Since 1995, I can think of a number of North American shortlines that bit the dust: WC, DMIR, ICE, DM&E, and all of those Canadian shortlines that CN is buying back. (Why does a railroad spin off a line, then turn around and buy it back anyways?) And now the CN- EJ&E merger is approved Is the era of North American independent shortlines and regionals drawing to a close? First the Class 1s, Now the class 2s. Do you think that the continent’s rail system will consist of one or two railroads by 2100. What do you think?
For my money, I’m hoping that by the year 2100, when I’m 140 years old, that trains will be moving through the air, George Jetson style. I can’t see why they would be limited to only one railroad at that point.
The lines you cite are in fact all “Regional” railroads (Class II) rather than short lines which are generally the truly small railroads (Class III). There has been acquisition and merger and line sales for decades and before that the merger and acquisition of smaller lines to form larger and spin offs as well. The NYC system among many others was stiched together from many short lines and other smaller carriers.
I expect that things will continue. In what direction we go will be dependent upon many factors. Availability of financing, government regulation, customer and indutrial base and use of rail, passenger rail and development and many other factors.
I was told by an old conductor and mentor of mine that one of the first things he heard after hiring out in the late 1950s was that “railroads aren’t gonna last” from other employees. When I met him he was a year from his ultimate retirement with 40+ years of service. Never write off the railroads, our country needs them much more than the average person understands.
LC
Unless, through some weirdness or other, some genius, funded through some logistics company bent on trashing both trucking and trains comes up with the perfect teleportation device—and genius ends up doing the ‘fly’ as it were—I do not see there to be only 1 or 2 RR’s left. There was always spinning off, buying back----aren’t co’s buying back stock they put out?–and all that-----
I don’t think we are going to see the end of short lines as they are bought back by the Class I roads. In fact, with one exception, none of the roads you’ve named were bought back by the railroad that sold them. Most of the WC was spun off by the Soo Line (CP) (some portions were C&NW spinoffs). WC was acquired by CN. DM&E was a C&NW spinoff, acquired by CP. I don’t think that DM&IR was ever a “spin off” (although I’m not sure about this), but it was acquired by CN. The one exception is IC&E. It was “spun off” by Soo Line (CP), and recently reacquired by CP as part of it’s acquisition of the DM&E network. But CP’s chief interest was in the DM&E itself, not IC&E. It will be interesting to see what they end up doing with the IC&E lines. I’m not familiar with what CN is doing in Canada.
All of the above “short lines” (actually, regional railroads) were “strategic” to the Class I roads that acquired them. For example, WC links CN’s northern network to the Chicago gateway through Wisconsin. The EJ&E is also “strategic” to CN, forming a connecting route around Chicago between CN’s lines running north and east/south from Chicago. Most “short lines” aren’t in such a position. Rather, most are “feeders” to Class I roads. In this situation, the Class I roads won’t take much an interest in them unless the Class I believes it can run the road substantially cheaper than the short line, or the short line is doing something that puts the Class I’s interchange traffic at risk (like letting its railroad fall apart).
Having said that, much has changed since the heyday of short line spinoffs. One large driver of the short line spinoff movement in the 1980’s was the weak condition of some Class I roads, which created an incentive to improve their short term financial performance by monetizing non-core assets. Another driver
There’s plenty around here…[:P]
Regionals: GRS, VTR, NECR, MM&E, St. L&A
Shortlines: P&W, G&U, CSO, CNZR, MCER, NHC, NHN, C-C, and until a few years ago, NEGS…
That’s excluding tourist lines, those are all freight hauling (although P&W operates some passenger specials) shortlines and regionals. Only a few are owned by the big companies like RailAmerica or G&W, the others are independant.
Maybe you guys don’t have any shortlines up there 'cause CP and CN gobbled them all up…[swg]
We are always going to need railroads to get things from place to place.Nimbys complain about traffic now.Here in our humble state of ohio our infrastructure projects are about 10 years behind.(some roads should have expanded 10 years ago).
stay safe
joe
The class 1’s have little interest in local switching, especially in isolated instances. As long as there are industries that use rail (and it’s financially worthwhile), there will be short lines to serve them.
