Port’s East Kelly Railport Continues Strong Performance

Port San Antonio’s East Kelly Railport handled high volumes of cargo supporting the region’s energy, retail, manufacturing and construction sectors throughout Fiscal Year 2015, which concluded Sept. 30.

Operations at the railpark, located minutes from downtown San Antonio and adjacent to Union Pacific’s South San Antonio Classification Yard, served almost 10,000 railcars over the 12-month period.

Sand used in hydraulic fracturing in the nearby Eagle Ford Shale play continued as the primary commodity transferred from railcars onto trucks, accounting for two-thirds of volumes. Other commodities included lumber and steel used by the construction industry; aggregates; canned goods; and railcars served by GBW, which operates a large maintenance and repair site on the southern end of the Railport.

The 350-acre East Kelly Railport has direct access to Union Pacific Railroad and BNSF Railway trains. It is centrally located with quick connections to major area highways.

“Thanks to our strategic location and close collaboration with customers and partners, we continue to grow the range of industries we serve,” said German Rico, East Kelly Railport General Manager.

“It’s important to look at the long-term and prepare accordingly,” said Rico, who noted that in recent months Port customers CIG Logistics and Watco Companies made investments totaling $10 million to add silos, make warehouse improvements and extend rail spurs to facilitate storage and transload of sand and other supplies used in oil and gas extraction.

“We also want to ensure ever-greater diversity in the commodities that are handled,” added Rico. “There are growing opportunities as the home-building, road construction and manufacturing sectors in the region continue to pick up steam.”

“East Kelly Railport gives us the flexibility to expand and quickly adapt to changing markets,” said Jonathan Green, CIG’s President and CEO. “What’s more, the Port has been much more than a landlord—their team is a true partner in helping us promote our capabilities and grow our business.”

“America’s industries are increasingly turning to rail as a more efficient mode of transportation, especially over long hauls,” said Ryan Williams, Watco’s Vice President of Sales and Marketing. “Our investments in infrastructure at the Railport in recent years have created a strong centrally-located hub that can provide strategic support to any number of industries in the region on a project or long-term basis.”

Logistics service providers at East Kelly Railport processed 9,697 railcars in FY2015—consistent with volumes over the previous two fiscal years (see historic chart below).

Traffic during the last three years represents an almost four-fold growth in activity since the first full year of operations, FY2008, when 2,764 railcars were processed.

Other Port tenants who handle rail cargo include Fiesta Warehousing & Distribution, which operates more than 300,000 square feet of rail- and truck-served space for storage and distribution of food and other consumer goods.

About 150 acres remain for new built-to-suit facilities at East Kelly, including logistics and manufacturing options with direct rail access.

Watco Companies has played an essential role in the Railport’s growth. Starting in 2012, the Kansas-based firm, a leading operator of short rail lines across the country, doubled track at East Kelly from four to eight miles, including a new spur that allows the handling of unit trains (approximately 100 railcars at a time with the same type of cargo). These additions have grown the Railport’s capacity four-fold—from 5,000 railcars a year before the track additions to a current limit of up to 20,000 railcars a year.

In 2012 Watco launched the San Antonio Central Railroad, whose engine hauls railcars from Union Pacific Railroad and BNSF Railway trains outside the Railport and delivers them directly to customers’ facilities within Port property.

Currently, the Port is working with the City of San Antonio to undertake about $8 million in road improvements on Quintana Road immediately outside the Railport, which will begin in 2016. The new infrastructure, whose funding includes $6 million provided by the San Antonio-Bexar County Metropolitan Planning Organization (MPO), will widen the road and improve drainage—increasing overall safety at the Railport and for the surrounding community.