A Business Expands With the Help of Freight Rail

Freeport-McMoRan, one of the largest producers of copper in the world, operates the Morenci copper mine and four other production sites throughout Arizona. The Morenci mine — located near Clifton, Arizona — has produced copper for over 100 years, while supporting several small communities in the area. Today, the company is writing a bright new chapter in their history — a testament to the possibilities that are realized when American businesses leverage the power of freight rail.

business-expands_in-article-imageIn recent years, the demand for copper has grown rapidly, particularly in China, where today more than 40 percent of the world’s copper is consumed. In order to help meet this demand, Freeport invested almost $2 billion into an expansion of their Morenci operations. One of the company’s largest priorities was improving the first step of the supply chain: carrying copper products from the Arizona mines to a transfer facility in Lordsburg, New Mexico.

Traditionally, Freeport had relied upon a small short line railroad, the Arizona Eastern, for this leg of the journey. However, over the years, underinvestment in the rail line had led to regular service interruptions as infrastructure fell into disrepair. In September 2011, the Arizona Eastern was purchased by Genesee & Wyoming, North America’s largest owner of short line and regional freight railroads, and immediately sat down with Freeport to discuss what the company needed from a freight rail partner.

“When the new Arizona Eastern management came in and saw the state of the railroad, they put in motion significant upgrades all the way around,” said Jason Tininenko, Freeport’s global supply chain manager.

Among the changes, the short line railroad reached out to others involved in Freeport’s supply chain, including Union Pacific. Together, the two companies collaborated to improve service schedules for Freeport. The Arizona Eastern also invested heavily in its infrastructure by replacing inadequate bridges, upgrading track and standardizing equipment.

One of the biggest changes was the railroad’s decision to replace a mix-and-match fleet of aging locomotives with a uniform fleet of modern engines. Before the change, Freeport struggled to plan their shipments since some locomotives could pull more than others, and packing the same commodity into different car types would add time and expense to the loading and unloading process. A uniform fleet has helped to streamline the loading and unloading process, reduce delivery times, increase efficiency, and increase safety throughout the network.

Today, thanks to this collaborative effort, Freeport has the reliable and cost-effective rail service it needs to succeed. For more than three years, the Arizona Eastern has operated injury-free, and since 2011 monthly carloads have increased 30 percent. This safe and reliable service has, in turn, helped Freeport continue to expand its Arizona operations. In fact, Freeport and Arizona Eastern recently opened a new rail yard near the mine that will increase throughput by 25 percent.

For Freeport, having a partner dedicated to improving service has been invaluable. Today, the company is delivering American copper throughout the world, from Shanghai to Connecticut to Spain, while also delivering local economic benefits to communities in the state of Arizona — all with the help of safe, efficient and cost-effective freight rail.

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