If you've always wanted to start a shortline.....

[tormadel]

Bad day LC?

(I guess all that talk of tittles, deeds and insurance would throw a wet blanket on my enthusiasm too)

[Junctionfan]

LOL LC, yep wrong thread. However to attempt to stay on topic, how does a shortline incorporate a brand new aspect of the particular shortline such as transloading operation successfully? If the railroad hasn't done this before and now wants to, what needs to be done in order to guarantee investors a decent ROI?

[Anonymous]

Math.

LC

QUOTE: Originally posted by Junctionfan

LOL LC, yep wrong thread. However to attempt to stay on topic, how does a shortline incorporate a brand new aspect of the particular shortline such as transloading operation successfully? If the railroad hasn't done this before and now wants to, what needs to be done in order to guarantee investors a decent ROI?

[Anonymous]

Andrew -

I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics...

LC

[sd24b]

i have thought of starting my own short line when i am old,
like 40
just kidding

but i think by getting into railroad managment at a Class 1 or something with some creditblity will get people to listen to my plan
to relay the western maryland
accros Pa
again just kidding

the problem is that even the smaller guys don't want any thing to do with getting people in the bussness

i have personaly talked to the owner of a rather large ohio line
and he is very anti-youth
and by that i mean anyone under 30

lawyers if you are not one
will haunt your dreams

and there will be days you hate railfans
even if you have a rather large rail road junk collection in your rather large basement

this is what scares me about getting envolved with railroading career wise

[tormadel]

SD24, I think the problem is with people who don't know how to respect other peoples property (that would get into the proper raising of children thread but I digress). My father is a railfan, and I practically grew up in Hobson yard in Lincoln, NE. But my father made a very big deal of teaching me how to behave while we were there. Don't play with the switches, put stuff on the track or really even go near any of the equipment (well without a employee saying it's ok) Yes dad would drive through the yard, but he would stick to the road and not venture more then a couple feet from the car to get a picture. It's the idoits who try to race the train to a crossing <even the dirt one in the yard> that make you grind you're teeth.

I think railfaning is a very positive pubic relations and even marketing tool for the railroad industry. But it sounds strange that it almost seems there needs to be a class on how to be a railfan and not be a pain in the ***.

[tormadel]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by Limitedclear

Andrew -

I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics....

LC

That a hint you want the specifics from him? hehe

[Anonymous]

QUOTE: Originally posted by tormadel

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by Limitedclear

Andrew -

I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics....

LC

That a hint you want the specifics from him? hehe

Nope

LC

[sd24b]

QUOTE: Originally posted by tormadel

SD24, I think the problem is with people who don't know how to respect other peoples property (that would get into the proper raising of children thread but I digress). My father is a railfan, and I practically grew up in Hobson yard in Lincoln, NE. But my father made a very big deal of teaching me how to behave while we were there. Don't play with the switches, put stuff on the track or really even go near any of the equipment (well without a employee saying it's ok) Yes dad would drive through the yard, but he would stick to the road and not venture more then a couple feet from the car to get a picture. It's the idoits who try to race the train to a crossing <even the dirt one in the yard> that make you grind you're teeth.

I think railfaning is a very positive pubic relations and even marketing tool for the railroad industry. But it sounds strange that it almost seems there needs to be a class on how to be a railfan and not be a pain in the ***.

This Owner i know, respects me, because i know my way around my railroad, because my father is well connected with the local railroads, and i know my stuff, or at least he thinks i do,
but he still doesn't like to hire or deal with younger people, because i belive he sees the the learning curve, and the time it takes anyone to become a seasoned railroader

[tormadel]

Someday you will run out of seasoned railroaders if you don't start seasoning new ones :).

It's a catch22 these days in every industry. Everyone wants experiance but no one wants to be burdened with being the one to provide the experiance.

[Anonymous]

QUOTE: Originally posted by tormadel

Someday you will run out of seasoned railroaders if you don't start seasoning new ones :).

It's a catch22 these days in every industry. Everyone wants experiance but no one wants to be burdened with being the one to provide the experiance.

Working at a large regional or Class 1 is the best way to gain experience. If you know what kind of experience you are seeking, you can plan your career accordingly.

In my experience it is not so much the difficulty of finding someone to "give" you experience, as it is your willingness to take the chance and grasp the experience for yourself. That said, there is a general reluctance of employers to hire someone they feel is using their company as a "stepping stone" to further their career.

LC

[tormadel]

True. Some businesses like food service don't expect most of they're employees to stay longer then the duration of college. But, it is always unpleasent to replace people.

[DPD1]

QUOTE: Originally posted by Limitedclear

Andrew -
I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics...

