Short Line Investment?

[edblysard]

Mike...
Yes, two trains a day.
If you are switching out local plants, in this case, a woodchip and a cardboard plant, you have two choices...send the crew with a locomotive out from the "home" terminal to the plants, or park the locomotive out near one or the other and cab the crew back and forth...handled by one of the management folks.
At some point, you will have to bring some of those cars into and out of your yard for interchange...cardboard plants need more than just wood chips.

So who pulls and spots your interchange with the class 1s assuming you generate enough cars for a daily or every other day interchange?

Even if you don’t, you still have to serve the woodchip/cardboard guys, along with any other customers, and if you throw in a coal drag, you could have the interchange crew drag out the outbound to the interchange, leave them, pick up the coal at the interchange point, take the load to the plant, and pull the empty, return to the interchange point, leave the outbound empty coal, pick up any inbound freight and head back in to the yard...someone has to switch out the inbounds...more work than one crew could do in a 8 or a 12 hour shift.

Either way, you are going to need two crews/train a day to keep everyone happy.

Assume you can use the Class 1 power that arrives on the coal train to go spot the plant, and pull the empties, perform an initial terminal air test, hang the Fred, take the whole deal to the interchange point, write the air test slip, and leave the intact train for NS or CSX to pick up at their leisure, get on your power and return with any cars they left for you.

We do somewhat the same thing with grain trains, saves swapping power, doing more than one air test, keeps thing flowing.

Another concept would be the crew that does the coal move, on the days there is no coal, works the yard, switching and lining up spots for the local, blocking out the NS and CSX cars, while the local does their thing...still need two crews a day... even if your a 8am to 4pm five day a week operation.

Ed

[mudchicken]

Hydraulic or Air tools / I-R Compressor or Hydraulic Power Unit? (Off the truck please) - Oh man have I seen the falacy of just two men, a truck and a backhoe....The small tool availability issue gets scary, especially with those who don't take care of the equipment.

Surfacing Gang every 30 Mos? (rent/subcontract?) Availability of TSR or TKO machine? How fast does it fall apart?

Qualified Welder or are we parts changers & cannibals? (Kills your supply materials budget)

Speed? (You guys with the mirriors always wanna go faster)...Track class 1 0r 2?

[MichaelSol]

QUOTE: Originally posted by Limitedclear
As far as the payroll goes, I make it to be a total ... $529,950.

Well, that's close enough to my $592,000 estimate that regional variations in pay certainly makes $529,950 reasonable enough. Still seems like a lot of managers.

QUOTE:
Concerning Locomotives.

B23-7s. I can lease these units (due to industry connections) at $40/day/unit or $14,600/unit annually. Total $29,200.

SD40-2 or SD50. I can lease these units from a friendly source for $200/day or $146,000 for two annually.

My estimate was $313,230.51 annual lease charges for all of your estimated motive power, yours for four SD-40s and 2, 2000 hp units is $321,200. Pretty close.

QUOTE:
MOW Equipment

Boomtruck, Backhoe and trailer should be a total of about $75,000 from the right suppliers in good shape. Hirail inspection truck will be another $30,000 assuming good used vehicle with hirail mounted and FRA certified. I'd buy these with cash from the invested capital unless I was offered excellent lease terms.

Well, I estimated $150,000 for the lot, a $21,356 annual cost if financed or part of a financing package.

QUOTE:
So far, I'm only at $705,150 and I've covered many of my largest costs. I think $1.2M is not only doable, but I might have a few bucks left over, depending upon fuel costs, but as I intend to be junction settlement I'll ask for a cut of the Class 1 surcharge.

Fuel is a little tough to estimate because of the off-property use, but I would bet annual costs at between $110,00 and $156,000. Not sure if the estimated revenue includes or excludes a surcharge. I estimated $126,366 in annual fuel costs using a $1.76 per gallon figure.

I just got done with a business plan estimate that has generalized operating expenses at about $94,000; insurance, garbage, utilities, permits, licenses, the usual etc etc. It's always a surprise how fast those add up. I would guess, for hypothetical purposes, the general operating costs of a 30 mile railroad, including shop utility bills, parts/maintenance, insurance, lubricants, legal, professional, MOW supplies, garbage, licenses, permits, etc, at about $180,000 per year.

Still not sure about the extent of deferred maintenance, if any. How would heavy track work be done?