A short line in my area (part of the GVT group) even gets their drops from CSX in one location, then serves another location by traversing the CSX main.
I agree with Tree…short lines will continue as long as there is need for terminal switching and branch line operations. Regionals also will continue, forever morphing to serve the need. Getting down to only two class one’s coast to coast is a bit of a stretch in my mind, however. I really think the days of endless investment building is going to slow and that big big has been found to actually be too big and not two big with its attendent unwieldlyness and lack of local response. McDonald’s Big Mac may sell in Portland, ME and Portland, OR, and 4 ft 81/2 in can be in both places, too. But service needs and conditions are compldetely different.
From what I’ve discerned lately, the Cedar Rapids & Iowa City (CRANDIC), the Minnesota Commerical and Progressive Rail are shortlines that are doing fine.
I am not a union guy, but I believe that a major motivation for many short line and regional spinoffs was Class I labor costs. The Class I carriers were running four and five man crews at union wages and the spinoffs could run two or three man crews at lower wages. The wage spread also applied to most other crafts. Most low density operations use a relatively lot of labor, so that is were the biggest relative savings were to be had.
With current crew consist agreements the labor spread has narrowed and wage rates have tended to converge as the spinoffs have to be somewaht competitive to hold people. Creating spinoffs also creates overhead on the shortline that would not otherwise exist so that eats up some of the savings. Spinoffs also create overhead on the class one that would not otherwise exist, but this may be so small as to be undetectible given everything else going on there.
In short, I think the spinoff game has run its course since the labor savings that drove it have diminished. That change in labor spreads also makes it easier for the Class I to reacquire the former spinoffs. Follow the money.
Mac
Don’t let the “union labor cost” fool you as being the total labor cost. Yes, labor costs were (are) the major reasons that terminal and branch line operations are often handed off to a short line. But the fact that sevaral branch lines or terminal operations within a region could mean crews for each train and direction while a short line could do it with one crew spread across several lines. It was not just the union scale which factored into the cost but also the scale of the operation at any given point.
Henry 6,
Agree, you are simply reinforcing my point.
Mac
Is NECR independent? I’ve seen pictures of NECR trains led by units clad in the same paint scheme as CORP locomotives.Also , Isn’t Providence and Worcester a regional?
NECR is a Rail America/Fortress company. St.L & A is a G&W company. P&W is a Class II (Regional)
LC
In central Illinois the I&M (former CIM) is owned by G&W. All their locos, including the RS1325s, are in Genesee orange.
TP&W, like FEC in Florida, is now owned by Rail America. These parent companies tend to impose their paint scheme on their sibling shortlines. TP&W and FEC both have locos wearing the same paint scheme. In RailAmerica’s case it’s red, white and blue.
In Kansas, the Watco owned Kansas & Oklahoma is the states 3rd largest rr behind BNSF & UP. Much of the shortline trackage across the state has been taken out of servive acct mostly of bad trk which dimished traffic shipments and the lack of funds to maintain and repair. Just about all this trkage was grain branches that did generate avery good amount of seasonal traffic back in the day. Since 1998, most of the country elevator grain shipping in KS is now hauled by truck instead of rail.
I think one of the major changes in short line railroads of today as opposed to… say pre Conrail days… is that many shortlines are owned by larger companies. Corman, Genesee and Wyoming, RailAmerica, Kyle, Morristown and Erie, et al, are larger companies owning and/or operating several short lines each. There are probably fewer “Mom and Pop” shortlines as we knew them back when, but just as many if not more; there are just fewer owners.
Is there an official benchmark nowadays as to whether a line is a shortline or regional based on mileage and revenue? Of the above examples for instance,I’ve seen Providence & Worcester referred to as a regional RR (including official Company documents).
As far as a possible increase in the number of smaller RR’s from what I’ve read,should the big Class 1’s coelesce into just 2 Mega-systems this would spawn quite a few new regionals, some as large as “Golden Age” Class 1’s. I still hope that the 2 Class 1 scenairio doesn’t come to pass both as a railfan and someone who realizes the economic importance of the industry…
Kyle has been part of Rail America for a number of years. Of the 600 or so short lines in North America over 100 remain independent.
LC