This is probably a good prediction for what will happen but it will be a major economic jolt for a lot of short lines and a few regionals. Conventional rebuilds, hybrids and gen-sets will be able to command a higher price from the various remanufacturers than the third-hand GP38 at the local scrapper, which will also be more expensive due to the demand for hulks by the remanufacturers. As other posters have stated, you can’t get a used locomotive for the price of a luxury auto anymore.
The shortlines will have to buy their locomotives from a company like WABTEC’s MotivePower division. They will be able to make them in the configuration that best suits a shortline switching operation.
=== Not necessarily. Remember that a lot of the rail replacement out there is already happening incrementally and that sidings and yard tracks don’t require replacement for 286K. Also, most short lines can run 286K with any rail over 90# and there is quite a bit of 100#, 110#, 112# and 115# already on many short lines. The real 286K issue isn’t so much rail as it is bridges. === If such heavy rail were so common on shortlines – which its not – than rail replacement is no longer an issue with big power. And any line that doesn’t do some bridge work isn’t going to survive 268K anywa, much less worry about buying a second hand SD70M. On the other hand, you think a shortline will be able to afford a $1.5m+ new locomotive. I should introduce you to some of the company’s budget folks. They need some entertainment these days.
=== An SD70 might not be all that wierd on a short line. It has radial trucks which make it as kind to the track on sharp curves as a Geep. It has axle loading less than a GP40-2 with the large fuel tank. It is more fuel efficient than a GP40-2 at idle and under power. Since it is microprocessor contolled, it should have less wiring in it than a GP40-2. The desk-top controls might make it a bit weird to operated long hood forward, though. === It has been used on shortlines regularly. Just because shortlines don’t own them doesn’t mean they don’t use them. UP provides SD70Ms, along with all kinds off modern power, as run through on shortlined crewed interchange trains multiple times a day out here. The 90macs might have been a bit of overkill on the 90lb jointed rail though… :-\
NYS&W bought SD70M’s and B40-8’s in part to operate D&H under a directed service order (20 of the B40-8’s went to CSX when that ended) and for stack-train power. They were pooled with NS power and turned up in Chicago periodically.
Partially correct. The NYS&W acquired the B40-8s to operate the D&H AND to operate stack train service to NJ for CSXI. Most of the B40s were financed by CSX. The SD70Ms were long after NYS&W was done with the D&H and were financed with the help of New York State to preserve the Q’s IM franchise.
Well, at the Anderson’s elevators in Maumee, Ohio, you never know what’s going to be sitting in the yard. Before CR was split up, you saw almost all NS stuff there, mostly GP-60’s, a few older units, SD-40-2’s being common. Once in a while, you saw a new NS Dash-8, and then all of a sudden, a whole bunch of new big stuff was in there, BN SD70 MAC’s, in the “green and cream” scheme, then pumpkin Dash-9’s, NS Dash-9’s, and the most insane, the former CR SD-80’s. I purposely drive past it on the way home from work, just to see what’s there, but lately it’s back to mostly SD-40’s and GP-60’s, with an occasional NS SD-70.and Dash-9. Foreign power seems to be getting rare. I saw a pair of BNSF Dash-9’s in the new lettering there a while back shoving some hoppers around. A friend of mine said he saw a CSX C60 moving cars around, but I’ve never seen one there.
=== I am not saying that their buying new ones today. I am saying like in 30 years could we see it. === So in 30 years, the profit margins on shortlines will have massively increased, but the prices of new locmotives will not have?
No, the SD70s will be 30 years old, and off the rosters of the class ones. Larry’s used locomotive broker business will buy them for 67 cents sell them to shortlines for a buck three-eighty.
Many of the responses here assume that Everything Will Stand Still Except Time. Why would anyone think that short lines 30 years from now will have much in common with short lines today, other than gauge? The economic niche that many short lines live in today is unlikely to stand still, rendering the question academic.
Well, to be fair, shortlines in some form or another, whether as a branch of a larger RR, as a spun-off secondary line, or independent by-passed and never incorporated into a larger line, have been around as long as they’ve been laying track (well, almost). They generally have taken cast off, older locomotives for the same reasons that today’s shortlines do.
It’s true that some of today’s shortlines are just squeezing the last drops out of a depleted franchise and some are alive only through the graces of state subsidy and lower labor costs - which could change over time, but 30 years hence, there still will likely be that “second tier” of railroad lines, not quite good enough for prime time, but still a place to squeeze the last miles out of older power.
Or, to rephase the original question: “Do you think there will be any economic life left to today’s new locomotives when their economic replacement as primary road fleet power is justified?”
You put it more elegantly than I, and yes, I agree (also with your earlier comments). To your rephrased question, yes, I think so. If we look back 30 years ago our imaginations were too narrow to conceive that short lines would someday roster SD40-2s and B30-7s, and now they do.
Many GP7’and '9s have reached significant longer service life (30, 40 or even 50 years) than expected from their original lease period of 15 years.
Would the equation shift towards new power of the 1500 - 2000 hp size if shortlines can lease locomotives based on longer service life, say 30 years? Or if there would be a market of 50-100 new locomotives a year for about 10 years?
The 15-year service life for locomotives is predicated on United States tax law. A statutory service life is needed to provide for depreciation rates which can affect tax liabilities.
oltmand wrote: === No, the SD70s will be 30 years old, and off the rosters of the class ones. Larry’s used locomotive broker business will buy them for 67 cents sell them to shortlines for a buck three-eighty. === Actually I agree with that. Regarding someone commenting that shortlines in the futuere will have little in common with those today, I have to say that they will have one important thing in common: they will be marginal businesses. All shortlines are. By definition, they are properties that Class 1s cannot justify operating, but which lower overhead companies can. If there are still shortlines in the future, they will still be operating on thinner margins than the Class 1s, regardless of the details of commodity, tonnage, or length. And since the basis of non-class 1 profits are keeping voerhead low, used locomotives will continue to be preferred over new. And that’s why SD70Ms and the like will have lives on shortlines and regionals.
Some short lines perhaps, but there are still several that were independently built and continue to operate. For example, take the Lancaster & Chester built to serve textile mills.
That doesnt necessarily make the entire business marginal…lower overhead means that with less income, they could even have the same “Margin” as the Class I’s.