Riding 'the Road of Anthracite' Entrepreneur: A hands-on CEO runs a short-line railroad carrying Pennsylvania's clean-burning coal.

Sun Journal

July 27, 1998|By Fred Rasmussen | Fred Rasmussen,SUN STAFF

PORT CLINTON, Pa. -- Here in the anthracite coal country of northeastern Pennsylvania, a land haunted by ghosts of the Molly Maguires and immortalized by novelist John O'Hara, one man's gamble and belief in a stretch of rusty railroad has finally paid off.

The path to success hasn't always been easy for Andy Muller, 50, a Hamburg, Pa., businessman, entrepreneur, former educator and rail fan. In 1982, at the request of local shippers who feared losing local rail service, he took over operation of 14 miles of Conrail track that was to be abandoned. He began operations with one wheezy locomotive and hauled 80 cars his first year.

Today, his Reading Blue Mountain and Northern Railroad Co. has expanded to 309 route miles, largely composed of track from the old Reading, Pennsylvania, Lehigh Valley, Jersey Central, Lehigh New England and Erie-Lackawanna railroads that disappeared into Conrail in 1976.

The line extends from Reading through Scranton to Mehoopany, Pa., with branches deep into coal country. It passes through the historic and scenic Lehigh River Gorge, one of the most beautiful rail vistas in the East.

The railroad bills itself as "the Short Route To Canada," and "the Road of Anthracite," advertising one of the commodities that fills its fleet of hopper cars.

The RBM & N interchanges at various points with Conrail, which will become Norfolk & Southern after the former railroad's breakup this fall. Another source of traffic for the RBM & N comes from five or six daily Canadian Pacific Railroad freights that enter the line at Dupont, Pa., and travel to Washington, Allentown, Pa., Philadelphia or New Jersey.

Muller and his railroad are part of a nationwide entrepreneurial phenomenon. As large railroads cast off low-density rail lines, local and state governments have purchased the lines and leased or sold them to new owners who operate free of restrictive union work rules and high wages.

This year, more than 500 short-line operators such as Muller operate about one-eighth of the nation's rail mileage.

With 33 locomotives, 70 full-time and 30 part-time employees, the RBM & N is expected to move about 22,000 carloads this year, 8,000 more than last year. It also owns 325 open-top hopper cars for moving coal.

Muller made a fortune buying and selling rare coins and precious metals during the 1970s and early 1980s, then retired, still in his 30s. He was sitting in a bar one day when a friend told him that Conrail was going to end local freight service and tear up the railroad.

"That was in 1982. The coin business had burned me out and I was kind of looking for something to do," says Muller, sitting at a picnic table outside his Port Clinton headquarters, which has been retro-designed to resemble a turn-of-the-century railroad station and office building. Painted cream with brown trim, the rambling two-story structure is topped by a tower with a four-sided clock.

"I told him we needed the railroad and it didn't make any sense," Muller recalls. "The state of Pennsylvania didn't want to lease it to me at first because I had no practical railroad experience, but I was a good businessman and they finally agreed."

Muller says, "Anyone can run trains, but surviving is another thing." For years he "threw money and more money" into the operation. "I never took a nickel. It wasn't until 1988 that we started getting traffic, and I was nearly broke."

Today, he owns all but 15 miles of the RBM & N and is chairman, chief executive officer and sole owner of its stock.

The railroad's headquarters and shops sit at Port Clinton, at the confluence of the Schuylkill and Little Schuylkill rivers. The port once played host to "chunkers," coal scows named for their origins in Mauch Chunk, Pa., now renamed Jim Thorpe. Loaded with anthracite, the chunkers traveled to Philadelphia, but were driven out of business after the arrival of the steam railroad in the last century.

Now anthracite, once known as "Black Diamonds," is returning a measure of prosperity to the coal fields of northeastern Pennsylvania after 50 years. The coal, high in carbon and low in sulfur, meets all clean-air laws. The RBM & N serves such major coal producers as Reading Anthracite Co. and Lehigh Coal & Navigation Co.

"Coal is only 40 percent of our business, but that is where the profit is. Coal makes you smart and it can be moved in volume and in unit trains," Muller says.

The RBM & N sends 40 to 50 coal trains a year to Baltimore's Consolidated Coal Pier for export. Muller expects to move more than a million tons of coal this year on his railroad.

Other commodities that travel on his trains include salt, sand, lumber and plastics.

"If you have a good railroad," says Muller, "it's a pipeline for such commodities."

John Waters, 49, spent 20 years as director of the Pennsylvania Department of Transportation's freight bureau before joining the RBM & N in 1992. He is its senior vice president for corporate development.

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