Train Track Abandonment Question.

[enr2099]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by BNSF railfan.

If a Railroad requests to STB to have a Rail line Abandoned and the STB says no......Can that RR refuse to run their Trains on it even though the STB still says no to the Abandonment.
Thanks.

Railroads will file for abandonment on marginally profitable lines (or lines that have become a nuisance for some idiosycratic reason) once traffic levels have ostensibly shrunk to the point that the line in question is "obviously" no longer profitable. The trick of course is to find a way to eliminate as much traffic as possible a year or more prior to filing for abandonment to guarantee STB approval.

The usual scam is to either purposefully price service at a rate that is not competitive with truck rates and/or provide such dismal service that it forces the remaining customers to turn to other transport modes. Once traffic has disappeared or been severely reduced in carloads for a year or more, then the railroad files for abandonment under the guise of there being "no current traffic" or "current traffic does not support viability."

CP did this with the E&N in the 1980's. In the 1980's CP still had a fair amount of freight traffic to Victoria, the Victoria Turn ran three times a week with as many as 20 cars each way(from Nanaimo). In 1989, when VIA Rail was going to cut the Malahat, CP set about getting rid of freight customers in Victoria. They stopped shipping to several warehouses WITHOUT NOTICE. The warehouses didn't know they were no longer being served by the railroad until finding their spurs gone one morning, they were left scrambling to find alternative transportation. Garden City Warehouse was told to move their location to Nanaimo, or start trucking from Vancouver, because CP was refusing to ship to their Victoria location. By 1999, when RailAmerica assumed whatever little control CP gave them, Victoria had one freight customer that receieved 2 cars a week.

CP's actions in the 1980's is why the E&N is in the situation it is in now. CP also screwed around with the Pulp Mill in Port Alberni, serving the mill when they felt like it, when the 20 year contract expired in 2001 it was a small wonder that the mill went to truck.

CP hasn't stopped either, the E&N traffic is left at Coquitlam for weeks on end, the E&N is forced to interchange with CP, as CP owns the barge slip and the yard at Wellcox.

[Anonymous]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by BNSF railfan.

If a Railroad requests to STB to have a Rail line Abandoned and the STB says no......Can that RR refuse to run their Trains on it even though the STB still says no to the Abandonment.
Thanks.

Railroads will file for abandonment on marginally profitable lines (or lines that have become a nuisance for some idiosycratic reason) once traffic levels have ostensibly shrunk to the point that the line in question is "obviously" no longer profitable. The trick of course is to find a way to eliminate as much traffic as possible a year or more prior to filing for abandonment to guarantee STB approval.

The usual scam is to either purposefully price service at a rate that is not competitive with truck rates and/or provide such dismal service that it forces the remaining customers to turn to other transport modes. Once traffic has disappeared or been severely reduced in carloads for a year or more, then the railroad files for abandonment under the guise of there being "no current traffic" or "current traffic does not support viability." Usually at that point the STB will grant the abandonment and the railroad is free to sell the rails for scrap to China. Such has happend to more than a few profitable lines over the last few decades.

If this process ever really happened, it hasn't been so for decades, at the very least since passage of the Staggers Act in 1980. Anything that is capable of making a profit nowadays is either kept or spun off to a short line or regional so the Class 1 can keep the traffic...

LC

One needs to include the spector of opportunity costs as it relates to a company purposefully disrupting service and then subsequently abandoning a seemingly profitable line. As we all know, railroads' ROI are pathetically low. For the various micro cases, a business that is operating a railroad should always calculate whether their investment would be more fruitful elsewhere. If indeed the pressures of investors are constantly forcing rail operators to improve ROI's, then you can get a good picture of what really goes on in cases of railroad abandonments.

Remember, anything above 0% is technically profit. But profit returns of say 5% in any business will induce re-investment pressures toward other markets. There were and are plenty of shortlines, branchlines, even regional railroads which technically made a profit on there various rail holdings, but the profit margin itself may not match that of ROI's in other sectors which are also open to investment opportunities.

This is one of the major problems with having railroad companies owning the right of way (and taking on the expense of maintaining that right of way against their operating revenues). In theory, probably 90% if not all of the current rail infrastructure could be abandoned by the Class I owners if they were allowed, because the stockholders would get better rates of return in other markets. Of course, to do so would cause massive economic turmoil, thus it is more judicious to accompli***he task in the form of thousands of small slices.......

[Anonymous]

QUOTE: Originally posted by mudchicken

Directed service and LC, it does happen....TP&W, old Youngstown & Southern/ CCPA for openers....Watch what is going on with old UP Saratoga/Encampment Branch in Wyoming right now.

