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Did Conrail have a monopoly on PA, NY, & NJ?

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Did Conrail have a monopoly on PA, NY, & NJ?
Posted by Murphy Siding on Sunday, April 22, 2012 3:50 PM

      After Conrail was formed, did that cut off every other railroad from that corner of the US?

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Posted by henry6 on Sunday, April 22, 2012 4:19 PM

Yes and no.  They owned the track but had to give D&H trackage rights into Philadelphia and Oak Island, NJ from  Wilkes Barre via Allentown; also D&H got tracakge rights to Harrisburg from Wilkes Barre and from BInghamton to Buffalo over the former EL tracaks.  D&H also bridged from Binghamton to Mechanicsville to the B&M (later, D&H acquired by Guilford/B&M).

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Posted by MerrilyWeRollAlong on Sunday, April 22, 2012 5:53 PM

Yes it was a monopoly as any other player could not effectively compete, especially in North Jersey/New York City.  And considering that the fact that this was a "government bailout", there might have been desire to give Conrail a monopoly in order get the railroad  industry in the Northeast back on its feet much quicker.  Instead of spending time trying to figure out to create "fair" and "competitive" ways to fix the bankrupt railroads, it might have been just easier to takeover operations and then rationalize/fix the system as they went along.

When henry6 has pointed out that the D&H was given some trackage rights, they were not competitive.  Between Albany and Oak Point in New Jersey, Conrail had the easy direct route down the Hudson while CP trackage rights forced it to circle out to Binghamtom and Allentown over the mountains.  Same between Buffalo and North Jersey.  And when CP arrived in Oak Island, Allentown, and Philadelphia, really didn't have any facilities or exclusive traffic base to pool from.  At the same places, the only major railroad they could interchange with was Conrail, the same railroad whose trackage they used to reach that location.

The only "semi-competitive" line into the New York market was New York Susquehanna & Western whose being in the Erie-family managed to stay out of the Conrail family.  By piece-mealing their original mainline with the Lehigh & Hudson and trackage rights to Binghamton, NYS&W put together an alternative intermodel route between North Jersey and Buffalo and the west. Although considered a success by regional rail standards, it could not effectively compete in the time-sensitive New York to Chicago market.

 

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Posted by henry6 on Sunday, April 22, 2012 6:37 PM

Be careful, remember your dates.  I based my answer on the question which I intrpreted to be what existed and Conrail Day One.  Guilford's purchase of the D&H changed things, the Guilford release of D&H into bankruptcy changed things, the Delaware Otsego System (NYS&W) designated operator changed things, CP purchase of D&H changed things, CSX entry to New York Harbor changed things, NS and CSX purchase of CR changed things.  D&H did in fact operate one train in and out of Oak Island daily at firs then dropped back to once a week.; similalry Allentown to Park Jct., Philadelphia was not continuous especially when D&H found Harrisburg/Enola was a better run for them.;  Heck, I'm just remembering the Philadelphia train was actually a Pot Yard interchange; but it did not last long and that's why Harrisburg turned out to be more satisfactory for D&H managers.  I suppose one could do an investigative report on the apparent failure of the D&H to do aggressive and pertinent marketing!

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Posted by CatFoodFlambe on Sunday, April 22, 2012 7:49 PM

Remember that both N&W and Chessie turned down the chance to enter the area around the time Conrail was created - under the conditions that existed at the time,   D&H entered into the fray simply because they had to in order to survive - and never had the capital resourcde to really exploit what little they had.   

Conrail had a effective monopoly because no one wanted into the market in the 1970's transportation climate.   Given that, you can't blame them for protecting it after the rules changed. 

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Posted by henry6 on Sunday, April 22, 2012 8:40 PM

ANd even then I don't believe CR really wanted the area.  In fact there was floating around a line thorugh NJ that showed no railroad could make any money east of basically Bound Brook, NJ from the west, Mayebrook, NY and east a similar distance above the harbor across NY state.

