At a time when major companies are slashing payrolls and looking for a quick re-turn on investment, a waste-by-rail project would seem an unlikely candidate for corporate support. Taking years to develop, waste-by-rail projects require companies to commit staff and defer revenue during a lengthy gestation period.
"The projects take so long," said Nell Nunn, chief executive officer of NYP & Associates. "I think the railroads are beginning to realize it's not an overnight thing. The question is: will they dedicate staff over the long term for something that may not produce any revenue for 10 years? That's tough to answer right now."
Nevertheless, railroads and waste management companies, which have been taking write-offs with the best of them, continue to pursue a variety of large waste-by-rail projects.
Thomas J. Fitzgerald worked at Atchison, Topeka and Santa Fe Rail-way for 25 years. Now a consultant with Waste Management Inc., he de-votes his time to developing waste-by-rail projects.
"People would come along from time to time and talk about moving waste by rail," he said of his days at Santa Fe. "They were treated politely, but typically shown the door be-cause it never seemed to make any economic sense."
In time, Fitzgerald became a proponent of waste-by-rail. He saw that landfills were moving farther and farther away from the big cities where garbage was produced.
Next year, Waste Management and Santa Fe hope to begin Railcycle, one of the most ambitious waste-by-rail projects in the country, according to Fitzgerald. Each day, it will haul 9,000 tons of garbage from Los Angeles to a landfill in the Mojave Desert.
Fitzgerald has been involved with Railcycle from the beginning and now consults on the Waste Manage-ment project. He signed the original memorandum of intent on behalf of Santa Fe in the spring of 1989.
"That should give you some idea how long the time cycle is for these projects," said Fitzgerald. Just to get a project started, he must pick a landfill site, identify transfer stations, devise a schedule for trains and negotiate the shifting currents of the government permitting process.
A Market With Potential Waste and scrap materials provide just 2 percent of the industry's freight business, according to the Association of American Railroads. That total has increased from $2 million in 1988 to $77 million last year, according to Stephen Fraser, president of Fraser Group Inc., a consulting firm specializing in waste-by-rail, and president of En-virolease Inc., a rail container leasing company. While industry observ-ers agree that growth will continue, they remain uncertain about the de-mand for waste-by-rail.
"We believe there's a considerable market out there," said Ellison We-fel, business development manager for Consolidated Rail Corp. "But it's not as big as what people were predicting as recently as two or three years ago. There was kind of a gold rush mentality."
Commitment from railroads will determine the size of the waste-by-rail market, according to Nunn. Rail-roads could be carrying as much as 25 percent of the nation's municipal solid waste (MSW) within 15 years, if they plan conscientiously for the fu-ture, she said.
Currently, about 130 million tons of MSW ends up in landfills each year, according to the National Solid Wastes Management Association (see chart on page 36).
"The future depends a great deal on the railroads," said Nunn, who helped pioneer one of the first waste-by-rail projects when she worked for Union Pacific Railroad in 1984. "Waste-by-rail could be huge - it could even be bigger than what they originally projected. But it's not a market that's just going to come to the railroads."
Hauling waste is a deceptively complex operation for railroads. A normal railroad shipment involves large volumes of a homogenous pro-duct like coal or grain. Railroads have problems hauling waste be-cause of variations in its weight, density and other characteristics.
"When you're shipping waste by rail, you've got to keep it moving," she said. "One of the problems you run into is how to keep that chain going given the variations in the amount of waste that's generated and its weight. It's really a major coordination effort."
Although railroads have not been known for the kind of agility required in an uncertain market like waste disposal, they are adapting. All have either bought waste disposal facilities outright or entered into partnerships with major companies like Waste Management and Browning-Ferris Industries Inc. Burlington Northern Railroad Co. has been a leader in this area.
Barry Vann, director of environmental logistics for Burlington Northern, stressed the need for a disciplined operation. He pointed to his company's service in the Pacific Northwest as a model for future projects. Collecting solid waste from communities in Washington and Or- egon, a Burlington Northern train travels 340 miles before unloading at a Rabanco landfill in eastern Wash-ington. Using efficient double-stack railcars, the operation makes more than 100 round trips a year.
This year, Burlington Northern be-gan hauling incinerator ash from Hennepin County, Minn., to Gallatin National Landfill in Fairview, Ill. Now it has its sights set on Chicago, one of the country's largest markets.
Much of Chicago's waste ends up in two landfills in nearby Du Page County, both of which will close in 1997. Burlington Northern now is negotiating with the city of Chicago to haul garbage to Gallatin National.
"I don't think we'll make a final de-cision to build [track] for another year," Vann said. "But the chances that we do build are excellent."
Preparing For Regulations Chicago and other large markets are paying more attention to waste-by-rail as they prepare for impending federal landfill regulations from Subtitle D of the Resource Conser-vation and Recovery Act. Many mu-nicipal landfills are closing instead of trying to meet the expensive requirements.
