History - RBMN

READING & NORTHERN RAILROAD HISTORY

 The Reading Blue Mountain & Northern Railroad, with corporate headquarters in Port Clinton, Pennsylvania, is a privately held railroad company serving eight counties in Eastern Pennsylvania.

 The Reading Blue Mountain & Northern Railroad began serving customers in 1983 as the Blue Mountain & Reading Railroad on the company's original thirteen-mile shortline connecting Temple to Hamburg, PA. Consolidated Rail Corporation (Conrail) abandoned the line and, as a result, the line came under the control of the Commonwealth of Pennsylvania. Local shippers, who formed a rail preservation group, called on Andrew Muller, Jr., an entrepreneur from Hamburg, PA, to operate the line. Their combined efforts saved the former Pennsylvania Railroad Schuylkill Division rail line and the service to the businesses that depend on rail for their livelihoods. Andy purchased the line from the Commonwealth in 2000 and it provides rail service to approximately eight customers.
In 1990, opportunity knocked and the railroad purchased one hundred thirty miles of railroad from Conrail, known as the "Reading Cluster." The trackage was comprised of former Reading Company track extending along the Schuylkill River Valley from Reading to the heart of the anthracite coalfields in Schuylkill County. Unprecedented growth ensued with increased traffic, track improvements, and a turn around in the anthracite coal industry - which was the historical mainstay of the Reading Division. Today, Reading & Northern serves over fifty customers on the Reading Division with diversity of commodities ranging from coal to birdseed and from potatoes to plastic.

 As Conrail continued their program of spinning off rail lines that did not fit into its core network, the Reading Blue Mountain & Northern expanded again. In August of 1996, RBMN acquired a portion of Conrail’s Lehigh Division. Comprised of over one hundred miles of former Lehigh Valley Railroad trackage, the rail line stretches from the southern foot of the Pocono Mountains at Lehighton through Wilkes-Barre and Scranton and onward to Wyoming County. RBMN negotiated overhead trackage rights over the Carbon-County owned 18-mile railroad that runs between Hometown and Jim Thorpe in order to connect its two divisions.

 As RBMN was absorbing its new Lehigh Division, Conrail was making big news of its own. In the fall of 1996 Conrail announced an intention to merge with CSX. After a fierce fight over the future of Conrail, CSX ultimately agreed to split Conrail with its main rival, Norfolk Southern Railway. On June 1, 1999, NS took over all of the portions of Conrail that connected with RBMN.

 The shift from Conrail to NS brought challenges and opportunities. To take advantage of the opportunities, and to help deal with the challenges, Andy Muller asked Wayne Michel to join the company. Since Wayne had handled line sales and shortline relations for Conrail, Andy decided he was the person to begin the process of developing the RBMN-NS relationship that would be critical going forward.

 By the turn of the century, the Company had been in the railroad business seventeen years. From its humble beginnings as an operator on a thirteen-mile segment of Commonwealth-owned track, RBMN had grown to be the third largest privately owned railroad in Pennsylvania with over three hundred miles of railroad under the Reading Blue Mountain and Northern banner. Now, RBMN set forth to consolidate its system and grow its business.

 In August of 2001, we completed negotiations with NS and Procter & Gamble that resulted in our taking over exclusive service to P&G’s largest manufacturing facility at Mehoopany, PA. Working with NS we were able to provide P&G with an excellent service and rate package that ensured the inbound raw material continued to move by rail. As a result, RBMN has enjoyed over four thousand carloads of P&G business each year since signing the agreements.

 Further south along the Lehigh Division, we signed another agreement to ensure long-term rail service to customers. In November of 2001, we reached an agreement to take over the ownership of the track within the Crestwood Industrial Park. With this agreement in place, we were able to guarantee good long-term rail service to the many customers located in the industrial park.

 Having worked to ensure a steady stream of customer business along our Lehigh Division, we turned our attention to reaching agreements for the use of the line as a key transportation corridor. Both NS and Canadian Pacific were interested in using the Lehigh Line as a north-south corridor for goods moving from the Northeast and Canada to the New York city market (via Allentown and northern New Jersey points) and points south and east of Reading. In June of 2002, we entered into a trackage rights agreement with NS and in August we renewed a prior agreement with CP. Combined, these two carriers would come to rely on the Lehigh Line to move over eighty thousand carloads a year.