Based on my estimates,I get $1,232,952 in overall operating expenses. Pretty close to yours. Without knowing more, it does appear that you might well be able to beat those costs.

Still seems like a lot of managers.

Good luck.

Best regards, Michael Sol

[Anonymous]

QUOTE: Originally posted by mudchicken

Hydraulic or Air tools / I-R Compressor or Hydraulic Power Unit? (Off the truck please) - Oh man have I seen the falacy of just two men, a truck and a backhoe....The small tool availability issue gets scary, especially with those who don't take care of the equipment.

Surfacing Gang every 30 Mos? (rent/subcontract?) Availability of TSR or TKO machine? How fast does it fall apart?

Qualified Welder or are we parts changers & cannibals? (Kills your supply materials budget)

Speed? (You guys with the mirriors always wanna go faster)...Track class 1 0r 2?

About half is Class 2 the rest is class 1 currently. We have gone the compressor route in the past. I haven't had problems getting that gear resonably. I prefer 3 men. I usually cross train as trainmen as soon as I can. I also expect everyone to pitch in on the track to a degree (I know many of my fellow T&E folks hate it, but, cry me a river). I am a stickler on equipment. Those who don't take care of company material and equipment, don't last.

Surfacing gang, what's that?! Seriously, that will depend. We will be putting in a good number of ties out of the gate and repairing a couple of small washouts on the OOS portion. Remember that initially we should have the better part of a year to reopen about half of the line and that is where we will focus. That will mean contractors and machines on the property and a good chance to get off to a great start.

We have had good luck hiring welders locally in the past. If that is not possible we have people we can send.

LC

[Anonymous]

Michael -

Yeah, your numbers aren't too terribly out there, but I think we can still make it go. We could come in at $1.2M perhaps a little higher or lower. Again, the management team is talented enough to make it go and won't shy from hard work. Gotta be a GOOD deal to get me out from behind my control stand. This thing could have real legs and not be a highly leveraged house of cards like some short line groups...

LC

[MichaelSol]

QUOTE: Originally posted by Limitedclear

Michael -

Yeah, your numbers aren't too terribly out there, but I think we can still make it go. We could come in at $1.2M perhaps a little higher or lower. Again, the management team is talented enough to make it go and won't shy from hard work. Gotta be a GOOD deal to get me out from behind my control stand. This thing could have real legs and not be a highly leveraged house of cards like some short line groups...

LC

Wouldn't it be fun though ...

Best regards, Michael Sol

[tormadel]

QUOTE: Originally posted by mudchicken

Hydraulic or Air tools / I-R Compressor or Hydraulic Power Unit? (Off the truck please) - Oh man have I seen the falacy of just two men, a truck and a backhoe....The small tool availability issue gets scary, especially with those who don't take care of the equipment.

Surfacing Gang every 30 Mos? (rent/subcontract?) Availability of TSR or TKO machine? How fast does it fall apart?

Qualified Welder or are we parts changers & cannibals? (Kills your supply materials budget)

Speed? (You guys with the mirriors always wanna go faster)...Track class 1 0r 2?

I would push for at least class 2 track. Not only to go alittle faster but for the increased safety and reduced chances of pesky derailments and such. I'm a believer in keeping the physical plant in the best shape that is economically practical. I know my father in law is a qualifed welder with 30yrs experiance who's looking for a new job but dunno if he'd want that kind of relocation <smile>. (alot of welders in my wife's side of the family actually)

And I should say this thread gets my excitement up just talking about it.

[tormadel]

QUOTE: Originally posted by Limitedclear

Michael -

Concerning locomotives.

B23-7s. I can lease these units (due to industry connections) at $40/day/unit or $14,600/unit annually. Total $29,200.

SD40-2 or SD50. I can lease these units from a friendly source for $200/day or $146,000 for two annually. As mentioned above, I will likely be able to trade horsepower hours with the Class 1 involved as part of the deal meaning I will effectively be getting the equivalent of 5 locomotives for my investment of 2 to haul the coal. This multiple keeps rising the more coal I move until I max out the capability of the available locomotives.

LC

This almost makes me wish SD59's had been produced at all. 3000hp from a 12cyl gas meiser sounds like an awesome idea. But they didn't go over. There are what? 10 GP59's all in posession of Norfolk Southern?

[kenneo]

This is an interesting thread.

