Trackage Rights

[gabe]

Hey everyone,

Well, I finally got a few minutes to get away from my work long enough to get back to the wonderful world of Trains as well as all of the people I have enjoyed chatting with on here.

Between my job and my befuddlement and horor that is New Orleans, I had a railroad question about trackage rights.

How do they work? I think Indianapolis is a good example of them. Norfolk Southern does not have tracks in Indy and CSX is Indy's lone Class 1 rail provider. Yet, I am told that NS has trackage rights over CSX from the west and the East (in four years, I have seen one NS train).

How does NS, get business from Indy? Can they contract with companies that have CSX spurs on them? Does NS send a local to gather up enough cars to make a train load?

I know this has an obvious answer and shows my lack of rail knowledge. But, I would appreciate your help in allowing me to figure out how railroads collect freight revenue when they only have trackage rights and do not actually physically serve any of the factories located in a city.

I hope this post finds everyone well and I miss most everyone.

Gabe

[dharmon]

Gabe....I probably done't have the answer that you're looking for...but I missed you brother.....

Dan

[gabe]

QUOTE: Originally posted by dharmon

Gabe....I probably done't have the answer that you're looking for...but I missed you brother.....

Dan

Thanks Dan

Gabe

P.S. I really liked your evaluation of the New Orleans situation.

[bobwilcox]

QUOTE: Originally posted by gabe

Hey everyone,

Well, I finally got a few minutes to get away from my work long enough to get back to the wonderful world of Trains as well as all of the people I have enjoyed chatting with on here.

Between my job and my befuddlement and horor that is New Orleans, I had a railroad question about trackage rights.

How do they work? I think Indianapolis is a good example of them. Norfolk Southern does not have tracks in Indy and CSX is Indy's lone Class 1 rail provider. Yet, I am told that NS has trackage rights over CSX from the west and the East (in four years, I have seen one NS train).

How does NS, get business from Indy? Can they contract with companies that have CSX spurs on them? Does NS send a local to gather up enough cars to make a train load?

I know this has an obvious answer and shows my lack of rail knowledge. But, I would appreciate your help in allowing me to figure out how railroads collect freight revenue when they only have trackage rights and do not actually physically serve any of the factories located in a city.

I hope this post finds everyone well and I miss most everyone.

Gabe

Let me start off with some broad generalizations at what I would guess is going on in Indianapolis.

I can think of two possible scenarios off the top of my head. There may well be other scenarios out there.

Senerio One : At one time a forerunner of NS had a line into Indanapolis where they served industries on their railroad. Also, in an old town like Indianapolis, they reached industries on competing railroads with reciprocal switching. In turn they gave their competitors access to their industries via a switch. That's why it is called reciprocal switching. In the 1880s it was a way to avoid a lot of duplicate trackage being built all over town. Anyway, time passes and the NS line into Indianapolis can not generate the business needed out in the country to keep it open but the NS want to serve the customers in Indianapolis. One option is for NS to go to CSXT a say we will pay you a rental fee to use your line into Indianapolis and abandon our own line. CSXT would be willing to do this for the rent and/or they could get something else from NS somewhere else.

Scenerio Two: CR is being split up and the rail customers in Indianapolis want rail service by the two Class I railroads. They tell CSXT and CR that without this access they will fight the CR split at the STB. The two railroads cave in and agree to let NS have access via trackage rights.

Generally with trackage rights the tennant railroad does not have the right to serve any the industries on the line the operate over. However, especially with concern about competitive access in the last ten years, the are many exceptions to this generalization.

On the revenue side lets suppose a customer on CSXT in Indianapolis can be reached by NS via switch and they want to ship a car of stuff to Atlanta via NS. They would cut a bill of lading with NS to move a car of stuff from Indianapolis to Atlanta routed NS. NS would move the car and send the customer a freight bill and the customer would pay NS. CSXT would not be involved in this part of the transaction and probably would not know the rate NS charged the customer. Of course CSXT needs to pay for the swithcing service they performed for the NS. The would bill the NS the contract switching charge they had negotiated with NS on a system wide setup. These charges run about $300 per car and NS and CSXT have probably agreed to the same per car charge on virtually all to the loose car traffic they switch with each other. The actual accounting works on a net basis. Every month their banker takes all of the swithcing bills between both railroads and see if one of the railroads bought more switching than the sold and sends a bill on the balance. If last month CSXT switched 1,000 cars for NS and NS switched 990 cars for CSXT, CSXT would be owed for a net of 10 cars or $3,000 (10x300). The shipper in Indianapolis would not be a part of this transaction and the switching charges are private information between CSXT and NS.

