QUOTE: Originally posted by tormadel I think we may have confused him LC, I'm sorry.
QUOTE: Originally posted by Junctionfan What kind of basic transloading opportunities would there be? Would that make the shortline more profitable and more attractive for investors?
QUOTE: Originally posted by tormadel Also, is it a big price difference between an unmodified GP9 and say a paducah built GP10? I've seen GP38-3's, did anyone try fooling with the new traction technology with a GP9 rebuild? or would it even help? heh. Always new spins on old reliable tech.
QUOTE: Originally posted by powderkeg ok i want to know how much a train engine costs?
QUOTE: Originally posted by zardoz QUOTE: Originally posted by MichaelSol [ After Nick Temple created the Washington Central out of a purchase from the BN and started making money at it, his famous quote was "I am now convinced, based on my experiences, that railroaders don't know how to run railroads. You have to be from outside that industry in order to do anything right." [Paraphrase] I am sure he was referring to the business side of things. That was before he sold the operation back to BN at an enormous profit. Just curious...do you have any idea of how well the BN did with the operation after they bought it back? Did the BN operate with their "business as usual" philosophy (the one they used before they sold it), or did they operate it in a similar fashion to how Mr. Temple ran it?
QUOTE: Originally posted by MichaelSol [ After Nick Temple created the Washington Central out of a purchase from the BN and started making money at it, his famous quote was "I am now convinced, based on my experiences, that railroaders don't know how to run railroads. You have to be from outside that industry in order to do anything right." [Paraphrase] I am sure he was referring to the business side of things. That was before he sold the operation back to BN at an enormous profit.
QUOTE: Posted by futuremodal Another good example of buying a former piece of mainline for future capital gains is the Montana Western (the former BN nee-NP section from Garrison to Silver Bow near Butte), which BNSF just bought back (ostensibly to keep UP and MRL from interchanging). Again, the original shortline owners were crying all the way to the bank. It is also interesting to note that the tracks over Homestake Pass are still in place and owned by BNSF, thought they haven't seen action in decades.
QUOTE: Originally posted by Limitedclear In my own humble experience it will literally take years for someone coming from the outside to penetrate the industry to the point where a Class 1 will seriously consider leasing or worse selling a line to an unknown. Anything they do offer, LOOK OUT, it is probably something all the "real" players have turned down.
QUOTE: Originally posted by tormadel Oh yes, and can someone explain to me how senority works? I have never had to deal with a union situation before.
QUOTE: Originally posted by tormadel QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by tormadel Indeed I have read it. I was just saying it was abit of a bore. My little family here has a savings of about $700 so I would say my dream is in the infant stage where it hasn't even learned to crawl yet. I'll keep working hard and crawling up the ladder. I will get there someday. Well, since cash is an issue I'd suggest a job with a railroad where you can learn while you earn as I mentioned above. I'd look at T&E service as you can make pretty good money there and hopefully put some away. It will be difficult on the family but if you establish a seniority date early and get your RTC and Engineer training done ASAP you'll have decent seniority and should be able to hold a decent job. In your area I'd check with the Wisconsin Southern and perhaps the UP and\or CN if they have terminals close by. At least that way you will get hired out and get your training paid for by the RR. I have no idea what you make at Dominos but I am certain the RR is better. LC Oh for sure. I've been trying to keep tabs on W&S and CN they are the most local, UP or CP would be quite a decent move from here thou. Is T&E track and equipment service?
QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by tormadel Indeed I have read it. I was just saying it was abit of a bore. My little family here has a savings of about $700 so I would say my dream is in the infant stage where it hasn't even learned to crawl yet. I'll keep working hard and crawling up the ladder. I will get there someday. Well, since cash is an issue I'd suggest a job with a railroad where you can learn while you earn as I mentioned above. I'd look at T&E service as you can make pretty good money there and hopefully put some away. It will be difficult on the family but if you establish a seniority date early and get your RTC and Engineer training done ASAP you'll have decent seniority and should be able to hold a decent job. In your area I'd check with the Wisconsin Southern and perhaps the UP and\or CN if they have terminals close by. At least that way you will get hired out and get your training paid for by the RR. I have no idea what you make at Dominos but I am certain the RR is better. LC
QUOTE: Originally posted by tormadel Indeed I have read it. I was just saying it was abit of a bore. My little family here has a savings of about $700 so I would say my dream is in the infant stage where it hasn't even learned to crawl yet. I'll keep working hard and crawling up the ladder. I will get there someday.
