READING EAGLE - April 25 HE HAS INSIDE TRACK ON COAL: ANDY MULLER BUILDING UP HEAD OF STEAM OVER GROWTH By Don Spatz A former teacher and gold dealer, Muller is cashing in on the revival of anthracite and the resulting increase in rail traffic for his Reading & Northern Railway. Talk about the revival of anthracite coal, and Andy Muller's eyes light up. He neither wants to buy it nor use it. He just wants to haul it on his 2 1/2-year-old Reading & Northern Railway, the growing "Road of Anthracite" short-line railroad which has a lock on Pennsylvania's entire hard-coal region and beyond, from Reading to Hazleton, from Jim Thorpe to Sunbury. For the 45-year-old Muller - a former school teacher turned gold dealer who started railroading 10 years ago - it's both the fulfillment of a boyhood dream and a hectic take-advantage-of-the-time business. "In 10 years, I could be broke," Muller said. "But I'm giving it my best shot. I had a lot of things go right with this; it's like a dream come true." Muller's dream at the moment consists of three separate railroads; 218 miles of track under rehabilitation; 90 employees; a headquarters moving shortly from Hamburg to Port Clinton; and a projection of moving 9,500 carloads this year, up a third from 1992 and more than 100 times what he moved a decade ago. A Hamburg High School graduate, Muller said his classmates laughed at his coin-collecting hobby, although that turned into a business that paid for his entry into railroading. He earned a bachelor's degree in education from East Stroudsburg University; taught fifth grade in Fleetwood for four years; ran a gold and coin shop in Hamburg on the side; quit teaching in 1973 and started full-time in the coin shop in 1973. He made a bundle and "retired" in 1981 after gold and silver prices collapsed. The way Muller tells it, he said he was standing on a corner one day in 1983 when a friend told him Conrail was about to tear out the old Penn Central line from Hamburg south. The friend suggested Muller buy it instead, to save shippers' main transportation link. Always an avid rail buff, he did. Muller turned the 13 miles of track into the part-tourist, part-freight Blue Mountain & Reading line. Eventually, he added four other short lines, building Blue Mountain's trackage to 43 miles. Muller said he lost money every year on the those lines, but did so to prepare for what he knew would be Conrail's eventual sale of its long-neglected coal-region track. In December 1990, he won over 17 other bidders to purchase - for an undisclosed price - 124 miles of dilapidated track on the former Reading Co.'s main line to Pottsville and beyond, and the Reading Co.'s Little Schuylkill line which branches off at Port Clinton. The "Road of Anthracite" was born. Last July, he bought another 52 miles of track near Hazleton, turning it into the third line: the East Mahanoy and Hazleton Railroad. With track rights over several miles of existing Conrail lines in the area, he has the coal region sewed up at a time that coal - a dying commodity the past 30 years - is coming back. More efficient furnaces can burn it more cheaply and cleanly, including the culm, the coal refuse piled up in mountainous heaps across the region. Muller said total carloads on the region's rails went from 150,000 or so in their heyday to 7,000 in 1990, Conrail's last year. Reading & Northern moved 5,900 carloads its first year, of which 3,800 were coal. "Those were the economic slump years, and we pretty much maintained the existing traffic on the lines," Muller said. "That's unusual, because railroads always take a pounding in recessions. But now we're starting to see a turnaround, and even a slight increase." Reading & Northern has picked up new customers - among them three steel mills. Last year, the railroad moved 7,100 carloads, 5,100 of them coal; and this year, Muller said, it expects to move 9,500 carloads, 7,500 of them coal and most of that heading for export at Baltimore. "We're tying all the anthracite region to one railroad, all coming to Reading" where Conrail picks up the cars, he said. "Reading will become a railroad center again. . . ." Earlier this month, Reading & Northern won a contract to haul culm to Panther Creek Partners' culm-burning cogeneration power plant in Nesquehoning. "They were using 60 trucks a day to haul the culm, and the neighbors were upset at the mess on the roads, especially with a muddy spring," Muller said. His contract replaces 60 trucks on the roads with 15 railcars on the tracks. The company bought nearly three dozen 100-ton western coal cars to move the culm, and Muller said they'll be the first with Reading & Northern's initials on them. Moreover, he said, the new culm-burning cogeneration plants coming on line are changing the landscape, flattening the culm banks. "Within 30 years, you won't recognize the coal regions," he said. The culm-hauling contract, which could require up to 3,000 carloads a year, is the first time a railroad has taken business away from trucks in 30 years, Muller said. There's plenty of room to grow; two million tons of anthracite are mined annually. Since Reading & Northern is hauling about 600,000 tons, Muller is scrambling to capture a larger share of the existing market. There also are more culm users - one in Delaware County trucks in 400,000 tons of culm a year, but Muller notes there's a rail line to its front door. "There's easily the potential for 20,000 carloads (a year) here, but that's up to the government," Muller said, adding that much of the transportation industry is determined by government action. "There's no free market economy when government is pushing for one thing and blocking another." Although mostly a coal hauler (and most of that from the region's three largest mines), Reading & Northern also hauls regular freight as well, from cocoa beans to lumber to sugar. Muller said railroads "are so darn efficient, if left to operate in a free market economy, they will do well." Yet Reading & Northern has won two state grants, totaling $6.5 million, to help rehabilitate its track and replace nearly 60,000 ties. Muller defended the grants, noting Conrail had gotten no government aid for track work for 20 years and so hadn't made any improvements. "We're getting a one-time grant to help fix the tracks so we can compete, and after that, we'll basically be doing our own thing with no subsidy for operations," he said. Nevertheless, he said, state and local governments are putting a new emphasis on old rail lines; rather than letting them be broken up and sold off, the governments are "banking" them - putting them in trust until they can be rehabilitated and used again. Rehabilitation costs about $10,000 a mile, but building a new line can cost $1 million a mile, he said. Despite his decade of running the three lines and their 90 employees, Muller still has an aversion to written business plans. "I know exactly where I'm going; I can do it better than I can write it down," he said. And where he is going is Port Clinton - moving his headquarters to a more central location at the junction of the tracks. A car barn is nearing completion there, and Muller wants to begin work in July on new station that outside will be a copy of the station in Columbia, Lancaster County. Inside it will be high-tech. He hopes to have it complete by next summer. His company, he says "is doing very well." Ever mum on money, he won't say just how well, but he acknowledged it's not in the red. He said the lines are doing well because his employees can give better service than the "too-large-to-care" bigger lines. "The only thing I know is that since 1983, I've been able to accomplish all this that nobody else could, even those with railroad experience," he said. "It's fortunate when you do something in life you enjoy."