Experts predict that the nation could have as few as 1,000 landfills by the end of the decade, compared with 6,500 municipal landfill sites in existence today. As small landfills near cities close, they will give rise to big landfills farther away. Longer hauls with big volumes of waste are a perfect match for transport by rail, Fraser noted.
As federal regulations take effect, landfill costs will become increasingly uniform across the nation, according to Fraser. Because all operators have to meet the same standards for landfill construction, their disposal rates will be uniform.
"Your customer wants the lowest combined transport and disposal cost," said Fraser. "Disposal now is increasingly a constant, so transportation is a key variable. Rail shows the most potential."
He blames delays in implementation of Subtitle D rules for some of the uncertainty in the waste-by-rail business. Once all landfills meet the new standards, waste-by-rail will be a much steadier market, according to Fraser. He is not alone in that be-lief.
"Until it's mandated, no one will move," said Nunn. "Then once the mandate's on, people are scrambling. They put it off until they absolutely have to do something. But you're not going to have small landfills anymore, and big landfills will require massive volumes. That's why rail makes sense."
Landfill regulations will be a big boost for railroads, agreed Vann. As landfills move farther away from cities, he said, railroads have a better chance of taking business away from truckers.
Today, trucks carry almost all of the nation's municipal solid waste, but railroads have become a better transportation buy as the distance of the haul increases. At a distance of 100 miles, a disciplined operation with a steady stream of waste is competitive with trucks, according to rail executives.
The lifeblood of a rail project is a big, steady supply of waste, according to Fitzgerald. In addition, the project should not be susceptible to cheaper, closer landfills."We think Subtitle D will mean larger landfills and, consequently, rail-served landfills," said Fitzgerald. "Certainly, from an economic view, I believe that. What's going to happen in practice is anybody's guess."
The location of large landfills that meet Subtitle D requirements is a variable that will play an important role in determining the future of waste-by-rail, according to Fitzger-ald. "If permitting authorities allow them to be located within reasonable driving distances from large metro communities, then probably rail won't take off; if they don't, rail will grow," he said.
While railroads and landfill operators look forward to the day when Subtitle D takes effect, they fear talk by some members of Congress who want to restrict shipments of interstate waste. Led by Sen. Dan Coats, an Indiana Republican, some lawmakers want to give states the power to bar out-of-state waste.
Currently, Congress is looking at four proposals to restrict interstate waste, but Fraser noted that each bill allows plenty of room for waste-by-rail projects. "None are draconian shutdowns of interstate waste," he said.
Heading East Jerry Stoneburner, president of Better Management Corp., a waste disposal brokerage in Youngstown, Ohio, works with truckers from the Midwest and South who unload tires or chemicals in cities like New York and backhaul MSW to landfills in Virginia, West Virginia, Pennsylvania, Kentucky, Ohio, Michigan, Indiana and Illinois. He arranges an estimated carriage of 1,000 tons of waste a day.
While Stoneburner believes waste-by-rail has a bright future west of the Mississippi, he questions the viability of rail on the other side of the river. "The East is definitely a truck market," he said.
Although Conrail is the dominant rail carrier in the Northeast, the company cannot compete with the less-than-scrupulous truckers who frequent markets in New York and other cities in the region. "It's pretty darn brutal," Wefel said of competition from truckers. "A lot of MSW is moving in backhaul trucks to landfills that are having fire sales."
Truckers are simply more efficient at the shorter, circuitous transportation patterns in the densely populated East Coast, according to Stoneburner. In addition, he noted, the big prize in the region, New York City, re-mains a tangled web of poor infrastructure and high la-bor costs.
"If I take a container over to Brooklyn and load it with trash, and then have to hire a cartage company to take it over to New Jersey to the double-stack areas, I'm looking at an extra $300 just for that cartage," said Stoneburner. "Labor rates are just so high in New York City. And it might take you eight hours or more just to run 20 miles or back."
But Vann sees no reason for the rail market to be constrained to the West, noting the opening of new rail-served landfills in Virginia and New York state. "I think the East may really be the wild card in all this," he said. "If you draw an 800-mile circumference from New York, there have to be plenty of potential landfills. You should be able to make that work."
Waste Management's focus on the western region of the country does not mean the company discounts waste-by-rail in the East, according to Fitzgerald. The Oak Brook, Ill.-based firm has "a couple active projects in the region. I think you'll see us move to the East in the next few years," he said.
On The Bright Side Instead of developing in a systematic way, waste-by-rail has sprung up on a project-by-project basis. The early years have been more challenging than railroads and waste companies had anticipated. Some of the problems were of their own making; others could not have been foreseen.
Despite some bumps in the early stages, the waste-by-rail movement is gathering strength. More than 20 major waste-by-rail projects are already working, with many more to be operating soon. Even Stoneburner has gotten into the waste-by-rail act. Using boxcars, he is moving more than 500 tons of baled MSW to a landfill 100 miles south of Atlanta.
Times are changing for waste-by-rail. While early projections for the market may have been overblown, railroads and waste companies are methodically setting up ventures around the country that are forming the foundation of a new industry.