motard98 wrote:Anyone know of any short lines currently for sale?
If I knew of such I wouldn't post them here. Most short lines are acquired by existing short line operators. There are always some that are available, most aren't worth much. Those that are worthy are sought by a number of suitors and new players have difficulty entering the field. I hear of several each year as I do some consulting. Most larger RRs and consultants have lists of knowledgable operators interested in new lines and will go to those lists first before considering a new and unknown party.
LC
Gee, Limitedclear, can you be any more of a J-E-R-K??
Sometimes, it's easier NOT to reply to a thread.
OldArmy94 wrote:Gee, Limitedclear, can you be any more of a J-E-R-K??Sometimes, it's easier NOT to reply to a thread.
Uhhhh......what? I don't think LimitedClear said anything to deserve this kind of reaction......
EDIT: And why reserect a thread from 16 days ago?
OldArmy94 wrote: Gee, Limitedclear, can you be any more of a J-E-R-K??Sometimes, it's easier NOT to reply to a thread.
Perhaps, I should just have thrown a party and we could join hands and sing songs. So sorry to have hurt your feelings. Sometimes reality sucks, but it is still reality. Besides, I don't see that you have added anything of value to this thread.
I could have been like other participants and posted half truths or perhaps offered to consult for a small fee. None of those things would change anything either. Better for potential participants in the field to know what they are getting themselves into. Right now is possibly the worst time to get into the short line industry since the Staggers Act of 1980. Despite all the rosy press about how well railroads are doing, the short lines are about to get squeezed even harder, both by government regulation and between their Class 1 "partners" and customers in a fight for that last dime of profits. Yet those outside the industry see only how railroads are the investment of the future or want to run their own train and paint it bright colors and hope to enter this field.
Consider the following:
1. The Class 1s have stopped virtually all spin offs.
2. Several Class 1s have bought back short lines including CN, UP, CSX (through subsidiaries) and BNSF has indicated it will consider same.
3. Most recent deals have been leases allowing Class 1s to retake the property when it suits them.
4. Short Line formations have been dropping for 5 years.
5. Short Line abandonments are growing as margins shrink.
6. Customers are pushing new regulation of paper barriers which is discouraging spin offs.
7. Car fleets used in bulk shipments are aging and are not being replaced.
8. The building industry, a major carload customer, is in dire straights.
9. With the exception of a few states, governments have not made any real investments in railroad infrastructure in 10 years.
10. FRA is tightening regulation on short line infrastructure particularly bridges and track standards without providing any funding for repairs.
There are other reasons as well, but these hit most of the current hot buttons.
For those who would go this route, caveat emptor.
If you disagree with Limited Clear on something, there's nothing stopping you from asking or commenting in a civil manner. Perhaps, you'd get a civil, straightforward response-like the one he wrote above.
Thanks to Chris / CopCarSS for my avatar.
Ulrich wrote:But then again...I've been told "it can't be done (by you)" and I went ahead and did it many times. If you want to buy a shortline then go ahead...put a plan together and do it. The folks who say it can't be done are right...THEY can't do it...
There are still ways to get a short line, but it is getting a LOT more difficult as I pointed out in the other thread. If you are of a mind get your business plans together and finances and start looking. Don't count on getting a shot from the Class 1s, but there are other places. Who knows, with time and a lot of cash and elbow grease you too can learn how to make a small fortune in the railroad business...
Limitedclear wrote: 3. Most recent deals have been leases allowing Class 1s to retake the property when it suits them.
Limitedclear wrote: Ulrich wrote:But then again...I've been told "it can't be done (by you)" and I went ahead and did it many times. If you want to buy a shortline then go ahead...put a plan together and do it. The folks who say it can't be done are right...THEY can't do it...There are still ways to get a short line, but it is getting a LOT more difficult as I pointed out in the other thread. If you are of a mind get your business plans together and finances and start looking. Don't count on getting a shot from the Class 1s, but there are other places. Who knows, with time and a lot of cash and elbow grease you too can learn how to make a small fortune in the railroad business...
...start with a LARGE one...
lc
Murphy Siding wrote: Limitedclear wrote: 3. Most recent deals have been leases allowing Class 1s to retake the property when it suits them. What incentive would there be, for an operator to sign up for that deal?
There are a number. Most leases are fairly long term and require no $$$ down for starters. Of course you'll need to be pre-qualified and have other existing operations and the necessary equipment and back up for a start-up.
