho Railroad in 1993.
In 1998, it began operating theStillwater Central Railroad inOklahoma and the Timber Rock Railroad inTexas. TheKansas & Oklahoma Railroad was acquired in 2001 and the Pennsylvania Southwestern Railroad in 2003. In 2004, they started operations of the Great Northwest Railroad inWashington, the Kaw River inKansas andMissouri, and the Mission Mountain Railroad inMontana. In 2005 it began operating the Alabama Southern Railroad, the Louisiana Southern Railroad, the Mississippi Southern Railroad, and theYellowstone Valley Railroad in Montana. TheAustin Western Railroad was started in 2007 and shares rail with passenger rail. It also acquired Millennium Rail, a mechanical service company in 2007. The Baton Rouge Southern and the Pacific Sun Railroad were started in 2008, and they also acquired the mechanical services company Fitzgerald Railcar Services and Reload, a 25-year experienced transloading business. TheGrand Elk Railroad began operations in 2009.
In December 2010 Watco entered the Australian rail haulage market when it was awarded a 10-year contract to operate grain services for theCBH Group ofWestern Australia.[3][4] Operations commenced in March 2012.[5][6] In late 2016Watco Australia was awarded an infrastructure train contract withBrookfield Rail operating ballast and rail work trains.
On December 15, 2010,Kinder Morgan Energy Partners, announced an agreement whereby it would invest up to $150 million over the next year in Watco in exchange for apreferred equity position in the company. Kinder Morgan made an initial $50 million preferred shares investment on January 3, 2011.[7] Additional $50 million equity investment completed in December 2011.[8] Kinder Morgan will receive 3.25% quarterly distribution on the equity investment. Kinder Morgan is a leading pipeline transportation and energy storage company in North America. The transaction provides capital to Watco for further expansion of specific projects and offers Kinder Morgan the opportunity to share in the subsequent growth.
In April 2011, Watco began operating theAutauga Northern Railroad, betweenMaplesville andAutauga Creek, Alabama, the third short line in Alabama operated by Watco.[9]
On December 28, 2011, Watco began operations of theSwan Ranch Railroad[10] in the Swan Ranch Industrial Park inCheyenne, Wyoming. On January 1, 2012, Watco gained majority ownership of theWisconsin & Southern Railroad, a regional railroad inWisconsin, and on February 1, 2012, took over operations of theBirmingham Southern Railroad.[11][12]
On June 4, 2014, Watco andThe Greenbrier Companies announced that it would create an equally owned joint venture, GBW Railcar Services, providing railcar repair services.[13] This joint venture was dissolved in August 2018.[14]
In July 2018,Dan Smith was named Watco's new CEO.[15]
On March 30, 2021, Watco andCanadian National subsidiary Wisconsin Central reached a deal whereby WCL would sell roughly 900 miles of non-core rail lines located in Michigan, Wisconsin, and Ontario to Watco.[16]
In January 2022, Watco takes over operations to move cattle inQueensland, Australia,[17]
In June 2025, Duration Capital Partners[18] invested over $600 million in Watco for its use in long-term strategic investments that include obtaining ownership of Industrial Rail Services, an operator at Dow Chemical facilities in the U.S. and Canada.[19]
In October 2025, Watco began operations of the Great Lakes Central Railroad. The GLC team serves customers across many industries like agriculture, plastics, and oil and gas. The rail line stretches from Ann Arbor, Michigan, to northern Michigan including Cadillac, Thompsonville, Traverse City, and Petoskey.
| Railroad | Began operations | Track length (mi.) | Commodities | Facts |
|---|---|---|---|---|
| Agawa Canyon Railroad (ACR) | February 2022 | 289.96[20] | materials for the metals and forest products industries | Southern segment of the formerAlgoma Central Railway, acquired fromCanadian National |
| Alabama Southern Railroad (ABS) | November 2005 | 97.4[21] | iron and steel, paper products, aggregates | Acquired through lease agreement with KCS |
| Alabama Warrior Railway (ABWR) | August 2009 | 2[22] | coal, aggregates, pipe, scrap steel, cement | Started as Marylee Railroad in 1895 |
| Ann Arbor Railroad (AA) | January 2013 | 91.6[23] | automotive materials | Purchased from Ann Arbor Acquisition Corp, services mostly Chrysler plant producing Jeep Cherokees |
| Arkansas Southern Railroad (ARS) | October 2005 | 83[24] | corn and soybean products | Two branches, 32-mile northern branch and a 30-mile southern branch |
| Austin Western Railroad (AWRR) | October 2007 | 204[25][26] | aggregates, crushed limestone,calcium bicarbonate,lumber,beer, chemicals, plastic, paper | Shares rail with commuter operations inAustin, Texas |
| Autauga Northern Railroad (AUT) | April 2011 | 68.2[27][28] | paper products and aggregates | Third Watco Alabama short line |
| Baton Rouge Southern Railroad (BRS) | November 2008 | 43[29] | chemicals, bauxite, plastic pellets, raw coke, calcinated coke | Provides car storage and use by local chemical companies |
| Birmingham Terminal Railway (BHRR) | February 2012 | 178.3[30] | iron ore, coal, steel sheets and pipe | Provides rail service to Port Birmingham |