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Posted by Murphy Siding on Sunday, April 22, 2012 9:50 PM

henry6

................. In fact there was floating around a line thorugh NJ that showed no railroad could make any money east of basically Bound Brook, NJ from the west, Mayebrook, NY and east a similar distance above the harbor across NY state.

Why is that?

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Posted by Murphy Siding on Sunday, April 22, 2012 9:50 PM

henry6

................. In fact there was floating around a line thorugh NJ that showed no railroad could make any money east of basically Bound Brook, NJ from the west, Mayebrook, NY and east a similar distance above the harbor across NY state.

Why is that?

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Posted by MidlandMike on Sunday, April 22, 2012 10:10 PM

Also, CSX served Phily and Pittsburgh and other south Pa. cities.  N&W served Buffalo and provided an outlet to the D&H trackage rights and New England.  Additionally, P&LE backed out of PC.

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Posted by henry6 on Monday, April 23, 2012 8:19 AM

Murphy Siding

 henry6:

................. In fact there was floating around a line thorugh NJ that showed no railroad could make any money east of basically Bound Brook, NJ from the west, Mayebrook, NY and east a similar distance above the harbor across NY state.

 

Why is that?

Terminal and switching costs....The Port of NY was not a run through yard but terminating and make up point for trains...thus local crews and yard crews and road crews; lots and lots of tracks and yards; lots and lots of taxes.  The business model was to pick up a train and run it 500 to a thousand miles and hand it off.  Assembiling, taking apart, yarding, pick up, delivereing, per diem, people, all take up money; if a railroad doesn't have to bother with all that, then the money is good.  Similarly electric utilities have foisted that concept on us: cost of electricty minus delivery.  The cost of the product is seperated from the cost of delivery.  You can buy the product from whoever you want, but still the guy who owns the pole outside your house gets the delivery fee.  Railroads would like to operate terminal operations like that: deliver to the perimiter and let a terminal operation take it from there.  In fact, that is the idea behind Conrail Shared Assets Operations in NY, Philladlephia and Detroit, and the terminal roads in Chicago.

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Posted by oltmannd on Monday, April 23, 2012 9:35 AM

Effectively, yes.  The D&H had trackage rights into the area and NS ran intermodal traffic into the area over others' trackage rights, but this all amounted to a hill of beans.

Once Staggers was in place, Conrail "demarketed" a lot of what made the area a money loser, hanging onto the East-West Intermodal, finished vehicle and Chemical coast traffic that was lucrative - and that did not have an effective competitive rail route.  

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Posted by CSSHEGEWISCH on Monday, April 23, 2012 10:07 AM

Conrail wound up with a virtual rail monopoly in the Northeast after Chessie System and SR couldn't come to terms with labor and withdrew their participation.  The D&H trackage rights operations were granted to provide a fig leaf of competition in the area.

The daily commute is part of everyday life but I get two rides a day out of it. Paul
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Posted by Paul_D_North_Jr on Monday, April 23, 2012 10:48 AM

henry6
  ANd even then I don't believe CR really wanted the area.  In fact there was floating around a line thorugh NJ that showed no railroad could make any money east of basically Bound Brook, NJ from the west, Mayebrook, NY and east a similar distance above the harbor across NY state.

Back in the pre-ConRail United States Rail Association ("USRA") planning days, the 'firewall' was said to be everthing east of Harrsiburg, PA.  I don't recall anyone defining the northern and southern limits of that one, but Washington, D.C. and Buffalo, NY would have been logical. 