Limitedclear wrote: Murphy Siding wrote: Limitedclear wrote: 3. Most recent deals have been leases allowing Class 1s to retake the property when it suits them. What incentive would there be, for an operator to sign up for that deal?There are a number. Most leases are fairly long term and require no $$$ down for starters. Of course you'll need to be pre-qualified and have other existing operations and the necessary equipment and back up for a start-up.LC
Murphy Siding wrote: Limitedclear wrote: Murphy Siding wrote: Limitedclear wrote: 3. Most recent deals have been leases allowing Class 1s to retake the property when it suits them. What incentive would there be, for an operator to sign up for that deal?There are a number. Most leases are fairly long term and require no $$$ down for starters. Of course you'll need to be pre-qualified and have other existing operations and the necessary equipment and back up for a start-up.LCOK. I took it to mean that the Class 1 would set up the lease to take it back just whenever they wanted to. This, however, sounds like there are ooportunities for those with the equipment and know how.
There were. The recent Michigan Central decision by the STB has pretty much put a stop to these deals.
Limitedclear wrote: 1. The Class 1s have stopped virtually all spin offs. 2. Several Class 1s have bought back short lines including CN, UP, CSX (through subsidiaries) and BNSF has indicated it will consider same.6. Customers are pushing new regulation of paper barriers which is discouraging spin offs.8. The building industry, a major carload customer, is in dire straights.LC
1. Why have Class 1s have stopped virtually all spin offs? Wouldn't the same reasons for doing them apply today, as they did 10, 15, 20 years ago?
2. Why would a class 1 want to buy back a short line? (Buying the cow, when the milk's free.)
6. Paper barriers: I know they are used to make sure a spin off is being nice to it's class 1 ancestor, but is there more involved than that?
8. The building industry is a very cyclic business. What happens when all that traffic comes back?
Thanks
Interesting and informative topic after the initial name calling.
I would think it would be difficult to finance such an operation right now. Credit markets have really dried up.
Like Murphy, it would be interesting to know the factors driving some of these movements.
thanks,
ed
I'll take your questions in order.
1. No, sadly, they don't still apply. Class 1s have become more efficient, shrinking crews and maintenance forces and other expenses and thus narrowing the gap between Class 1 operating and maintenance expenses and those of short lines. Many of the most suitable branch lines for short lining have long been sold or leased and most of the remaining network are core lines which Class 1s can justify keeping. Also, abandonment procedures have been simplified so that many abandonments can be accomplished in a shorter, less expensive time frame, making abandonment a more viable option for lines that are real basket cases.
2. Various reasons. Usually it needs the route to balance or enhance its system. For example, IC repurchased the CC&P to get the grain traffic back while UP reacquire a Rail America line in the midwest to facilitate directional running of coal trains returning to the Powder River Basin.
6. Paper Barriers, known in the industry as "Interchange Commitments" are generally contained in clauses of the acquisition or lease agreement. An interchange commitment can take several forms usually assuring the selling Class 1 of maintaining the long haul of the traffic existing when the line is sold or leased to the short line.
8. Whomever has the railroad will move the traffic. If the line has been abandoned it will be trucked.
Hopefully, that gives you some ideas. Of course it is more complicated and there are several other reasons depending upon the individual Class 1s and the branch lines involved.
LC's got it right on all points.
Look for additional short lines to be bought back or leases bought out, and spinoffs to be limited to lines beyond hope.
There is potential that the federal government will pass legislation altering the terms under which Class Is sold or leased trackage to short-line railways, piercing paper barriers as well as forcing a Class I to offer trackage-rights over themselves to enable short lines to reach another Class I. While from one perspective this will result in improved service and rates to certain shippers and no net harm to railways, from another perspective it will cause severe economic harm to certain shippers and significant net harm to railways.
You can pick whichever point of view suits your political fancies and worldview.
RWM
Railway Man wrote:LC's got it right on all points.Look for additional short lines to be bought back or leases bought out, and spinoffs to be limited to lines beyond hope. There is potential that the federal government will pass legislation altering the terms under which Class Is sold or leased trackage to short-line railways, piercing paper barriers as well as forcing a Class I to offer trackage-rights over themselves to enable short lines to reach another Class I. While from one perspective this will result in improved service and rates to certain shippers and no net harm to railways, from another perspective it will cause severe economic harm to certain shippers and significant net harm to railways. You can pick whichever point of view suits your political fancies and worldview.RWM
at the risk of this thread being hijacked by OA advocates, do you think the feds would also force Class I's to offer trackage rights over themselves to enable short lines to reach customers which the Class I's dont want to serve economically?
That would be one small step away, wouldn't it?
A better way to phrase the question is, "customers located on a Class I that want to gain access to another Class I." The term "economical service" is in the eye of the beholder.
The fundamental value of a railway is its franchise. The federal government created the franchise and can thus can at its discretion take away the franchise, or do whatever with the terms and conditions it wishes. By so doing some people's interests are preserved, some are enhanced, and some are gored. The public's interest is not easily defined or quantified.