I would have just one or two suggestions.

Contract out the MofW unless you can keep a "full M of W crew" busy at least 4 days a week. You can have your train crews assist, but I would not wi***o depend on them to handle most of these jobs. If you are going to need to use two train crews, I doubt that they will have much time to work on the track.

The engine and train crews will also be needed to assist your Round House Forman in the maintainence of your motors. Your RHF will also need to be versed in diesel electronics and electrical applications. Like how to locate and fix ground faults, etc.

The Bridge work requires a certified bridge engineer. I would think that you would have to hire this out to a contractor which specializes in bridges.

With careful planning, you can operate a unit train fo 10 cars. This should be considered if you can get trackage rights to the off-line destination of the coal (is it the mine or the plant that is off line?) or get an agreement with the union folk for a wage cost that you can afford and have your Class 1 provide your coal crew. You may be able to operate such a train 3 days per week (36 crew hours).

Your local crews could go on duty at "HQ", get their cars from the Class 1's, and head out for the paper mills and do thier shucking and jiving for 12 hours. Then, the second crew goes on duty at "HQ" and auto's out to the local, the crews exchange vehicles, the early crew drives home, the late crew finishes up the work and motors home to "HQ". If you can actually keep each crew to 8 hours, then the auto would be kept out at a tie-up point to auto back to "HQ" to make the crew change.

Lastly, double your cost of operations figure. You won't exceed that, but you will certainly exceed the numbers talked about above. You have taxes, insurances, bonds yada-yada that will cost you big bucks and you won't even think about before hand. Until you can get a good credit rating, you will be required to pay deposits in advance for supplies, for example.

I helped start up a short line in the early 1990's. I had been a RR for nearly 30 years by then and had diligently learned my craft (station services), dispatching, train and engine duties to name a few. I had proposed, costed and sold interline unit train services. I was not prepared for what ended up happening.

[tormadel]

This is great! [:D] Just what we need all these people who have been there to bring this knowledge together. These are some great things going on in this thread, I'm glad to be a part of it.

[Anonymous]

QUOTE: Originally posted by kenneo

This is an interesting thread.

Lastly, double your cost of operations figure. You won't exceed that, but you will certainly exceed the numbers talked about above. You have taxes, insurances, bonds yada-yada that will cost you big bucks and you won't even think about before hand. Until you can get a good credit rating, you will be required to pay deposits in advance for supplies, for example.

Yep yep, very interesting thread, I know for this lifelong shortline rail to read. I used to do cost sheets like this. I'd get all the est. expenses wrapped together for operating costs, and then double it. Yep, thats right, DOUBLE IT! That would then be the est. operating cost. YES INDEED, due to taxes taxes taxes( diesel fuel and payroll just to name a few! ), pesky variable costs / and unforeseen expenditure changes from the original spread sheets, blah blah blah the works. Shortline railroading can be done. And I'm psyched about the new Evansville Western. So phsyched, I already put together a EW yahoogroup. Although, the EW has the P & L backing it, so it's kind of out of league for this thread. Heres the link if anyone wants to join.: http://finance.groups.yahoo.com/group/EvansvilleWesternRailway/

[Anonymous]

then there is the issue of escrow for those rainy days of future maintenance projects like track /bridge structure upgrades( those dangblasted axle loadings ), engine overhauls, wheels, tractions motors, more blah blah blah

[Anonymous]

QUOTE: Originally posted by tormadel

QUOTE: Originally posted by Limitedclear

Michael -

Concerning locomotives.

This almost makes me wish SD59's had been produced at all. 3000hp from a 12cyl gas meiser sounds like an awesome idea. But they didn't go over. There are what? 10 GP59's all in posession of Norfolk Southern?

I don't want to get into about locos, because some people like Fords and Chevys, well I'm into SD38/39s, SD40-2s, 6-axle Alcos, and anything with a 12 cyl 645 in it( turbo'd or othewise). And I can babble on for hours and hours of fun bs about locos. But I've always wished there would have been a market for an SD59 model. Thing could have looked like a SD40-2 too. Same concept as with the SD38/39/40/SD45 scenario. Big porches for the 12 & 16 cyls, big hood for the 20 cyl obviously. Same with a SD59/60 combo: big hood for the SD60, big porches for the SD59. And all vanity aside, a SD59 could have been a modern age/ fuel mizing/cost concious mean & lean freight lugging / hauling machine. A third gen SD39 on steroids of 710 pills. Plop some HTCRs under it, and it's even more on the side of saving dollars. Alright, enough of my loco bs. Back to the regular program.....

