What constitutes a typical shortline railroad? It seems like most either haul one commodity for a limited amount of customers, like grain or gravel; or handle switching operations in conjunction with a Class 1, usually in a confined area.
I’d say that pretty well sums it up. Mohawk, Adirondack & Northern (a GVT property) handles branchline work on three former NYC (PC, CR, CSX) lines in NY. I’d have to say that CSX could probably easily handle the work if they wanted to, but I doubt they want to dedicate the resources to do so.
I don’t know that I would call this “typical”. There are many short lines which would fit this description, but many which don’t. In the west, many shortlines commonly include many miles of trackage, and could not be called just “switching” operations. They also can haul multiple commodities for many customers. Nebraska Central would be a good example of a western short line like this.
There’s also a distinction that needs to be made between “short lines” (which are typically “Class III” railroads) and “regional railroads” (which can either be Class II or Class III roads). Examples of “regional” roads would include Iowa Interstate and (before its acquisiton by CP) DM&E.
In very general terms, I would say that a “short line” is most often a Class III road which provides a service very similar to branch line or switching services performed by Class I roads, and is compensated under various kinds of marketing arrangements with Class I roads whereby the Class I ppays the short line a fee for its service, but the short line doesn’t have a say in the pricing of the traffic to the customer. A regional road, on the other hand (whether a Class II or Class III road), will typically be performing a secondary main line service with longer hauls than a shortline, and is more likely to establish rates for its services the same as Class I’s do. But these are gross generalizations with plenty of exceptions.
How do they make the distinction between a Class ii and a Class III railroad?
I would say the total Revenue.
Annual carrier operating revenue. It’s an STB classification system set out in their accounting rules, 49 CFR Part 1201, General instruction 1-1, but it’s widely used for other purposes as well. The thresholds stated in the regulation are as follows:
Class I - More than $250 million
Class II - Less than $250 million, but more than $20 million
Class III - Less than $20 million
These aren’t the precise current thresholds, because there’s a “revenue deflator formula” applied, but they’re close enough for present purposes.
Railroads operated as a part of a single rail “system” are classified according to the system revenues.
There are as many Short Line business models…as there are Short Lines. Each is based on the needs of the customers they serve. In some cases that is a handful or less, sometimes it could be 30 or 40. Keep the customers in business and shipping and receiving freight by rail and the Short Line stays in business…if the customers business fails the Short Line is then set up to fail.
Some shortlines like the 18 mile Guelph Junction Railway do quite well and are critical to the communities they serve. Both CN and CP gave up on Guelph, Ontario a dozen or so years ago, and Rail America (via the Godrich and Exeter) and the City of Guelph stepped up to the plate to fill in the vacuum. Since they came in the trains have gotten longer, and it appears that the rails are handling more freight than ever before…or at least in a long time. The Guelph Junction Railway may be atypical in that they appear to have a fairly diverse customer base inspite of their small size.
I alos notice that when I go home to Sherbrooke, QC…the regionals there (CN and CP gave up on Sherbrooke too) appear to be doing well…trains are long again…in the last years of CN or CP trains were typically a locomotive, 3 boxcars, and a caboose…now it is common to see long 100 plus car trains again.
The revenue distinctions, as explained above by Falcon 48, is as good a definition as one will find, and is the designation used by most. In the book Small Railroads, produced by the Association of American Railroads (AAR - 1982), the authors spend the entire first chapter discussing the different possible definitions. They note that the initial confusion over what constitutes a short line began about 1916 when, in a hearing before the ICC, a witness included the fact of “less than 100 miles” in his definition. The argument began. For that book, the AAR defined a small railroad as: “a Class III line-haul or switching and terminal road with annual revenues of $10 million or less (the income standard at that time). Eliminated from this definition are stockyard companies, electric roads, and railroads designated by the ICC as lessors. Also excluded are Class II railroads, even though many of these carriers belong to the American Short Line Railroad Association.”
Bill