QUOTE: Originally posted by Limitedclear QUOTE: Originally posted by futuremodal Interesting thread. Some comments... 1. Why a shortline? Shortlines are usually contractually mandated to get all their traffic and have their share of the revenue dictated by the former Class I owner, e.g. you are captive. Which would be fine, except now you start to realize why the Class I gave up on the line in the first place - low traffic levels, terminal consolidation, etc. Why do you think the former owner will effectively want to reverse course and refocus on that traffic? 2. But if you are committed to such a dream, try to find a shortline that has access to quasi-unit train potential, e.g. a coal mine, a large wheat growing area, etc., or that has access to a transload alternative to interchange with a Class I, e.g. a barge port, or best yet both. If you can originate and terminate a good portion of your traffic base potential in the form of multiple car lots at a time, you will have as good a shot as any for success because then you can control part of your own business destiny, not the Class I connection. 3. Also, look for lines that have the potenial to become at least a secondary mainline in the future, and not just a dead end line. You remember the Washington Central? They bought the ex-NP Cascade line through the Yakima Valley to run as a shortline, then about 10 years later BN decided they might need that line again as a secondary main to the Stevens Pass and Columbia Gorge routes, and ended up paying WC a lot more to take it back than they sold it for in the first place. Needless to say, the WC owners ended up with quite a capital gain! 4. Take a page from the Watco Companies and try to pawn off as much of the infrastructural responsibility as possible onto the local and/or state governments (while retaining operating rights). The more you can absolve yourself of needless liability, the better off your chances of success. 5. For those still interested in all or parts of abandoned mainlines, take a good look at the ex-Milwaukee PCE. That grade is probably the best potential for rebuild in the nation, because it offers the easiest prospect of rebuilding a new east-west transcon with all that international trade potential. By all means, if you can get your hands on parts of that property go for it, even if you have no immediate plans to actually start up a shortline or regional. There is a growing national awareness for just how usefull it is to have new rail capacity available in the next few decades to capture both domestic and international trade growth, and there is no other ex-Class I gradient with as good a profile and geographic proximity to market optimization as the PCE. 6. Finally, if you want in of the ground floor of what it is like to be involved in a new rail project, start investing in the DM&E. That'll give you a first hand taste of all the particulars you would have to go through in starting up your own railroad. I have to admit that, for once, I don't completely disagree with FM. That said, I don't entirely agree with him either. 1. Why a short line? It is the only place you can really have your own business in the railroad business that has any chance of longevity. You can run a real railroad. You can have a better life than is possible working for a Class 1. How many jobs on a Class 1 can be 9 to 5 or so monday thru friday, not many and by the time you can hold them you probably have more than 25 on the job. Traffic can be grown with good marketing and good service. 2. Are you committed to the dream? Well, you'd better be because when it gets bad there isn't the backup of the Class 1 to babysit for you. Locomotive break down? No power room to call for mechanical help. Maybe the mechanic can come help you, but you need to be capable of basic troubleshooting on your own. You'll need to be capable of pretty much all the basics. Having an engineer's license, a conductor's qualification, a track inspector's qualification and some basic mechanical knowledge is a good start. A little business savvy, some legal knowledge, knowledge of handling employees and some spare cash will help a lot. Maximum personal commitment is an absolute. Would it be nice to have unit trains, sure, but such lines don't grow on trees and most have too much traffic to be spin off candidates unless there is something seriously wrong with them such as environmental issues or HUGE maintenance costs due to many bridges, tunnels, curves or other features that greatly increase the costs of operations and maintenance. It is always worth looking, because there is an occasional opportunity which has great potential. Of course, remember, there are many bigger and more experienced short line groups looking for lines too and a new player has little chance. 