[Anonymous]

QUOTE: Originally posted by tormadel

QUOTE: Originally posted by Limitedclear

Michael -

Yeah, your numbers aren't too terribly out there, but I think we can still make it go. We could come in at $1.2M perhaps a little higher or lower. Again, the management team is talented enough to make it go and won't shy from hard work. Gotta be a GOOD deal to get me out from behind my control stand. This thing could have real legs and not be a highly leveraged house of cards like some short line groups...

LC

Ok, so $1.2 million a year in operating costs that's good to know, and I believe in LC and Ed that it can be done. But I would like to better grasp what the projected carloadings translate to in estimated income. Doesn't have to be hard facts just ballpark.

Take a look at my revenue numbers above. Its all there. Same post as the expenses and EBITDA projection (cashflow) as well.

LC

[Anonymous]

QUOTE: Originally posted by tormadel

QUOTE: Originally posted by mudchicken

Hydraulic or Air tools / I-R Compressor or Hydraulic Power Unit? (Off the truck please) - Oh man have I seen the falacy of just two men, a truck and a backhoe....The small tool availability issue gets scary, especially with those who don't take care of the equipment.

Surfacing Gang every 30 Mos? (rent/subcontract?) Availability of TSR or TKO machine? How fast does it fall apart?

Qualified Welder or are we parts changers & cannibals? (Kills your supply materials budget)

Speed? (You guys with the mirriors always wanna go faster)...Track class 1 0r 2?

I would push for at least class 2 track. Not only to go alittle faster but for the increased safety and reduced chances of pesky derailments and such. I'm a believer in keeping the physical plant in the best shape that is economically practical. I know my father in law is a qualifed welder with 30yrs experiance who's looking for a new job but dunno if he'd want that kind of relocation <smile>. (alot of welders in my wife's side of the family actually)

And I should say this thread gets my excitement up just talking about it.

WHOA there junior...

Why do we need higher speeds???

We don't. This is a common misconception outside the short line world. 10mph is just fine. I'd like to have better track but have you ever seen the difference between a 10 mph derailment and a 25 mph derailment?! The cost is at least triple to go along with the ugliness. Keep in mind that the 10 mph derailment is already gonna cost you $50,000 to $100,000 or more depending upon any number of factors. So, the 25 mph $150,000 to $300,000+ derailment expense will really put a damper on that balance sheet fast... I'd probably keep the track excepted too, even though maintained better as it tones down the FRA issues considerably.

LC

[MichaelSol]

I did not take into account business (equipment) and property taxes. No idea what they would be on railroad property in that neck of the woods.

Best regards, Michael Sol

[Anonymous]

QUOTE: Originally posted by MichaelSol

I did not take into account business (equipment) and property taxes. No idea what they would be on railroad property in that neck of the woods.

Best regards, Michael Sol

Based upon similar properties my best guess on property taxes is $50,000 or less. That would be the number for the entire ad valorem tax including equipment.

LC

[Anonymous]

QUOTE: Originally posted by Limitedclear
[

WHOA there junior...

Why do we need higher speeds???

We don't. This is a common misconception outside the short line world. 10mph is just fine. I'd like to have better track but have you ever seen the difference between a 10 mph derailment and a 25 mph derailment?! The cost is at least triple to go along with the ugliness. Keep in mind that the 10 mph derailment is already gonna cost you $50,000 to $100,000 or more depending upon any number of factors. So, the 25 mph $150,000 to $300,000+ derailment expense will really put a damper on that balance sheet fast... I'd probably keep the track excepted too, even though maintained better as it tones down the FRA issues considerably.

LC

[mudchicken]

Tormadel: I kinda dropped a hint (LC caught it)...The operating types that go fast just because they can are a threat to the future viability of the line. What I asked LC about was what speed was going to do to the biggest asset you have here (track structure).

That shiny locomotive is worthless junk if the track is not there to generate income. Paperpushers and pure operating types get themselves in a hole quick on new startups frequently by ignoring the track structure and NOT having a good trained trackman around. The question was posed to see how much we could maximize the utility with.