I hope this answers some of your questions.

[Anonymous]

Gabe, I don't have the answer either, but it's nice to have someone with intelligence to have a battle of wits with back on the forums. Far to much flaming and namecalling going on. We are all very frustrated with the situation in NO and the general state of the world economy, but it's so hard to have a decent conversation and state one's opinion without everyone turning on you like a pack of hyenas.
Hopefully, one of the older knowledgeable ones will know the answer to your question.
Willy

[Anonymous]

Oh no, he's baaaaaaccccckkkk![:O]

I missed your debating skills. But didn't you know you were replaced by Murphy Siding as the best topic starter? Is this forum big enough for two top topic starters?

Oh, the topci question. I have no opinion at this time. Bob Wilcox covers it pretty well.

[Murphy Siding]

QUOTE: Originally posted by futuremodal

Oh no, he's baaaaaaccccckkkk![:O]

I missed your debating skills. But didn't you know you were replaced by Murphy Siding as the best topic starter? Is this forum big enough for two top topic starters?

Oh, the topci question. I have no opinion at this time. Bob Wilcox covers it pretty well.

[:I] Maybe Gabe and I are the same person?[}:)].

You have no opinion? Have you seen a doctor?[:0]

[nanaimo73]

I knew you two were the same person.[;)]

A lot of the trackage rights deals we have in place now have originated with the mergers we have had. Usually if two companies serve a customer and merge, another company will be granted trackage rights to maintain competion for that customer.

[gabe]

Unfortunately,

I will not be able to be on here enough to compete with MS for the best topic starter title, so I will leave you in his capable hands. I just have a little bit more time than normal because of the holiday.

Also, as far as Indy is concerned, NS did have a line into town, but it didn't serve that many industries. As far as I know there is not a single siding in Indy that is served by NS. Hence my befudalment.

Gabe

P.S. As far as all the flaming is concerned, I suspect you will all see less of it once school is back in session.

[nanaimo73]

Gabe
The September issue of Railfan and Railroad should still be available in some of Indy's hobby shops. It has an 8 page article on the Indiana Rail Road. The map shows they have the former NS (NKP) line into your city that came through Kokomo.

[gabe]

QUOTE: Originally posted by nanaimo73

Gabe-
The September issue of Railfan and Railroad should still be available in some of Indy's hobby shops. It has an 8 page article on the Indiana Rail Road. The map shows they have the former NS (NKP) line into your city that came through Kokomo.

Naniamo,

That map is no longer current. The line is currently run by the Indiana Transportation Museum. The Indiana Railroad once used the line to deliver coal to a power plant roughly 30 miles north of Indianapolis. However, the power company switched to Natural Gas, and the Indiana Railroad no longer uses it.

Also, the line is "cut off" just south of the diamond in Tipton Indiana, which is about 20 miles south of Kokomo.

Several Years ago, this was NS' artery into Indy. Sadly, no more.

Gabe

[ValleyX]

Although NS operates a local five or six days a week into Indianapolis via the Marion Branch to Anderson and then the Indianapolis (CSX) Line on into Indy, the local strictly interchanges at Hawthorne Yard and does no industry work. IIRC, NS does have the right to service certain industries in Indianapolis because of the reasons stated above (two Class 1's) but does not do so. The trackage rights had nothing to do with the abandonment of the IMC, the old NS route into Indy, and everything to do with the splitting up of Conrail.

[nanaimo73]

Perhaps the trackage rights NS received into Indianapolis were designed to make the Conrail split more palatable to customers and ensure quicker passage by the STB, rather than insuring NS a healthy share of the traffic.
CSX can serve customers there at a lower rate than NS and make a profit. Perhaps NS feel they can use their resources better somewhere else.
Is this covered in the October Trains ?

[CSSHEGEWISCH]

Trackage rights also come up for a variety of other reasons. The South Shore Line operates on 14 miles of trackage rights over the Illinois Central from Kensington (115th Street) to Randolph Street. It came about as a logical follow-up to IC-South Shore through coach service between Gary and Chicago, South Shore trains were then terminating at 115th Street.

BRC's owner roads have trackage rights over BRC as a privilege of ownership. This is not an uncommon arrangement for joint terminal subsidiaries such as BRC, TRRA and others. Non-owner roads (such as Wisconsin & Southern) may also be granted rights to a specific location (such as Clearing).