| Blue Ridge Southern Railroad (BLU) | July 2014 | 104.8 | woodchips, chemicals, paper, cement | Former Norfolk Southern T-Line (Murphy Branch), W-Line, and TR-line. Based inCanton, NC. |
| Boise Valley Railroad (BVRR) | November 2009 | 100[29] | frozen vegetables, lumber, fertilizer, fuels | Shares customers with the YSVR and EIRR |
| Cicero Central Railroad (CERR) | 2015[31] | 1.09[31] | pitch and other chemicals to create plastics. | Serves the Koppers Stickney Plant |
| Decatur & Eastern Illinois Railroad (DREI) | September 2018[32] | 239.5[33] | chemicals, plastics, soybeans, and corn | Operates on ex-CSX Transportation trackage acquired in 2018 and ex-Eastern Illinois Railroad trackage acquired in 2019 |
| Dutchtown Southern Railroad (DUSR) | 2021 | 41.1[34][35] | products for the chemical, gas, and energy industries | operates on trackage leased from Canadian National |
| Eastern Idaho Railroad (EIRR) | 1993 | 391.8[36] | corn, sugar, wheat, frozen vegetables, coal | Largest Union Pacific sale |
| Fox Valley and Lake Superior (FOXY)[37] | January 2022[38] | 609.8[38] | metals, forest products, building materials, chemicals, propane, and fuel | Former Canadian National lines; major interchanges are in Appleton, Green Bay, Spencer, and Wausau |
| Ithaca Central Railroad (ITHR) | December 8, 2018 | 56.2[39] | salt, plastics, magnesium chloride | Leased from Norfolk Southern |
| Geaux Geaux Railroad(GOGR) | December 2018 | 39.21 | paper products | primary customer in paper industry |
| Grand Elk Railroad (GDLK) | March 2009 | 329.2[40] | lumber products, corn, steel | Interchanges with 3 Class I railroads |
| Great Northwest Railroad (GRNW) | March 2004 | 286[41][42] | lumber, products, fertilizers, aggregates | Competition to reach Lewiston while the line was being built was called the "Clearwater River Railroad Wars" |
| Kanawha River Railroad (KNWA) | July 2016 | 384.8[43] | Chemicals, Aggregates, Agricultural Products | Second railroad to be acquired by Watco in the state of West Virginia. Appalachian & Ohio was briefly operated by Watco Transportation Services. Operates on former Norfolk Southern tracks in Ohio and West Virginia. |
| Kansas & Oklahoma Railroad (KO) | July 2001 | 974.4[44][45] | wheat, grain products, chemicals, soybean products | Has state and federal shipping agreements |
| Kaw River Railroad (KAW) | June 2004 | 23.6[46][47] | iron and steel,corn starch, lumber products, aggregates, plastics, industrial products | Expansions in 2005, 2006, and 2007 |
| Louisiana Southern Railroad (LAS) | September 2005 | 217.1[48][49] | paper products, aggregates, oils | Interchanges at Gibsland, Sibley, and Pineville |
| Mission Mountain Railroad (MMT) | December 2004 | 26[50][51] | lumber, wheat | Runs from Stryker to Eureka, served by the BNSF |
| Mississippi Southern Railroad (MSR) | April 2005 | 191.1[52][53] | corn and soybeans | Interchanges with KCS at Newton |
| Palouse River & Coulee City Railroad (PCC) | 1992 | 307.8[54] | wheat, frozen vegetables | $25 million in state-sponsored track rehabilitation backed by 100-year lease |
| Pennsylvania Southwestern Railroad (PSWR) | April 2003 | 14.6[55][56] | steel scrap, steel products | First Watco operation to service a steel mill |
| Pecos Valley Southern Railway (PVSR) | 2012 | 44.6 | sand, gravel, crude oil | Formerly operated by Capitol Aggregates |
| San Antonio Central Railway (SAC) | 2012 | 8.6[57] | Warehousing, distribution, and transloading | Operates within Port San Antonio's East Kelly Railport at night |
| Savannah and Old Fort Railroad (SVHO) | 2019 | 6.5 | Sulfuric acid, sulfur, gypsum, pulpboard, wood pellets, and petroleum | Interchanges withCSX. Located inSavannah, Georgia.[58] |
| Stillwater Central Railroad (SLWC) | 1998 | 399.9[57] | crude oil, sand, gypsum, cement, stone, steel | Serves on two branches: Pawnee to Stillwater and Tulsa to Duke |
| South Kansas & Oklahoma Railroad (SKOL) | March 1987 | 730.3[57] | grains, cement, coal, fertilizer, aggregates, steel, sand | Operates out of the historicCherryvale, Kansas depot and serves thePort of Catoosa atTulsa, Oklahoma |
| Swan Ranch Railroad (SRRR) | December 2011 | 21[59] | asphalt | The SRRR serves the Swan Ranch Industrial Park |
| Timber Rock Railroad (TIBR) | 1998 | 62.12[60] | aggregates, lumber products, plastics, fuel | Reduced to the single line running fromKirbyville, Texas toDeRidder, Louisiana. |
| Vicksburg Southern Railroad (VSOR) | January 2006 | 48.25[61][62] | lumber, steel | Delivers to the Port of Vicksburg |
| Watco Australia | May 2012 | NA - operator only | grain | First international operation of Watco, providing service in Western Australia and Queensland |
| Wisconsin & Southern Railroad (WSOR) | January 2012 | 808.5[63] | lumber, coal, liquid and dry fertilizers, corn, beans, plastic, aggregates, ethanol, liquid petroleum | Wisconsin's second-largest railroad |
| Yellowstone Valley Railroad (YSVR) | August 2005 | 4.3[64][65] | grains, plastics, ethanol, crude oil, sand | Provides service to the Dore Transload Terminal and interchanges with the BNSF |
Ithaca Central Railroad (ITHR) begins operations on December 8, 2018. Watco leases the railroad from the Norfolk Southern Railway. The ITHR consists of 48.8 miles of track running north from Sayre, Pennsylvania, to Ludlowville, New York