CSX had a pretty significant presence in the southern tier of Pennsylvania, as MidlandMike mentioned above.  From east to west, there was (and is) a significant yard in SouthWest Phila. in the Grays Ferry area, and the now-defunct Philadelphia Belt Line provided access along the Delaware River waterfront.  There was also a decent-sized transload on the north side of Chester right along I-95, and a huge auto terminal at Twin Oaks (northwest of Chester), as well as an industrial park there.  Further west was an ex-WM line in the Chambersburg-Geyttysburg-Carlisle Harrisburg area, and a branch line to Johnstown, as well as others in the southwestern corner's coal fields.  CSX also had a significant presence in the PIttsburgh area, including some lengthy branches - I did some work along one that ran north out of Butler, crossed the Allegheny River on a double-deck bridge, and then climbed the bluff with a switchback at Foxburg before heading further north, until it was abandoned circa 1982.  In the the northern and western portions of the state were also - at least for a few years - several 'regional' and switching or terminal railroads, some of which were written up or whose photos appeared in Trains from time to time, such as: the Allegheny & Eastern, the Buffalo, Rochester, and Pittsburgh, the Pittsburgh & Shawmut, the Bessemer & Lake Erie, the Wheeling & Lake Erie, the Pittsburgh & Lake Erie, the Montour, and a few others that I can't remember right now.        

- Paul North.          

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by MidlandMike on Monday, April 23, 2012 12:18 PM

Paul, I was thinking of BR&P as I was posting the note, but I could not remember if it was still part of B&O/C&O.  I should have remembered the B&LE, as I have railfanned it.

I think the NYC equivalent of Harrisburg is the Selkirk-Albany area where there is a large yard and the line splits for NY/Boston.

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Posted by MerrilyWeRollAlong on Monday, April 23, 2012 4:44 PM

I think the New York market became more attractive not necessarily because of Conrail but because the local transit agencies finally decided to jump completely into the commuter rail business (probably to the displeasure of small government-minded folks).  Prior to the 70's and 80's, states or regional authorities just gave the railroads a "commuter" subsidiary to just keep the trains running and left ownership and operations to the railroads .  Every now and then the government would "help" pay for new equipment.  Then at some point, there was a decision to just start owning the tracks, the trains and hire their own crews to runs the trains.  When New Jersey Transit and Metro-North (SEPTA too) owned their respective lines (with a few exceptions including the Northeast Corridor), it shifted the maintenance cost and most importantly the tax burden from Conrail to local transit agencies.  For Conrail, now they could just pay a trackage-right fee to use the commuter lines on an as-needed basis.  So instead of sinking capital into commuter rail lines that are being used almost exclusively by commuter trains, Conrail was able to focus on its 2 core mainlines: the River Line and the Lehigh Line... it's questionable whether the Conrail gave the ex-Reading line between Philly and Bound Brook much though since they preferred to interchange traffic to/from the southeast at Hagerstown in order to maximize the haulage.

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Posted by henry6 on Monday, April 23, 2012 4:59 PM

MNRR didn't make much of a difference because most freight was sent up the West Shore leaving the Hudson, Harlem, and Connecticuit Corridor open for passenger traffic.  Conrail really made North Jersey a run through terminal with less terminating and more transferring.

 

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Posted by oltmannd on Monday, April 23, 2012 5:12 PM

MerrilyWeRollAlong

I think the New York market became more attractive not necessarily because of Conrail but because the local transit agencies finally decided to jump completely into the commuter rail business (probably to the displeasure of small government-minded folks).  

They didn't jump.  They were PUSHED....by the Federal Gov't.  The legislation that went along with the Staggers Act forced the commuter business on the states.  Conrail was no longer required to be even a contract operator. 

There wasn't even a whisper of "small government" folks back then.  They didn't really exist.

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Posted by henry6 on Monday, April 23, 2012 6:48 PM

On the contrary, Oltmannd.  The State of New York had already owned and operated the LIRR for many years and was supporting PC/CR services north of the City and into CT.  EL, CNJ and PC had been supported by NJT with new equipment before CR.  Although they didn' jump in, nor were they pushed.  Planners and railroaders were more in front of things than many think, they knew the future and were perched to do more than write checks...the CR years was a time of orginization and planning so that when the day came, they were ready.  So much so that there were immediate improvements and plans for expansion of services.  Since PC, EL, CNJ were all common carriers under the thumb of the ICC, they couldn't "jump in'" and cofiscate nor would it have been easy to purchase anything.  Our government system and business system works in strange ways.

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