Subscriber & Member Login

Login, or register today to interact in our online community, comment on articles, receive our newsletter, manage your account online and more!

Short line economics

2404 views
39 replies
1 rating 2 rating 3 rating 4 rating 5 rating
  • Member since
    October, 2001
  • From: OH
  • 16,744 posts
Posted by BRAKIE on Monday, March 25, 2019 8:09 PM

MIKE0659
It isn't cheap to run a shortline railroad. It is way more expensive than those outside the industry can imagine. It's why so many railroads fail, it just bleeds the owner dry.

I may not be a insider but,I've studied short lines since the 60s and seen many come and go only to be restarted by another short line operator under a new name.

Then,you have short lines that has turn unprofitable branch lines or urban industrial leads into money makers..

 

R.J.Corman and Jerry Jacobson was tops in their field as far as turning things around on trackage with few customers. R.Js Western Ohio Line is one example of what can be done after a Class One calls it quits over a certain piece of track.

While WE is a regional we can't overlook that sucess story no more then we can overlook former regionals Mid-South or Wisconsin Central.

We both know most class ones would rather not be in the local switching business.

 

Larry

SSRy

Conductor

“Shut one’s eyes tight or open one’s arms wide, either way, one’s a fool.” Flemeth-the witch of the Wilds.
  • Member since
    March, 2003
  • From: Central Iowa
  • 4,668 posts
Posted by jeffhergert on Wednesday, March 27, 2019 12:24 PM

Doughless

 

 
MIKE0659

 

What you don't state is how long your shortline examples might be. If you find railroads that meet those numbers, you may find they don't actually operate many miles of railroad, or they don't run 5 days a week. The length of the railroad is a key to this. You have to have revenues sufficient to maintaining all those miles.

I know from the inside what it costs to run a profitable shortline and that number of 10 cars per mile/per year is pretty good. Up to that point you are fighting your fixed costs, but when you break over that point, it is nearly all pure profit. Until you hit that next level where you have to add people and equipment and up your track maintenance to meet the new traffic levels.

 

 

 

Mike.  Thanks for the inside info. 

Just to be clear about the rule of thumb.  10 revenue cars/mile per year.  For a 16 mile shortline, that's 160 cars per year, or about 3.1 cars per week.  (I can do the math, just wanted to example what you wrote.)

 

I think you need to recheck the earlier posts.  His earlier post, and one of mine also, said it's 100 cars per mile per year. Your 16 mile short line would need 1600 cars per year or about 31 loads per week.

Jeff   

  • Member since
    December, 2008
  • From: In the heart of Georgia
  • 3,006 posts
Posted by Doughless on Wednesday, March 27, 2019 4:55 PM

Ok.  That makes more sense.

- Douglas

  • Member since
    October, 2001
  • From: OH
  • 16,744 posts
Posted by BRAKIE on Wednesday, March 27, 2019 5:27 PM

Doughless

Ok.  That makes more sense.

 

Doughless,Your short line can operate two or three days a week and still have a black ink bottom line since that lowers the overall operating costs.

I knew of one shortline that operated as needed until their only customer closed in 1970. The Morehead & North Fork down in Ky. The owner was the engineer and when needed the brakeman. Traffic was inbound empty boxcars and outbound brick.

Larry

SSRy

Conductor

“Shut one’s eyes tight or open one’s arms wide, either way, one’s a fool.” Flemeth-the witch of the Wilds.
  • Member since
    June, 2006
  • From: New Jersey
  • 88 posts
Posted by MIKE0659 on Sunday, March 31, 2019 8:14 PM

Sorry about that Douglas, I dropped a zero there. It is 100 cars per mile per year.

Mike

Roanoke & Western Railway Company
  • Member since
    October, 2001
  • From: OH
  • 16,744 posts
Posted by BRAKIE on Sunday, March 31, 2019 9:37 PM

MIKE0659

Sorry about that Douglas, I dropped a zero there. It is 100 cars per mile per year.

Mike

 

A  "Dream" short line to be sure. A  10 mile long short line would need 1,000 cars a year. A 25 mile long short line would need 2500 cars a year..Good luck with that unless there is a major shipper or receiver on the line.

