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Railroad Leasing

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Railroad Leasing
Posted by Anonymous on Friday, December 12, 2014 3:39 PM

Hi all. I have seen online that railroads sometimes lease out sections of track to shortlines. I just wanted to know how all that works. How much does the big railroad charge the little railroad? MRL is in a 60 year lease with the BNSF, but how much does the BNSF charge MRL? Is it a monthly, fixed rate, or like trackage rights and the big railroad charges per car-mile over the railroad line? Thanks!

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Posted by BaltACD on Friday, December 12, 2014 5:49 PM

Lease specifications are usually unique to the property being leased and the details of the lease are normally confidential between the parties involved.

Never too old to have a happy childhood!

              

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Posted by Anonymous on Friday, December 12, 2014 11:45 PM

Ok thanks!

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Posted by Paul_D_North_Jr on Saturday, December 13, 2014 9:21 AM

For MRL specifically, look up anything it or BNSF has filed with the Federal Surface Transportation Board (STB) and/ or Securities Exchange Commission (SEC) - might be a lengthy search, though.

Otherwise, for general info see this article here on "Trackage and Haulage Rights":

http://trn.trains.com/railroads/abcs-of-railroading/2006/05/trackage-and-haulage-rights 

There are also a few articles on this kind of thing in the older issues of Trains.

Also, see Roy Blanchard/ The Blanchard Company's webpage - http://www.rblanchard.com/ - esp. the "Shortline Benchmarks" spreadsheet at:

http://www.rblanchard.com/resources/texts/benchmarks.html 

which indicates that "Property Leases" are typically about 0.3% of Total Operating Revenues (line 32).

- Paul North. 

"This Fascinating Railroad Business" (title of 1943 book by Robert Selph Henry of the AAR)
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Posted by CSSHEGEWISCH on Saturday, December 13, 2014 10:10 AM

Leases were often used as a method of acquiring a railroad when a direct purchase or merger by exchange of stock was not feasible for a variety of reasons.  Examples include New York Central's very long term leases of the Big Four and Michigan Central, PRR's lease of the Pan Handle,  NKP's lease of W&LE, etc.

The daily commute is part of everyday life but I get two rides a day out of it. Paul

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