The Conversation: KC Southern CEO David Starling has a strong connection to the Panama Canal

08/09/2014 7:00 AM

08/09/2014 5:22 PM

David Starling of Kansas City is president and CEO of Kansas City Southern. Before taking his current position, Starling worked for the company in Panama for nine years, overseeing the rebuilding of the Panama Canal Railway, which runs parallel to the canal. Starling will talk with R. Crosby Kemper III about the history of the Panama Canal Railway on the eve of the 100th anniversary of the Panama Canal, at 6:30 p.m. Thursday at Plaza Branch library; RSVP at KCLibrary.org. This conversation took place in Starling’s Quality Hill office.

What is Kansas City Southern’s involvement in the Panama Canal Railway?

We own half of it, and the other half is owned by Mi-Jack Products, a crane company out of Chicago.

The canal is 100 years old this month. How old is the Panama Canal Railway?

It predates the canal. There used to be a government contract mail service that was called Pacific Steam. They came down the East Coast of the U.S. and went to Panama by steamer, then they would go across the isthmus and catch a steamer to San Francisco. In 1849, the decision was made to build a railroad across Panama, and it was completed in 1855.

The railroad was initially built to help move products, but it became very successful as a passenger line because of the gold rush in San Francisco. At the time, that was the quickest way to get to San Francisco from the East Coast. It was a lot faster than going across the country in covered wagon, and the transcontinental railroad wasn’t completed until 1869.

How did Kansas City Southern come to co-own the railroad, and what did rebuilding it entail?

The Panamanian government had taken ownership of the railroad in 1977. They decided to privatize it in 1998. We started construction in January of 2000. The railroad had fallen into disrepair to the point where it was practically impassable.

The line is 47 miles long, and we changed it from a 60-inch gauge to 561/2inches, which is standard gauge in the U.S. We removed all the rails and ties, and completely rebuilt it for 70 miles per hour. We used 280,000 tons of ballast from Nova Scotia, 150,000 concrete ties from Columbia and 11,000 tons of steel from Sydney Steel in Canada for the rails.

We started passenger service in July 2001 and freight service in December 2001.

How important is the railway internationally in terms of moving freight?

It is the only place in the world where you can unload a container on one ocean, move it across on a train and load it on another ocean within one customs zone.

Why would someone take the containers off a ship, put them on the rails and load them onto another ship instead of just sending the ship carrying the containers through the canal?

Let’s say you have a weekly sailing every Friday out of Santiago, Chile, with grapes, frozen salmon and wine going to New York. You can completely unload the vessel on the Pacific side, take the freight across by train, load it onto larger vessels on the Atlantic side, and you save the cost of the ship and its crew paying transits to go through the canal and back. And the freight gets across quicker on the rails than through the canal.

Do tourists go to Panama just to ride in the passenger cars, or is that service used by people who are already there?

There was never a plan to have passenger service. But as we started building the railroad, the cruise lines started calling the government of Panama, looking for tourist attractions.

After we started our passenger service, cruise ships would come into the Atlantic side, passengers would ride the train over to the Pacific side, do a tour on the Pacific side, then ride the train back. They call it the Two Oceans Railroad. It was very popular. We could carry about 300 passengers.

I heard you have some unusual cars for the passenger service.

Five of the coaches were from Amtrak service. They were called Clocker coaches, and we found them in storage in Delaware and took them to our shop in New Orleans and completely rebuilt them.

Then we found a dome car that was an ice cream parlor in Florida — it had no rail wheels underneath it — and it was for sale. So we bought that and took it to our shop in New Orleans and about a million dollars later, we had a restored full dome car, and we moved it down to Panama. We use it for premium seating now.

To reach Cindy Hoedel, call 816-234-4304 or send email to choedel@kcstar.com. Follow her at Twitter.com/cindyhoedel, and on Facebook.

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