LC: Would concur on the use of air tools like MT-4s, a pavement breaker and one inch Impact Wrenches along with a gas saw and gas bolthole machine. Local mechanics can usually fix them easier. (although air impacts usually fail early due to JoeBob not understanding how to take care of it...the joys of Marvel Mystery Oil!) .....We have yellow stickers around here that say in one inch letters: Take care of this equipment. If it doesn't work - neither do you!" [tup][tup][tup]

[MichaelSol]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by MichaelSol

I did not take into account business (equipment) and property taxes. No idea what they would be on railroad property in that neck of the woods.

Best regards, Michael Sol

Based upon similar properties my best guess on property taxes is $50,000 or less. That would be the number for the entire ad valorem tax including equipment.
LC

Well, that's reasonable.

I guess if I had a concern on the revenue side of things, it would be the high reliance of the line on the cardboard and woodchip traffic.

I've followed the industry since 1957, when one of the largest Kraft process mills in the world was built, literally next door. I've known every General Manager since 1957, beginnng with Roy Countryman, and including the current manager, Bob Boschee, with whom I spend a couple or three hours a week on a regular basis discussing business issues. They have about a $30 million a year transportation budget. Big operation, originally located on the Milwaukee mainline by Milwaukee's industrial department, served off of a short spur by NP.

The industry is so competitve, that many plants have been shut down in recent years. A new plant is so cost-effective compared to an older facility, and the margins so tight, older facilities have to work hard to make a profit. At the same time, the lumber industry has been on such a rollercoaster due to the Canadian timber tariff brouhaha, sources of chips have ranged from near to very far, naturally affecting overall costs of operation quite dramatically. Makes a big difference to the cardboard plant if it can buy waste chips, or has to make or purchase "custom" chips.

The pulp industry constantly oscillates between lean and plenty, that is, shortage and overcapacity. During the overcapacity periods -- which occur about every 5-7 years -- the industry generally loses two or three North American plants. These tend to be older and smaller plants. Compared to the Smurfitt-Stone operation that I am familiar with, the cardboard operation you are looking at appears to be quite small.

Bob reports that since Milwaukee left, most of the Smurfitt-Stone plant's transportation needs have shifted to truck. "BNSF's service has deteriorated to just awful; we try and use them as little as possible." He reports that MRL, which provides the service link to BNSF, does a good job, but once the traffic in on BNSF, "we just don't get service and with our margins as tight as they are, we can't afford to use the rail system if we can avoid it." Naturally, this sounds a little bit like the hypothetical Appalachian railroad -- dependent on someone else to actually provide most of the service, and being at their mercy.

Now, with regard to the overall proposition. If I were investing in something like this, on technical matters I happen to be a believer in expert, third party opinions -- consultants. I would probably hire someone with some time and expertise, such as Bill Brodsky or Alex Huff, to go look over the railroad and offer his opinion. Probably cost about $10,000 or so.

I would also hire someone like Bob Boschee to fly out and look over the pulp and chip operations to see if he thinks they will even be there in three years. I think I could get Bob to do that for about $10,000. If I wanted fancy reports and numbers, I could double those estimates. But, these would be gentlemen whose opinions I would accept without a written report.

I don't know anything about coal mining as an industry, but I do advise the owner of a coal mine, truck serviced, somewhere down there in West Virginia. He doesn't know anything about coal mining either, but he does seem to trust their current manager who appears to have done a good job with a combination facility. I would probably see what a visit for that purpose would cost as well.

So, from an investor's perspective, there's about a $20,000-$30,000 investment to see if it's feasible -- due diligence -- and that's before actually making any investment. To justify that, a person would have to be willing to purchase at least $300,000 of shares expecting a 25% return in order to justify the entire "cost" of the investment, and to be able to generate at least a 10% return over a safe investment in order to justify the risk. I am not looking at a spreadsheet, just ballparking some percentages.

As I mentioned on another thread, the railroad isn't the important factor in the decision -- the "lay of the land" from a revenue perspective is. I would need to know all about that cardboard plant and the chip or lumber mill. How old are they? Where's the industry going? Are those plants currently profitable? What are their earning and operating histories? Do they pay their bills on time? Do they have expansion plans or are they being "harvested"? How do their managements size up? Young and aggressive, or about to retire? Am I believer in their businesses? Can I help them succeed? Will I be a part of their success or a victim of their failure? Same questions for the coal operations.