3. Look for a Secondary Main Line. Not a bad idea, but the Class 1s are on to this one. Very few such sales have happened lately. Where they have the Class 1s have used paper barriers or lease agreements to restrict any flow of overhead traffic. Recently, most Class 1s have been leasing lines to short line operators under some pretty onerous terms so not only will there be no capital gains (the Class 1 gets to keep that along with title to the line) but the short line has to pay for not only maintenance but capital improvements to an agreed level. Take a look at the "Heads I win, Tails you lose" article in the December 2004 Transportation Newsletter at the following law firm site for an example: http://www.wbsk.com/ 4. Pawning off infrastructure on localities has the nasty side effect of giving those localities far too mach control over the short line. Also, you don't lose much liability this way, most municipalities are very good at making the short line shojulder all the responsibility through agreements for indemnity and contribution. Besides, joint and several liability usually means that hoped for liability savings are illusory at best. 5. Buying an old mainline with no track on the extreme speculation that it will someday be relaid is crazy. Even if it does work, the new railroad would simply pay you fair market value based upon the condemnation of the property. Your appreciation factored over the time you wold need to hold the property would be extremely low even if a major RR took an interest in such an uncertain and risky project today. As an example look at the many years it has take the DM&E to even get to the verge of a much smaller project as guidance. You can do much better buying bonds and clipping the coupons to say nothing of the stock market or simple real estate investments. 6. I wasn't aware that the DM&E was offering shares to the public, certainly it isn't mentioned on their website. LC
QUOTE: Originally posted by futuremodal Interesting thread. Some comments... 1. Why a shortline? Shortlines are usually contractually mandated to get all their traffic and have their share of the revenue dictated by the former Class I owner, e.g. you are captive. Which would be fine, except now you start to realize why the Class I gave up on the line in the first place - low traffic levels, terminal consolidation, etc. Why do you think the former owner will effectively want to reverse course and refocus on that traffic? 2. But if you are committed to such a dream, try to find a shortline that has access to quasi-unit train potential, e.g. a coal mine, a large wheat growing area, etc., or that has access to a transload alternative to interchange with a Class I, e.g. a barge port, or best yet both. If you can originate and terminate a good portion of your traffic base potential in the form of multiple car lots at a time, you will have as good a shot as any for success because then you can control part of your own business destiny, not the Class I connection. 3. Also, look for lines that have the potenial to become at least a secondary mainline in the future, and not just a dead end line. You remember the Washington Central? They bought the ex-NP Cascade line through the Yakima Valley to run as a shortline, then about 10 years later BN decided they might need that line again as a secondary main to the Stevens Pass and Columbia Gorge routes, and ended up paying WC a lot more to take it back than they sold it for in the first place. Needless to say, the WC owners ended up with quite a capital gain! 4. Take a page from the Watco Companies and try to pawn off as much of the infrastructural responsibility as possible onto the local and/or state governments (while retaining operating rights). The more you can absolve yourself of needless liability, the better off your chances of success. 5. For those still interested in all or parts of abandoned mainlines, take a good look at the ex-Milwaukee PCE. That grade is probably the best potential for rebuild in the nation, because it offers the easiest prospect of rebuilding a new east-west transcon with all that international trade potential. By all means, if you can get your hands on parts of that property go for it, even if you have no immediate plans to actually start up a shortline or regional. There is a growing national awareness for just how usefull it is to have new rail capacity available in the next few decades to capture both domestic and international trade growth, and there is no other ex-Class I gradient with as good a profile and geographic proximity to market optimization as the PCE. 6. Finally, if you want in of the ground floor of what it is like to be involved in a new rail project, start investing in the DM&E. That'll give you a first hand taste of all the particulars you would have to go through in starting up your own railroad.
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