There can also be other non-rail factors involved... Many railroads still own a lot of the properties next to their mains... In that scenario, the new business as a whole might make them the real money. The track, or even the rail service itself, might only be something to sweeten the real deal... Which is in the real-estate.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

[mudchicken]

QUOTE: Originally posted by DPD1

QUOTE: Originally posted by Limitedclear

Andrew -
I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics...

There can also be other non-rail factors involved... Many railroads still own a lot of the properties next to their mains... In that scenario, the new business as a whole might make them the real money. The track, or even the rail service itself, might only be something to sweeten the real deal... Which is in the real-estate.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

To quote an old & very wise field engineer: "you can only sell it once". Better hope that sale comes with carloadings or don't sell.

[tormadel]

Yeah selling land simply for the cash would be a mistake in most instances. I agree with MC you are much better off trying to develope something on it that will use you're rails and hopefully use them alot.

[Anonymous]

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.

Recent market update. I was just offered two GP9/10s just run through the shop and qualified for a mere $139,000 each.

I also received an opportunity to buy several rewired GP7s and 9s in various condition for a mere $95,000 each (and some don't even run!!)

In short, the market is going crazy just now...glad I don't need power at the moment...

LC

[tormadel]

Yeah that is crazy LC. $140k wouldn't be a bad deal for a package deal of 3-4 of them heh. Now those same prices for a GP40 I could find more palitable. But come on if it's pretty FUBAR and doesn't run it shouldn't be worth more then scrap value. And I had thought it would have been bad in the late 80's when CNW, SP and everyones uncle was leasing power to overcome shortages.

[Anonymous]

QUOTE: Originally posted by tormadel

Yeah that is crazy LC. $140k wouldn't be a bad deal for a package deal of 3-4 of them heh. Now those same prices for a GP40 I could find more palitable. But come on if it's pretty FUBAR and doesn't run it shouldn't be worth more then scrap value. And I had thought it would have been bad in the late 80's when CNW, SP and everyones uncle was leasing power to overcome shortages.

Those days are gone. The high flying price of steel for the last few years has resulted in most older units sitting around without a home melted down for scrap. That coupled with the steep growth in traffic has soaked up the remaining running units even ones that larger roads would like to phase out. Finding a running GP40 for less than $300,000 in the existing market is unlikely. Running SD40-2s are going for $300,000 each now as well. Everyone is leasing power now as well. CSX is running units as old as U18Bs in some places. Power is extremely tight right now.

LC

[Anonymous]

And lets not forget the issues with getting cars from the Class 1s to service customers. It is nearly impossible to get lease cars to supplement fleets as the leasing companies are demanding higher rates AND long term deals (60 months+) for ordinary cars such as centerbeam flats, woodchip hoppers, all kinds of gons, coal hoppers and gons, and larger boxcars (Plate F). $400 to $500/car/month plus car accounting backoffice costs are very difficult fior short lines to bear. The end result is customers shifting freight to trucks...

LC

[tormadel]

Yeah, like I said it's crazy. But, not that I want to say the upswing in railroading is a bad thing. Also likly that there has been an increase in older/ marginal condition freight cars going to scrap because it just isn't worth fixing them. The negative side is the loss of inexpensive second hand equipment.

Now I'm sure the marketing people for the manufacterers<sp> could be giddy with the idea of returning shortlines to the mindset of the 40's and 50's. Shortlines buying brand new gear. In some cases new cars is an acceptable probablity. But new locomotives are still rather cost prohibative, being up to 6-7 times more then the expensive used locomotives we're talking about. SD70ace's may be a wonder of fuel and maintence savings but I think they would be alittle much for say the Twin Cities & Western. Now granted both EMD and GE took a shot at the low end market and it didn't work. But I think the failure of those projects had more to do with market climate then weather or not they were good ideas. If you could get used power on the cheap why consider the cost of even low end new? Despite the better performance.

[Anonymous]

QUOTE: Originally posted by DPD1

QUOTE: Originally posted by Limitedclear

Andrew -
I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics...

There can also be other non-rail factors involved... Many railroads still own a lot of the properties next to their mains... In that scenario, the new business as a whole might make them the real money. The track, or even the rail service itself, might only be something to sweeten the real deal... Which is in the real-estate.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

It is extremely rare in this day and age to have a line sold to a short line with any significant amount of property. Those days are long gone. Usually the line is stripped to its bare essentials and any outparcels sold before the line is even offered for sale.

LC

[tormadel]

Yeah you would have to convince the entity you are purchasing from that selling you the whole franchise (rail, land et al) is good for them. How giving you the tools for success would benefit they're company. And if it doesn't they are going to do what's best for them, not you. It does sometimes happen, but don't count on it, or on just goodwill to carry the day.

