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Why did Iowa Pacific go bankrupt?

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Why did Iowa Pacific go bankrupt?
Posted by roundstick3@gmail.com on Thursday, June 23, 2022 7:53 AM

After all Ed Ellis was the Mark Zuckerburg of the short line railroad industry. He waa a guest columnist in several railroad publications including this one. His ideas for improving the railroad costumer experance both freight and passenger seemed solid. I guess this is why they don't let railfans run railroads.

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Posted by tree68 on Thursday, June 23, 2022 3:18 PM

To use a phrase comonly applied to eating - his eyes were bigger than his stomach.

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Posted by MidlandMike on Thursday, June 23, 2022 7:11 PM

He pushed the envelope, especially in passenger rail.  The money he made in freight rail could not support the passenger losses.  He failed like all dozen or so US private rail operations since the Amtrak Era.

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Posted by charlie hebdo on Thursday, June 23, 2022 7:21 PM

And therein lies a lesson or two to be learned about passenger services. 

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Posted by mudchicken on Thursday, June 23, 2022 11:40 PM

.... among other things was the shell game with OPM. Iowa Pacific/Permian basin got called on it and couldn't deliver.

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Posted by chutton01 on Friday, June 24, 2022 10:56 AM

Heh, most of the old Iowa Pacific Holding website is still up, having (mostly) operational links to the invidual railroad pages (the main page no longer seems to have those links, so I linked to the Chicago Terminal one).
OK, those former Iowa Pacific railroads are now scattered, but what could it have been done different (pick your point of departure - e.g. 2002 or so on) such that  going forward they would have become by today, well...clearly not the next Genesee & Wyoming, but a reasonably prosperous and somewhat sizable railroad holding company.

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Posted by CMStPnP on Friday, June 24, 2022 5:08 PM

MidlandMike
He pushed the envelope, especially in passenger rail.  The money he made in freight rail could not support the passenger losses.  He failed like all dozen or so US private rail operations since the Amtrak Era.

I read an article in RA on this or commentary on another railway board.   Minus the passenger rail he would have been in trouble as well.    He had maybe in his portfolio of short lines one or two strong ones, the rest were not really break even.   I believe he sold his strongest short line off to finance the passenger rail business and by doing so......pulled the rug out from under both his weak short lines and the future ability to support the rail passenger business after the sale proceeds (gain on investment) ran out from the first short line sale.

That was the argument made.

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Posted by tree68 on Friday, June 24, 2022 7:28 PM

The problem with passenger/tourist rail is that it often isn't where the people are.  Cast off branches in the middle of nowhere that often involve hours of travel to reach.  And often without any accompanying attractions to help draw people in.

A few lines have managed to survive, and even thrive, under those circumstances.  Usually they have some specific draw (steam) that ropes people in.

OTOH, well-planned commercial passenger service oftimes exceeds expectations.

LarryWhistling
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Posted by MidlandMike on Friday, June 24, 2022 9:17 PM

He had scenic tourists trains and the LD nostalgia CHI-NOLA train, but I think the big disappointment was the CHI-IND Hoosier that he partnered with Amtrak.  Unfortunately ATK unilaterally took off the top what they thought they needed, which didn't leave IP enough to make a go of it.

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Posted by CMStPnP on Friday, June 24, 2022 9:44 PM

tree68
The problem with passenger/tourist rail is that it often isn't where the people are.  Cast off branches in the middle of nowhere that often involve hours of travel to reach.  And often without any accompanying attractions to help draw people in. A few lines have managed to survive, and even thrive, under those circumstances.  Usually they have some specific draw (steam) that ropes people in. OTOH, well-planned commercial passenger service oftimes exceeds expectations.

The Grapevine Steam Train just North of DFW Airport has thrived here in Dallas.   The scenery totally sucks (unless your a railfan).     The destination of Stockyards station in Fort Worth is so-so (it is a shopping and entertainment complex now).   They rope in a lot of people and seem to be as profitable as the Grand Canyon railway as now they are building a large resort next to the Grapevine Steam Train and the Hotel Vin is made to look like a large train station outside and via the lobby...........    https://www.hotelvin.com/

 They also had the good luck of the Fort Worth T transit system buying all their track out from under them and upgrading it to run TEXRAIL to the Airport from Fort Worth.     So now they have a newly redone main and signaling to boot.

 

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