I can walk the railroad and get a pretty good idea of what the railroad is like, what it needs, and ballpark some costs. I can price some engines. I can generate a capital budget and an operating budget.

Ironically, that tells me almost nothing about what I really need to know.

Best regards, Michael Sol

[Junctionfan]

Ya-with only 2 trains a day, I would also have to say that it would be better to contract our MOW work.

If there is going to be some mining haulage in the future, you might want to make sure the tracks are strong enough to take the load or you might run into what CONRAIL did with their wide-body locomotives.

[Anonymous]

Thanks for the input guys , but I don't contract all of my MOW out. That is a quick way to par far TOO MUCH for too little. Contractors have profit margins. I can't afford them unless there is a significant value add. That is one of the reasons we have a great management team for this project. Our track people manage projects including contractors when required. The contractors are used for specific tasks for which they are well qualified and capable of doing the job more quickly, conveniently and with less cost than our employees.

Also, you don't need a "Certified" bridge engineer to inspect a bridge. A B&B foreman is fine. We certainly don't need a bridge contractor to do that. That is just one way of opening your wallet. If I need more than replacement of existing compenents I of course use a state licensed Professional Engineer specializing in structures.

LC

[tormadel]

QUOTE: Originally posted by Limitedclear

QUOTE: Originally posted by tormadel

QUOTE: Originally posted by mudchicken

Hydraulic or Air tools / I-R Compressor or Hydraulic Power Unit? (Off the truck please) - Oh man have I seen the falacy of just two men, a truck and a backhoe....The small tool availability issue gets scary, especially with those who don't take care of the equipment.

Surfacing Gang every 30 Mos? (rent/subcontract?) Availability of TSR or TKO machine? How fast does it fall apart?

Qualified Welder or are we parts changers & cannibals? (Kills your supply materials budget)

Speed? (You guys with the mirriors always wanna go faster)...Track class 1 0r 2?

I would push for at least class 2 track. Not only to go alittle faster but for the increased safety and reduced chances of pesky derailments and such. I'm a believer in keeping the physical plant in the best shape that is economically practical. I know my father in law is a qualifed welder with 30yrs experiance who's looking for a new job but dunno if he'd want that kind of relocation <smile>. (alot of welders in my wife's side of the family actually)

And I should say this thread gets my excitement up just talking about it.

WHOA there junior...

Why do we need higher speeds???

We don't. This is a common misconception outside the short line world. 10mph is just fine. I'd like to have better track but have you ever seen the difference between a 10 mph derailment and a 25 mph derailment?! The cost is at least triple to go along with the ugliness. Keep in mind that the 10 mph derailment is already gonna cost you $50,000 to $100,000 or more depending upon any number of factors. So, the 25 mph $150,000 to $300,000+ derailment expense will really put a damper on that balance sheet fast... I'd probably keep the track excepted too, even though maintained better as it tones down the FRA issues considerably.

LC

Ok, granted I don't know all the facts about this line but I was making some assumptions. But, I was equating this to the Wisconsin & Southerns class 1 track. It's from crappy ballast and really old 80-90lb rail. So they have been haveing all kinds of problems with like 3 times more derailments, snapped rail etc etc. And they've managed to get the state to sign a bill for $6million a year for 10 years to upgrade all of they're 640miles to brand new rail and class 2 specs. So that is where my thinking was coming from. Your right the faster you are going the worse an accident is, but I was just thinking of reducing the likelyhood of accidents, my bad. Because I had been given the impression that class 1 track was the swirling in the toilet bowl kinda line, sorry.

[tormadel]

Opps appearently I was tired when I posted earlier. My mistake, a roots blown would be a SD58 <blush> and I would have to guess that horsepower at like 2600-2700(& 16 cylinders). The SD59 would have a turbocharger but only the 12 cylinders.

[Anonymous]

Be offline for a day or so, keep the faith...

LC

[tormadel]

QUOTE: Originally posted by Limitedclear

Be offline for a day or so, keep the faith...

LC

Ok LC, have a good one. Hope to hear from you again soon

[Junctionfan]

Well.........depending on what kind of tonnage a train from those mines are, I have to ask if it would better to use 115lb rail. I just don't see a bunch of loaded quad or bethgon hoppers staying on track with under 115lb rail.

