Transportation and logistics service provider OmniTrax Inc. is buying up another short-line railroad, announcing today that it will acquire the Ohio-based Cleveland Commercial Railroad (CCRL) and its wholly owned subsidiary, Cleveland Harbor Belt Railroad (CHB).
Terms of the deal were not disclosed, but the acquisition is expected to close in late August. As part of the acquisition, the CCRL will be renamed Cleveland & Cuyahoga Railway LLC and the CHB will be renamed Cleveland Port Railway LLC.
The news comes just a month after OmniTrax said it would buy Winchester & Western Railroad (W&W) from its parent company Covia Holdings Corp. for $105 million, saying today the move will allow it to provide freight delivery access to large population centers on the U.S. east coast.
In its latest purchase, OmniTrax will gain CCRL's 35 miles of track in Northern Ohio, which interchange with Norfolk Southern and the Wheeling & Lake Erie Railway. OmniTrax will also take over CHB's job of managing the Port of Cleveland's rail switching service, which primarily handles commodities including steel, scrap metals, grain, and chemicals. CHB interchanges with Norfolk Southern and CSX.
Adding those assets will allow OmniTrax to cooperate with the Port of Cleveland to increase productivity by finding better ways for rail and maritime to work together, OmniTrax CEO Kevin Shuba said in a release. "OmniTrax has been growing at an average annual rate of more than 20 percent for the past five years, and the acquisition of CCRL and CHB allows us to continue to strengthen the valuable network that makes us such an important partner to our customers," Shuba said. "We look forward to working with the Port of Cleveland and are confident our partnership will lead to significant growth in both marine and rail activity."
More specifically, the port plans to partner with OmniTrax to further build out the on-dock rail business at its general docks, according to David Gutheil, chief commercial officer at the Port of Cleveland. "OmniTrax has a substantial customer base across their existing network and a history of leveraging their strong partnerships with the Class 1 railroads to increase revenues and find new lines of business," Gutheil said. "We share their entrepreneurial spirit and look forward to working closely with their team and our terminal operator, Logistec, to provide cost effective and efficient solutions for our shipping community."
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