The trackage rights agreements I have seen run the gamut with respect to compensation. It's really hard to generalize. The more modern agreements seem to be based more on train miles rather than car miles, particularly between Class I roads. But there are many agreements (particularly older ones) where the trackage rights charges have both a fixed "rental" component and a variable "usage" component. Another complicating factor is that, although an individual trackage rights agreement may look like a stand alone deal, it is often part of a larger reciprocal deal (in the grand railroad tradition of doing unto other railroads what they do unto you). In other words, the "big deal" is that Railroad A agrees to grant Railroad B trackage rights in Illinois, and Railroad B agrees to a reciprocal grant of trackage rights to Railroad A in Iowa. In this case, the compensation terms of both agreements are likely to be similar.
Trackage rights require an STB filing (these days, usually be a notice of exemption). The agreements have to be part of the filing, so they are available on the STB website. You can usually tell from the website posstings how the trackage rights payments are structured. But the actual dollar amounts are often redacted as confidential.
The complicated court opinion (12 pages) linked below from 2006 about a dispute over a proposed trackage rights fee seems to state that the rates in dispute ranged from about 3.2 to 9.05 "mills" (1 mill = 1/1000 dollar = 0.1 cent) per Gross Ton Mile; thus, for a 100-ton gross weight car, it would be from $0.32 to $0.905 per car-mile:
https://www.cadc.uscourts.gov/internet/opinions.nsf/6A8E1ABE515776FA852574400044F47E/$file/05-1136a.pdf (Arizona Electric Power Coop. vs. STB, BNSF, and UP)
Here's a link to a recent (June 2015) "Preliminary Version" of an academic economics paper about "Optimal Pricing of Trackage Rights" (26 pages):
http://www.gcbpp.org/files/Railroad/BoyerPaper.pdf
Abstract
"In anticipation of vertical disintegration or increased tenancy in the US railroad industry, this paper develops optimal pricing rules for track usage. The concept of congestion tolls imported from the road pricing literature is one element of track pricing. These pricing rules are designed to optimize usage of existing tracks. However, track pricing should also be designed to induce the correct level of capacity on any link, the optimal location decisions for a potential shipper, optimal origin and destination choice for a shipper/receiver, and the optimal abandonment and investment decisions for new lines not currently in existence. This paper introduces the idea of track districts for individual track segments as a device for the implementation of optimal pricing of trackage rights."
Good luck with reading and understanding that one !
- Paul North.
See the rates mentioned and comments in this short thread from 2006:
"Trackage rights and how RR's pay?" at -
http://www.trainorders.com/discussion/read.php?2,1107511
CPRAILFAN PNWRMNM If you are dealing with a branch line spin-off, the seller will generally alow sufficient rights to enable interchange at a location of the sellers chosing. That may or may not involve some main line trackage rights. But in this case, the purchaser will still have to pay a fee to use those rights, correct? I know this is kinda an oversimplified question, but does anybody have an idea as to what the average rate for trackage rights is?
PNWRMNM If you are dealing with a branch line spin-off, the seller will generally alow sufficient rights to enable interchange at a location of the sellers chosing. That may or may not involve some main line trackage rights.
If you are dealing with a branch line spin-off, the seller will generally alow sufficient rights to enable interchange at a location of the sellers chosing. That may or may not involve some main line trackage rights.
But in this case, the purchaser will still have to pay a fee to use those rights, correct? I know this is kinda an oversimplified question, but does anybody have an idea as to what the average rate for trackage rights is?
As to part one, generally not. The seller wants to pay as low a per car switch fee as possible, and neither side wants to spend the money to do the accounting.
As to part two, there are all kinds of ways to figure fees but I know of one a few years ago that was about 40 cents per car mile.
Mac
Generally the fee is the cost of maintaining the trackage based on the amount of usage by the guest, along with Dispatching costs, taxes, etc.
thanks
A further note on the IC's entrance into Birmingham. When I first studied a Southern Birmingham Division ETT, I was a bit surprised to see that ATS was in use on the Haleyville-Jasper segment (the Southern, unlike some other roads, listed the segments that had ATS), for the Southern had no passenger trains on that part--and then I realized that it was because of the IC trains that used that segment of track. The rest of the line between Birmingham and Sheffield was dark territory. I wonder what the Southern charged the IC to install ATS there.
Johnny
Paul_D_North_Jr Back in the late 1970's - early 1980's, Amtrak raised the trackage rights fee for ConRail trains on the NorthEast Corridor to astronomical levels - like 6 times the previous rate, IIRC. The purposes of that were to: A) an incentive to get as many freight trains off the NEC as possible; and, B) compensate Amtrak for the greater wear-and-tear on those sensitive high-speed tracks that the ponderous freight trains caused. - Paul North.