 In the summer of 2002, we also took a critical step in enabling the direct physical connection of the two Divisions without the need to run over any foreign track. In July, we entered into a long-term lease of two abandoned railroad bridges over the Lehigh River from the Department of Conservation and Natural Resources. With that agreement in place, we were able to turn our attention to restoration, service of the rail infrastructure, and the necessary work along the Lehigh River to connect the railroads. The project would culminate in the opening of the Bridges and the new railroad in November of 2003. With the physical connection in place, Andy Muller took steps to ensure a friendly arrangement with the shortline operating the Carbon-County owned track. Andy bought a fifty percent interest in the CSKR in late 2003 and he and his partner, CSKR’s President, Jim Zurn, agreed to hire RBMN to manage and operate the railroad in January of 2004.

 The two Divisions were now connected and the Lehigh Line had a solid business base from both on-line customers and overhead trackage rights revenues. Moreover, the Lehigh Division was a smooth operation as a result of an agreement made in May of 2003 to have NS deliver inbound interchange cars to RBMN at Penobscot. RBMN had begun restoring the yard in 2000 and by 2003 we were able to offer NS a good interchange location, which resulted in greater fluidity of operations and improved car cycle time.

 By the time RBMN celebrated its twentieth anniversary in the fall of 2003, it was a very successful shortline. We had taken our Lehigh Division and connected it with the Reading Division, we had built solid traffic bases on both sides of our system, and we had put in place an excellent operation with upgraded locomotives and freight cars. We were gaining a reputation for customer service and attention to detail.

 Evidence of our customer focus became clear to all when, in 2002, rail industry publication Railway Age chose the Reading Blue Mountain & Northern Railroad as Regional Railroad of the Year. We won the award by creating an innovative sand/stone backhaul move that involved three railroads. With Norfolk Southern in the middle we worked with another shortline, the Winchester & Western, to put together a truck competitive move that took thousands of trucks off the highway. We followed that up in 2004 when we were awarded an NS Marketing Award from the NS Agriculture Products Group for our outstanding business development.

 With a strong foundation in place, RBMN proceeded to focus on continuous improvement. In December of 2004, we purchased a ballast regulator in order to assist our maintenance of way gang. Earlier that year, we had purchased a welded rail train for installation along the Lehigh Line portion used by our trackage rights partners. And, in January of 2005, Andy Muller named Wayne Michel President of the railroad with responsibility for day-to-day operations.

 Also in 2005, RBMN took a big step forward to expand its passenger excursion business. RBMN had always had a passenger program. But with the acquisition of the Lehigh Line and the new connections between Jim Thorpe and the Lehigh River gorge, RBMN was now positioned to offer the region a quality tourist attraction. In May of 2005, the Lehigh Gorge Scenic Railway was born. Every weekend and holiday from May to Christmas, hundreds of visitors to Jim Thorpe board our passenger coaches for a ride into the Gorge.

 As our operation and business expanded, the need to upgrade facilities grew as well. In the spring of 2006, we proudly opened our brand new Penobscot Yard office building. What a beautiful addition to the railroad!

 Shortly thereafter, Mother Nature brought the region and us a treat…massive rainstorms and flooding. The Flood of June 2006 will long be remembered. The flooding shut down the entire regional rail network for days. But RBMN was up and running faster than anyone else due to the amazing work of our maintenance of way team.

 As RBMN grew, so did its commitment to its employees. Along with regular pay increases and profit sharing checks, the Company decided to offer the best health plan in the region to its employees. And it did so with no deductibles! RBMN also decided to go smoke-free and instituted a policy of not hiring smokers. The ultimate employee benefit, however, occurred in the winter of 2007 when Andy Muller and his family personally paid to send every railroad employee plus a guest on a three-day paid vacation to Disney World. What a treat!

 With a solid freight business in hand and a growing passenger operation underway, Andy Muller decided to begin the renovation of his steam engine, No. 425. At the end of 2007, No. 425 was back in service. In 2008, No. 425 will take thousands of guests on steam excursion trips throughout our operating territory.

 Later this year, we will celebrate the 25th Anniversary of the railroad. It has been a wonderful ride. You can keep abreast of RBMN developments by coming to this website and reading our quarterly newsletter.

Thanks for your interest and your support.