[txhighballer]

Like Limited Clear,i've run and started a couple of short lines myself, and you have to love what you do. You have to be a politician,a hustler, bookkeeper as well as know the railroad from the ballast up.
I just got a note across my desk that a guy is looking to sell four SD40-2's for 300K each. A few years ago I could have gotten them for 75K. Man times have changed!

[tormadel]

Yep yep, all market climate. Things will keep changing, but not likly to go back to those days anytime soon I don't think.

[DPD1]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by DPD1

QUOTE: Originally posted by Limitedclear

Andrew -
I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics...

There can also be other non-rail factors involved... Many railroads still own a lot of the properties next to their mains... In that scenario, the new business as a whole might make them the real money. The track, or even the rail service itself, might only be something to sweeten the real deal... Which is in the real-estate.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

It is extremely rare in this day and age to have a line sold to a short line with any significant amount of property. Those days are long gone. Usually the line is stripped to its bare essentials and any outparcels sold before the line is even offered for sale.

LC

Maybe we are talking about different scenarios. I know of a shortline in the Chicago area that just sold some land for millions, and still has plenty to sell. Yes, getting a trackside customer out of it would be icing on the cake. But how many carloads would you have to move to make that money? In today's business world, most railroads would be sold to a different owner before that would happen. If given the opportunity to make millions, I don't think many companies would turn somebody down because they weren't going to have a rail based business there.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

[tormadel]

Well it's more about short sightedness. In the '80's SP sold alot of it's valuable lands in Cali and the pacific coast. It went for alot of money but all it really did was temporarily alleviate company losses. So actually it was a foolish move, but the company was abit desperate. Selling assests is a very temporary fix for finacial problems. In reality companies need to be more far sighted. Find new ways to increase traffic and effeciency, reduce debt load and related interest payments. Often debt is the only way to expand business but debt is also the anti-christ and should be gotten rid of as soon as wisely possible.

[Anonymous]

QUOTE: Originally posted by DPD1

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by DPD1

QUOTE: Originally posted by Limitedclear

Andrew -
I was being a bit flip with my response above, but just like with any new business opportunity, transloading, putting in a new switch, siding for a customer or team track; the cost benefit has to pencil out. Can't tell you more without specifics...

There can also be other non-rail factors involved... Many railroads still own a lot of the properties next to their mains... In that scenario, the new business as a whole might make them the real money. The track, or even the rail service itself, might only be something to sweeten the real deal... Which is in the real-estate.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

It is extremely rare in this day and age to have a line sold to a short line with any significant amount of property. Those days are long gone. Usually the line is stripped to its bare essentials and any outparcels sold before the line is even offered for sale.

LC

Maybe we are talking about different scenarios. I know of a shortline in the Chicago area that just sold some land for millions, and still has plenty to sell. Yes, getting a trackside customer out of it would be icing on the cake. But how many carloads would you have to move to make that money? In today's business world, most railroads would be sold to a different owner before that would happen. If given the opportunity to make millions, I don't think many companies would turn somebody down because they weren't going to have a rail based business there.

Dave
http://www.dpdproductions.com
- Featuring the TrainTenna Railroad Scanner Antennas -

Dave -

I have no doubt railroads can make money selling land they already own. All I am saying is that if you are buying a short line from a Class 1 railroad nowadays don't expect that any property other than the ROW will go with the sale. Class 1s have whole departments that manage their real estate and long before a line is spun off, these folks have already sold any excess property beyond that absolutely necessary to operate the line.

LC

[txhighballer]

The SP abandoned one line in particular that they wi***hey could get back.and ripped up another they wi***hey had. They thought it was the smart play to abandon the Beaumont-Lufkin trackage run everything through Englewood in Houston. History has shown that tearing up that track was a bad move,and selling the Victoria Subdivision,abeit without rails , to KCS as a result of the merger will bite them badly just as soon as KCS can put tack on it again.

[tormadel]

So LC if you are lucky you get the lines, spurs, yards related maintence facilities and maybe an old Depot you can use as your company HQ?

[Limitedclear]

QUOTE: Originally posted by tormadel

So LC if you are lucky you get the lines, spurs, yards related maintence facilities and maybe an old Depot you can use as your company HQ?

Something like that. Don't count on the depot or maintenance facilities though, most have been sold off long ago. You'll need to build your own buildings. Luckily they aren't that expensive. One good steel building can give you a one stall enginehouse/carshop and some office space. With luck you can put that up for less than $60,000 with financing from the steel building company...

LC