[MP173]

Bob:

As always, thanks for your great explanation.

Let me ask you a question. In my hours of reading railroad tariffs (what a life I have!) I often come up with a phrase such as "carrier x will absorb switching charges."

Can you explain that please.

Is there a charge for switching cars into an industry?

Is there a charge when cars are interchanged?

I certainly appreciate your explanations.

ed

[MP173]

Oh, where is Hawthorne Yard in Indy?

Which old line was it on?

ed

[nanaimo73]

Ed-
Hawthorne yard is just southeast of downtown.
http://maps.google.com/maps?ll=39.755241,-86.085949&spn=0.019871,0.039546
It was Conrail, and Penn Central, but I don't know if it was NYC or Indianapolis Union before that.

[chad thomas]

Hey Gabe,
Glad you havn't forgot us already. Good to see you in here again.

[Anonymous]

Welcome back Gabe (Sounds like a song "Welcome back Carter). I cannot offer any enlightment on NS into Indy City, but there are two types of operating on someone elses track - trackage rights and overhead rights. Trackage rights have been pretty well discussed above. It gives the guest railroad the right to service customers on the line, however, this right might be limited to certain customers or certain portions of the line. The second is overhead rights where the guest railroad has the right to run through trains on anothers track without the right to solicit business. This may be the case where BNSF uses the UP lines between Salt Lake City and Sacramento. (I do not know their official status on the line re trackage or overhead rights). Typical charges for the right to travel on the line is around 25 cents per car mile. That is what Trinity Rail Express charges UP, BNSF, and a short line to use the TRE corridor between Dallas and Fort Worth. Yes, their freight trains can be a nuscence, however, we like the check we get every time they run a train over the corridor. Another scenario is where the owner of the track is not using the line and will lease it out to another railroad. The lessee usually is responsible for all maintenance of the line (track, signals, crossing gates, etc) for a fixed fee. Dallas Area Rapid Transit owns about 250 miles of ROW in the area that is being held in reserve for future light rail service. In the meantime we lease out the lines to operating railroads. A classic example of this is the Pittsburg & West Virginia Railway. It was leased to Norfolk & Western many years ago for $915,000 per year for 99 years. N&W maintained it and recently sold their leasehold interest to the Wheeling & West Virginia Railway who now makes the quarterly lease payments. The holding company, P&WV, which is classified as a real estate investment trust (REIT) has a flat income stream of $915,000 per year. their only expense is a little book keeping and the writing of dividend checks. Great for investors, however, no growth.

***

[chad thomas]

FYI...BNSF does serve customers on the overland. They have a regular switch job in Sparks that serves Reno/Sparks and an industrial park east of town. Utah RR does there work in Utah (SLC-Provo-Helper I think)

[MP173]

***:


Great explanation. I have been wondering for awhile what typical charges are for trackage rights. I guess .25 per car mile would seem a bit low if they were loaded coal trains.

Are there escalator clauses in for annual increases?

ed

[Anonymous]

QUOTE: Originally posted by wrwatkins

Welcome back Gabe (Sounds like a song "Welcome back Carter).

I think that was "Welcome Back, Kotter".....and, come to think of it, it did star Gabe Kapland, didn't it?

Coincidence? You decide.......

[CSSHEGEWISCH]

Trackage rights charges vary and are considered proprietary information between the railroads involved.
Absorption of switching charges comes when interchange is made within a switching district's boundaries. In Chicago, if interchange is made through BRC or IHB, those roads will bill the line-haul carrier for their services. These charges would already be figured into the line-haul tariff.

[Anonymous]

Futuremodel you are correct. It was Kotter not Carter. This was not a progam we watched often and it being a few years ago I am a little fuzzy on the particulars.

Chad thanks for the info on the BNSF using the UP tracks in Nevada. I did not know what type of agreement they had and you have clarified the status.

MP173 I do not know if we have an escallation clause in our trackage agreement on the TRE. Our rates are probably on the low side because we have competition for this service between Dallas and Fort Worth. The UP has their former T&P main line just 3 miles south and the KCS has the old Santa Fe line 5 miles to the north.

***

[spbed]

I know for a fact that when the DHRR held rights on Conrail they had to pay Conrail a mileage charge which I want to say was $018.5 per mile per car. [:o)][:)]

Originally posted by gabe
[

Living nearby to MP 186 of the UPRR  Austin TX Sub

• Reply