Back a while ago on “Trains Tube” Trains interviewed Roy Blanchard, the “Shortline consulatant”.
One of the questions was, “Where do you see the shortline inustry going in the next 5 years?”
Roy answered that he thinks that 60% of shortlines will dissapear in those next 5-10 years.
What do you think about this, the railfans and railroaders?
I’m guessing he means through mergers and acquisitions, not meaning that 60% of the track is going to disappear.
Yes, I know that and that was what I was implying. But regardless if they are merged or aquired, 60% of the actual shortlines will no longer be around, that is, with their current name and company.
No, he was predicting 60% of the shortline mileage will disappear in the next 5-10 years (with the premise there is no change in regulation, public funding levels, traffic patterns, or the general economic activity of the U.S.). That’s because the track and bridge infrastructure is a legacy investment that has not been reinvested in on much of the short line mileage due to lack of revenue and profit, and absent reinvestment it will either be used up, no longer capable of supporting the loadings, or economically obsolete, or all three.
RWM
People are always predicting the imminent demise of something - including ‘experts’ and ‘consultants.’
Far more often than not, history proves such predictions inaccurate.
My immediate question is, was the interview date before or after oil prices headed for low earth orbit?
Chuck
I think he is on to something. The CORP’s bumbling to the exit as their tunnels collapse is just another canary in the mine falling off its perch.
I also think that he’s pretty close to the mark. Consider the number of shortlines that were established in the wake of Conrail’s establishment in 1976. A fair number of them only managed to postpone the day of reckoning for two or three years.
RWM (with the caveats he lists) has pretty well nailed it. The deteioration of the infrastructures because of age and wear attributable, in part, to heavier axle loads will make many of them either inefficient or unsafe.
However, if some of RWM’s caveats are dealt with the number of short lines disappearing will be fewer.
An interesting example is the regional which runs thru town. Back in July the FRA inspected a segment and laid down 27 slow orders, mostly in the 10mph category. That is a lot of work to fix for a couple of trains daily.
ed
I hope I am not hijacking this thread–rather, I hope this slight derivitive conversation will add to the general content of the main post. But, from a completely novice perspective and from someone who doesn’t know much about anything, it seems to me that that Genesee and Wyoming puts a lot more into track maintenance and property development than their friends at Rail America.
To the extent I am wrong with this observation, please correct my ignorance. And, even if I am not accurate or precise in this observation, I don’t think it can be questioned that some short line railroads put a lot more in the reinvestment of their property than others.
I raise this observation because I think it is likely that Mr. Blanchard’s prediction is not going to be accurate because there will eventually be a bail out in some way shape or form from the government, because once it is realized how much loose-car business comes from shortlines, it will be understood that this traffic simply cannot be replaced by trucks.
Which brings me to my point/question:
Say next year–completely hypothetically speaking–Rail America announces that the infrastructure for 55% of its properties has reached a state that will render the lines inopperable. The government, recognizing this as a transportation disasster, creates some bailout program for RA and 30 other short line railroads that basically amounts to a combination of (1) grants; (2) extremely-low interest loans; and (3) tax reductions (all of which we have already made their way onto the scene in some way, shape, or form, which is why I disagree with Mr. Blanchard’s prediction . . . the bailout ball seems to already be in motion).
Anyway, if I am the proverbial G&W or the other short line regional railroads that moved mountains with limited resources to keep their property viable, I would feel perfectly justified screaming foul. Why should RA be allowed to put 20 years of earnings in the
Two companies, two philosophies, two realities. two attitudes about government, two operating plans, two forms of corporate governance , and two ideas.
Sounds very American to me
Roy Blanchard is probably one that could appreciate being called a prophet on this one, right or wrong.
My 2 cents
PL
You may be correct that a public cash infusion of some type will occur. However, if there is traffic that is so heavy that it cannot be replaced by truck, then the traffic is usually heavy enough to justify private reinvestment in the short line. The problem occurs when the traffic is insufficient, and that’s what Mr. Blanchard refers to.
[quote]
Which brings me to my point/question:
Say next year–completely hypothetically speaking–Rail America announces that the infrastructure for 55% of its properties has reached a state that will render the lines inopperable. The government, recognizing this as a transportation disasster, creates some bailout program for RA and 30 other short line railroads that basically amounts to a combination of (1) grants; (2) extremely-low interest loans; and (3) tax reductions (all of which we have already made their way onto the scene in some way
Roy hasn’t gotton this much attention since he had an automobile run over by one of his short lines trains back in the early 90’s in North Carolina.
To make a point of course, a very good point.
Stay safe, and we all go home,
PL
I think the deciding factor will be the price of oil. If it gets high enough long enough, increased traffic and perhaps goverment incentives may come into play, making rebuilding feasible.
Energy and its application: Both a blessing and a curse.
Roy has many interesting things to say about short lines. One should, however be circumspect about any broad statements by consultants.
LC
Some shortlines seem to be very successful, but so did a lot of regional lines, and it seems they always end up being taken over. I remember some years back a lot of people in the “Trains Turntable” column predicting the eventual disappearance of railroads altogether. Thankfully its an industry that can change and still be successful.