Those are nice crunch numbers but,in my studies of short lines that number falls short for the majority...

 

Larry

SSRy

Conductor

“Shut one’s eyes tight or open one’s arms wide, either way, one’s a fool.” Flemeth-the witch of the Wilds.
  • Member since
    December, 2008
  • From: In the heart of Georgia
  • 3,006 posts
Posted by Doughless on Sunday, March 31, 2019 10:03 PM

BRAKIE

 

 
MIKE0659

Sorry about that Douglas, I dropped a zero there. It is 100 cars per mile per year.

Mike

 

 

 

A  "Dream" short line to be sure. A  10 mile long short line would need 1,000 cars a year. A 25 mile long short line would need 2500 cars a year..Good luck with that unless there is a major shipper or receiver on the line.

Those are nice crunch numbers but,in my studies of short lines that number falls short for the majority...

 

 

A 10 mile long short line would need 21 cars per week to break even.  That doesn't seem like a lot to me.  Three 7-car trains per week if you wanted to free lance.

- Douglas

  • Member since
    October, 2001
  • From: OH
  • 16,744 posts
Posted by BRAKIE on Monday, April 01, 2019 4:29 AM

Dougless,Some short lines would love 7 car trains but,they hang on with 3-4 cars daily.

In that ten miles they may only have three customers and as we know the number cars a short line handles depends on the customer needs and to a degree whims..

And never forget the truckers get more then their far share of that customer's outbound and inbound shipments.

If you study short lines under GWI's ownership and look them up on Google or Bing maps you can see how many customers they serve by following their track.

Look at Corman's short lines customer base versus mileage.

https://www.rjcorman.com/companies/railroad-company/our-short-lines

Again those numbers may fall short.

Larry

SSRy

Conductor

“Shut one’s eyes tight or open one’s arms wide, either way, one’s a fool.” Flemeth-the witch of the Wilds.
  • Member since
    December, 2008
  • From: In the heart of Georgia
  • 3,006 posts
Posted by Doughless on Monday, April 01, 2019 6:21 AM

BRAKIE

Dougless,Some short lines would love 7 car trains but,they hang on with 3-4 cars daily.

In that ten miles they may only have three customers and as we know the number cars a short line handles depends on the customer needs and to a degree whims..

And never forget the truckers get more then their far share of that customer's outbound and inbound shipments.

If you study short lines under GWI's ownership and look them up on Google or Bing maps you can see how many customers they serve by following their track.

Look at Corman's short lines customer base versus mileage.

https://www.rjcorman.com/companies/railroad-company/our-short-lines

Again those numbers may fall short.

 

4 cars x 5 days is in the same ballpark as 7 cars x 3 days.  Special runs on weekends.  Its all good.

- Douglas

  • Member since
    October, 2001
  • From: OH
  • 16,744 posts
Posted by BRAKIE on Monday, April 01, 2019 9:36 AM

Doughless
Special runs on weekends. Its all good.

Dougless,Some short lines charges a surcharge for weekend service since the crew may be in overtime.

I know of one short line that offered Tuesday through Saturday service since that was some customers wanted  service.

Another now defunct  short line that  I visited back in the late 80s operated on a as needed bases until their last two customers went to trucks..

Their Alco S-1 was stored in their metal engine shed until around '92 or maybe '93 when the scrappers removed the rail and steel bridge.. I never did find out what happen to that S-1 even though down deep I suspect it was cut up on the spot along with the engine shed.

At any rate with the weekly feast or famine operation I marvel how many so/so short lines manage to stay afloat.

Larry

SSRy

Conductor

“Shut one’s eyes tight or open one’s arms wide, either way, one’s a fool.” Flemeth-the witch of the Wilds.

Subscriber & Member Login

Login, or register today to interact in our online community, comment on articles, receive our newsletter, manage your account online and more!

Users Online

Search the Community

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
Model Railroader Newsletter See all
Sign up for our FREE e-newsletter and get model railroad news in your inbox!