MC-

I think we are talking about apples and oranges. I am well aware of the STB regs and U.S. Code provisions concerning directed service. (49 USC Section 11123) Directed service is the remedy imposed by the STB when service to customers is inadequate or nonexistent. It isn't a calculated running off of customers that FM describes. I based my response upon the fact that the lines in question needed to be capable of escaping the red ink without substantial change in part based upon what Mark Hemphill said above.

As to the TP&W, I'm sure that there are folks that wold love to abandon and take up the portion of that line with a handful of customers. Last I heard though, Pioneer Railcorp was still seeking an opportunity to serve those customers under directed service procedures or a feeder line application (49 USC Section 10907 and 49 CFR 1151 et seq). So, that is an example of a short line taking over rather than an abandonment.

I'm sure there are examples of railroads running off trafic. Many of those examples are in places where there just isn't adequate traffic for the railroad to make a go of it. Even short lines have healthy cost structures nowadays.

LC

[mudchicken]

Directed service and LC, it does happen....TP&W, old Youngstown & Southern/ CCPA for openers....Watch what is going on with old UP Saratoga/Encampment Branch in Wyoming right now.

[Anonymous]

Thank you all.

[gabe]

I think there are a lot of people who are awfully glad the IC was not permitted to abandon its Indianapolis - Effingham line. Judging by the success of the Indiana Rail Road, I think that is the exception that proves the rule in terms of railroads getting the math right.

Gabe

[CSSHEGEWISCH]

In the regulated era, John G. Kneiling once opined that the secondary lines with just enough traffic to cover expenses were the real money pits for the railroads. The branch with almost no traffic got almost no maintenance so the drain on resources was minimal. The example that he used was Penn Central's use of the Kankakee Belt as a Chicago bypass compared to the all-but-abandoned Joliet Branch. He felt that abandoning the Kankakee Belt and upgrading the Joliet Branch as a Chicago bypass made more sense since less trackage was involved and the Joliet Branch had better connections due to its proximity to Chicago.
Businesses in other industries will also bail out of markets which may be marginally profitable but not sufficiently so for the business overall.

[Anonymous]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by BNSF railfan.

If a Railroad requests to STB to have a Rail line Abandoned and the STB says no......Can that RR refuse to run their Trains on it even though the STB still says no to the Abandonment.
Thanks.

Railroads will file for abandonment on marginally profitable lines (or lines that have become a nuisance for some idiosycratic reason) once traffic levels have ostensibly shrunk to the point that the line in question is "obviously" no longer profitable. The trick of course is to find a way to eliminate as much traffic as possible a year or more prior to filing for abandonment to guarantee STB approval.

The usual scam is to either purposefully price service at a rate that is not competitive with truck rates and/or provide such dismal service that it forces the remaining customers to turn to other transport modes. Once traffic has disappeared or been severely reduced in carloads for a year or more, then the railroad files for abandonment under the guise of there being "no current traffic" or "current traffic does not support viability." Usually at that point the STB will grant the abandonment and the railroad is free to sell the rails for scrap to China. Such has happend to more than a few profitable lines over the last few decades.

If this process ever really happened, it hasn't been so for decades, at the very least since passage of the Staggers Act in 1980. Anything that is capable of making a profit nowadays is either kept or spun off to a short line or regional so the Class 1 can keep the traffic...

LC

[Anonymous]

QUOTE: Originally posted by BNSF railfan.

If a Railroad requests to STB to have a Rail line Abandoned and the STB says no......Can that RR refuse to run their Trains on it even though the STB still says no to the Abandonment.
Thanks.

Railroads will file for abandonment on marginally profitable lines (or lines that have become a nuisance for some idiosycratic reason) once traffic levels have ostensibly shrunk to the point that the line in question is "obviously" no longer profitable. The trick of course is to find a way to eliminate as much traffic as possible a year or more prior to filing for abandonment to guarantee STB approval.

The usual scam is to either purposefully price service at a rate that is not competitive with truck rates and/or provide such dismal service that it forces the remaining customers to turn to other transport modes. Once traffic has disappeared or been severely reduced in carloads for a year or more, then the railroad files for abandonment under the guise of there being "no current traffic" or "current traffic does not support viability." Usually at that point the STB will grant the abandonment and the railroad is free to sell the rails for scrap to China. Such has happend to more than a few profitable lines over the last few decades.

[Anonymous]

QUOTE: Originally posted by BNSF railfan.

If a Railroad requests to STB to have a Rail line Abandoned and the STB says no......Can that RR refuse to run their Trains on it even though the STB still says no to the Abandonment.
Thanks.

Wow. I don't know how to begin to answer this. I think your best bet is to read your own question and draw the obvious conclusion...

LC

[ericsp]

Before any experts answer, let me take a guess and say "no". That sounds like abandonment in practice.

[Anonymous]

If a Railroad requests to STB to have a Rail line Abandoned and the STB says no......Can that RR refuse to run their Trains on it even though the STB still says no to the Abandonment.
Thanks.