[edblysard]

QUOTE: Originally posted by Limitedclear


32 miles. 115# and 112# with some 100# in sidings. Jointed. 2 miles of 115# CWR.
timber ties. 6 bridges all steel. Ruling grade 0.7%. Max curvature 10 degrees. Runs along river. Interchange: NS and CSX. Paper barriers possible.

Employees: 4 T&E; 3 MOW. To be adjusted as required by growth.

Equipment:

Locomotives: 2 4 axle units(2000hp) and 4 six axle units (3,000+hp)

MOW: Hirail inspection truck, Hirail Boom truck, backhoe, tamper, regulator others as deemed necessary.

Andrew, note the rail numbers, 115#, 112# and 100# jointed in some sidings...
As long as you run at restricted speed, its a good track base...would have to see how it was maintained, but thats what mudchickens do!

[Anonymous]

An interesting thread.

If I were a potential investor the most important variable for me would be the ability to develop other customers along the line. The cardboard plant, as it was already pointed out, seems too "iffy" for me. The plant could close, depriving the short line of almost half its revenue. But if there was suitable land along the right of way which could be developed into an industrial park of some sort then there may be an additional source of revenue.

In my area short lines have to be creative and aggressive when it comes to potential sources of revenue. Purchasing, rebuilding and then leasing motive power is something one short line in my area does to increase its revenues. Other short lines have gotten involved in hauling construction waste from transfer stations they build and operate themselves. Team tracks are also used.

[MichaelSol]

I remain puzzled over the six engine, high horsepower requirement for a $1.2 million revenue railroad.

Here's why. Where I grew up, the Milwaukee had one switch engine, a little SW1200, # 627. It ran just about every day for the 20 years that I knew it.

Through that little switch engine's eyes, it "operated" a railroad just about 50 miles in length. It did a Missoula patrol every weekday and a Blackfoot run on Saturdays.

Every morning, after it had breakfast it went six miles east from the Missoula depot to the Anaconda Company's Bonner (AFP) mill. There, it dropped empties and picked up lumber and woodchips. It hauled these back to Missoula where it set off the lumber and proceeded west to the Intermountain Lumber mill where it picked up both woodchips and lumber. Sometimes there were chemical cars waiting there for Stone Container as well, from the previous evening's freights. The sidings at the Intermountain Mill (actually part of the Missoula Yard) were also the "Traffic Gateway" to the BN resulting from the BN merger conditions, and BN cars would be spotted off the BN's Bitterroot branch at that location, waiting for Milwaukee pickup, or delivered there by Milwaukee for BN pickup.

Chip cars spotted from the previous evening's DFW from the Deer Lodge LP Mill would also be at this siding, ready to be taken to Stone Container.

After pickup of those carloads, #627 backed up about half a mile and put the Intermountain Lumber Co. cars with the AFP lumber cars, then proceeded west again with the AFP and Intermountain woodchip cars fifteen miles out to Schilling, the Stone Container pulp mill yard. There, it dropped off the woodchips, and went around to the other side of the mill and gathered the finished product cars. It hauled these back east to Missoula in the afternoon. The Stone Container cars would be blocked in whatever order with the lumber cars, along with chemical empties from Stone, and placed for pickup by the evening west or eastbound mainline freights.

On Saturdays, it took the morning off and went up the Blackfoot branch, an extraordinarily scenic and easy trip of about 35 miles, to pick up lumber, woodchips, and in former days sometimes sheep, cows or hay. Sometimes an Elk or a Deer was known to ride the caboose back down to Missoula.

It did all this at a blistering 10-12 mph. Sometimes they got excited and would go 15.

Now, that single switch engine was the heart of a $7 million operation in the early 1970s. That's $26,219,269 in 2005 dollars.

That little 1200 hp switch engine earned its keep. Including empties, it was handling anywhere from 30-50 cars a day on a 50 mile long railroad. It finally wore out and was replaced by a MP15AC.

While on the one hand that $26 million spoke to both the value of Milwaukee freight on its Transcon and of course the long haul revenues of that freight, I am still not clear why a single 1200 hp switch engine would be able to haul nearly three times the carloads on a longer line, whereas 6,000 hp would be necessary to haul substantially fewer cars on a shorter line.

The difference is an operating cost of about $300,000 per year, and so the question goes to a signficant cost factor.

Best regards, Michael Sol