Back in the late 1970's - early 1980's, Amtrak raised the trackage rights fee for ConRail trains on the NorthEast Corridor to astronomical levels - like 6 times the previous rate, IIRC. The purposes of that were to: A) an incentive to get as many freight trains off the NEC as possible; and, B) compensate Amtrak for the greater wear-and-tear on those sensitive high-speed tracks that the ponderous freight trains caused.
Which put most of CR's Philadelphia-Pot Yard Traffic on the B&O between those two point.
Subsequently the D&H's trackage rights to the South were exercised from Philadelphia to Seminary, VA (Alexandria) on CSX and further South on NS
Never too old to have a happy childhood!
Another excellent article is "When (and where and why) railroads share track", by Jerry Pinkepank in the January 1979 TRAINS. It covers all sorts of arrangements such as trackage rights, detours, joint subsidiaries, etc.
Back in the days when railroads were expanding, often a road would obtain trackage rights over others to reach new territory, as the IC did when it gained access to Birmingham, Alabama--trackage rights over the then M&O from just below Jackson, Tenn., to just above Corinth, Miss., new construction from there to Haleyville, Ala., trackage rights over the Northern Alabama (Southern) to Jasper, and trackage rights over the Frisco into Birmingham.
One of the oldest agreements was the Memphis and Charleston's rights over the Nashville and Chattanooga from Wauhatchie, Tenn., to Stevenson, Ala., thus making a Chattanooga-Memphis route possible--and these rights are still exercised as the NS exercises them over the CSX.
See also this article under the "ABC's of Railroading" section here, written by an expert:
"Trackage and Haulage Rights - How Railroads Extend Their Reach" by Michael W. Blaszak, at:
http://trn.trains.com/railroads/abcs-of-railroading/2006/05/trackage-and-haulage-rights
The original article was in the Sept. 1994 issue, pg. 76 &etc.
AND after you negotiate the deal with the owning carrier, it has to be approved by the STB.
If you are contemplating operating over an existing carrier "just because you want to" anticipate no interest by that carrier. Yes you can ask the STB to force access, but will be slow, expensive, and likely to fail.
Thanks
The Mohawk, Adirondack and Northern serves several industries in Rome, NY from its Utica base of operations. CSX drops and picks up cars at Utica which MWHA then shuttles to/from Rome - via the CSX "Chicago Line."
I'm not privy to the arrangements that were made, but I suspect it's as much because CSX (and CR before them) didn't want to be bothered with servicing Rome as anything else.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Trackage rights also get created where one carrier desires to abandon a line segment, but still service customers at one or more locations that the carrier granting the rights also serves. All the actions discribed by deshusman will take place and a agreement will be signed before the rights are exercised.
CPRAILFAN In my plan, my hypothetical railroad will need to gain trackage rights or some from of trackage lease from one point of the railroad to the other. Can anyone inform me on how railroads initiate trackage rights, what certifications (if any) are needed, and how my railroad would pay the other, as well as how much? Any help is appreciated.
In my plan, my hypothetical railroad will need to gain trackage rights or some from of trackage lease from one point of the railroad to the other. Can anyone inform me on how railroads initiate trackage rights, what certifications (if any) are needed, and how my railroad would pay the other, as well as how much? Any help is appreciated.
Your railroad (tenant) would have to approach the other road (host), contacting somebody in the service planning, VP Operations or joint facilities departments (depends on which railroad gave responsibility to which department) outlinging from where to where you want the trackage rights.
If the other railroad is willing (they don't have to grant you rights unless it is a condition of merger) you would enter into negotiations with the host to determine the conditions and fees.
Conditions could be how many trains in what period, what type of trains, how much power, how long of a train, etc. You would discuss liability for accidents, recrews, bad orders, out of fuel, etc. You would discuss payment, by train mile, by ton mile, by car count, gross tonnage, per train, etc. and what information the host will use to document the payment criteria. The two roads would agree on a dispatching protocol (what priority they give your trains). All of the above would be outlined in an interline service agreement. Nothing happens until that is in place.
Once the ISA is nailed down, you would have to arrange some way of getting warrants and bulletins for the host road to your crews. You would have to have a protocol to get the required train sheet information to the host road's dispatch office. You would have to train your crews on the host road's rules and arrange for pilots over the host road to qualify your crews.
Dave H. Painted side goes up. My website : wnbranch.com
Trackage rights, allowing railroad A to operate over railroad B as though it were there own railroad, usually happens as a result of a merger so as to maintain fair competition. As an example the Delaware & Hudson was granted all maner of rights to Buffalo, Philadelphia, Potomac Yard, et. al. as a way to counter the all encompasing ConRail.
Sometimes trackage rights are agreeed to by the railroads and are mutual: Norfolk Southern granted rights to Canadian Pacific between Detroit and Chicago and CP granted rights to NS between Harrisburg and Mechanicville, NY.
A railroad can request trackage rights via a petition with the Surface Transportation Board and the answer is almost always "NO."
Editor Emeritus, This Week at Amtrak
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