Railway Man wrote: LC's got it right on all points.Look for additional short lines to be bought back or leases bought out, and spinoffs to be limited to lines beyond hope. There is potential that the federal government will pass legislation altering the terms under which Class Is sold or leased trackage to short-line railways, piercing paper barriers as well as forcing a Class I to offer trackage-rights over themselves to enable short lines to reach another Class I. While from one perspective this will result in improved service and rates to certain shippers and no net harm to railways, from another perspective it will cause severe economic harm to certain shippers and significant net harm to railways. You can pick whichever point of view suits your political fancies and worldview.RWM
The prospect of such legislation is becoming more limited. Although there is certainly a push on by CURE and other shipper advocates and there may be some reregulation coming the sort of wholesale abrogation of the franchise suggested above is very unlikely. Any such move by the government would result in an immediate halt to all private investment in rail infrastructure. In a time where Congress is just beginning to awaken to our infrastructure and transportation crisis it is unlikely that they will want to create another huge infrastructure problem requiring a government bailout.
Also, short lines are much more likely to fail in any so called "open access" type scenario resulting in further damage to our economy, particularly in rural areas. Congressional representatives and staff I have spoken with within the past week have indicated that they are well aware of the negatives of reregulation and the countervailing pressures of investors including hedge funds such as the Children's Investment Fund that are being exerted upon railroad managements.
I agree, but in the meantime I really don't think the Class Is are going to do anything to increase their risk by creating more short lines, at least in any significant way.
Railway Man wrote: I agree, but in the meantime I really don't think the Class Is are going to do anything to increase their risk by creating more short lines, at least in any significant way. RWM
I agree they won't want to take risks, but I tihnk that economics also has a lot to do with it. The finances are close enough so Class 1s really can't make enough in a spin off to make it worthwhile and now that the STB ha shot down profit sharing ideas such as the Michigan Central proposal it just won't happen. The unions who were run out of the short line process for about the lat decade are making a strong effort to get their nose back under the tent with help from their friends in the new Democratic Congress. As long as unions drive the bus you can kiss entpreneurial efforts like short lining goodbye.
Limitedclear wrote:I agree they won't want to take risks, but I tihnk that economics also has a lot to do with it. The finances are close enough so Class 1s really can't make enough in a spin off to make it worthwhile and now that the STB has shot down profit sharing ideas such as the Michigan Central proposal it just won't happen.
I agree they won't want to take risks, but I tihnk that economics also has a lot to do with it. The finances are close enough so Class 1s really can't make enough in a spin off to make it worthwhile and now that the STB has shot down profit sharing ideas such as the Michigan Central proposal it just won't happen.
No argument from me there.
I'm interested in your thoughts on why the NS-Watco MC proposal failed.
Railway Man wrote: Limitedclear wrote: I agree they won't want to take risks, but I tihnk that economics also has a lot to do with it. The finances are close enough so Class 1s really can't make enough in a spin off to make it worthwhile and now that the STB has shot down profit sharing ideas such as the Michigan Central proposal it just won't happen. No argument from me there. I'm interested in your thoughts on why the NS-Watco MC proposal failed. RWM
Limitedclear wrote: I agree they won't want to take risks, but I tihnk that economics also has a lot to do with it. The finances are close enough so Class 1s really can't make enough in a spin off to make it worthwhile and now that the STB has shot down profit sharing ideas such as the Michigan Central proposal it just won't happen.
Sorry, but this isn't something I'm prepared to discuss in this forum. I know far too many of the folks involved and a fair amount of information that isn't public which forms the basis of my opinion on this particular deal. I think you can extrapolate the general direction of my opinion from my prior remarks.
This old thread answered some curiosity on my behalf. I suppose like a boat, one of the two "happiest days in your life", would be the day you acquire a short line railroad. The other would be the day you sold it....
BNSF leased out what became the MRL. Now they are taking it back so they will have a shorter route to the pacific northwest.
caldreamer BNSF leased out what became the MRL. Now they are taking it back so they will have a shorter route to the pacific northwest.
CSSHEGEWISCH caldreamer BNSF leased out what became the MRL. Now they are taking it back so they will have a shorter route to the pacific northwest. Same thing happened with IC's Iowa line.
One area of interest I have, is the future for the line via Tennessee Pass, in Colorado. It would seem to be a valuable asset, currently; in a semi-dormant phase. Commercially valuable. BUT, recently, [it is, or has been] a 'target' for several varying types of political, and or commercial entities (?); who seem to want it 'gone', OR each for its own agenda.. Anyone provide any new News there?
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