I watched an old promotional film about the Nickel Platerailroad last night. What struck me, was that the Nickel Plate (The New York, Chicago & St. Louis) seemd to be covering the same market and same routes asboth PRR and NYC. What did Nickel Plate do differently to compete succesfully with two 800# gorillas that also had trunk lines to the east coast?
The fact that the old promo film did not answer that obvious question speaks volumes as to why Nickel Plate did not survive…isn’t the purpose of a promotional film to promote? Thus they appear to have failed… no doubt thousands of shippers were asking themselves the same question you’re asking here today…
Then as now…the problem with promotional material is that it doesn’t answer the big question: why should I use your services? i.e. what sets you apart from your 800 lb gorilla competitors?
The promo film might not have explained the Nickle Plate forte, but they were a very successful railroad Post WW2. If you had bought stock in the company at its low in 1946, and then sold when the N&W bought them you would have had a return of 1000% (that is not a misprint). NKP was the Charlie Hustle of the railroad world moving time sensitive freight from western gateways to Buffalo and Pittsburgh, plus coal traffic from fields in SE Ohio. The New York Central and the Pennsylvania were nearly bankrupt when they merged, the NKP was profitable when the N&W bought them for access to Chicago, and to diversify its revenue sources.
To complete the picture - it was worse than that, even. At the western end, all 3 - NKP, PRR, and NYC - went to both St. Louis and Chicago - as did the B&O; and the Erie got part way across Ohio, well into NKP territory. All reached 1 or more major east coast ports - except for NKP, which got no closer than Buffalo.
That said, here’s my short list of how the NKP did so well - mostly pre-Berkshire era, too - in no particular order:
- Not really encumbered by significant passenger operations, and no commuters;
- Blanketed the MidWest US industrial base in Ohio, Indiana, and Illinois, with good access to the Detroit market as well - pretty much the same as PRR did in Pennsylvania, and NYC did in New York and the northern portions of Ohio, Indiana, and southern Michigan - so there was a lot of originated traffic;
- Good connections with a lot of Class II and ‘regional’ lines in the area to supplement its own coverage - DT&I, AC&Y, the other ex-Gould empire roads, etc.;
- Also lots of natural resource exploitation in its territory back then - coal, oil, natural gas, etc.
- NKP was a classic example of a ‘bridge line’, and turned that potential disadvantage - being dependent on connecting carriers on both ends - into an advantage, by ‘leveraging’ those connections as alternative routings for its customers. At the eastern end (Buffalo), that was mainly LV, Erie, and even the NYC and B&O;
- Not a lot of big huge yards to accumulate cars, per diem charges on them, inflate the ‘dwell times’ while they sit there, or taxes either;
- That, plus a single track main line meant trains had to be kept moving at a consistent speed to keep it all fluid;
- Mostly east-west mains, so the management and resources stayed focused on that - not diverted to branches, other routes and mains, etc.;
The NKP succeeded because of its connections, DL&W and LV in Buffalo especially, to the New York and Boston Harbors (via DL&W-D&H-B&M). They had an aggressive marketing program and an aggressive operation that, despite single track and paralleling the NYC east to Buffalo… They dieselized early despite Lima superpower Berkshires…which were great unto themselves. Both the eastbound connections LV and DL provided passenger connections with through sleepers and coaches plus valuable merchandise (and later piggy back) services. Both road’s provided D&H-B&M connections through Bingahmton for freight services, too. You might say NKP-DLW/LV-DH-BM was a Northern Alphabet Route. Even Norfolk and Western’s ownership of NKP kept both EL and LV with plenty of traffic in later years…in fact, despite NW owning Dereco which owned EL and D&H it still maintained Caneaut OH. to Sayre, PA run through via the LV!
Perhaps the simple answer is that they did one thing, and did it well…
But what was that one thing they did so well?
High speed bridge route - time has ALWAYS been money.
Chuck
The Nickle Plate was as Paul North and Henry6 said: It was the consummate BRIDGE LINE! They took freight from railroads on one end and ran it very quickly to the other end!
That eliminated the need for things like Classification Yards and expensive facilities.
They bought equipment that could facilitate what they did QUICKLY! Like the Van Swearingen ‘Berks’ made on-line by Lima Locomotive Works; they bought ALCO PAs
They had a reputation in the industry for being Fast and Good. Their employees were pretty motivated, and had solid, positive opinions of Their Company![2c]
Interestingly Erie Lackawanna was also thought of as a bridge line, however it seemed to flounder, even when its own 800 lb gorilla competitor (Penn Central ) was sick and dying… In what ways were EL and Nickel Plate different?..they both served many of the same markets…they both had worthy and much larger competitors… what happened?
I think NKP picked up a lot of traffic blocked by the originating roads and avoided their classificatiion points. NkP would move stuff from Buffalo (A) to Chicago (C) or St. Louis (D) faster than the big guys could through their intermediate train shuffling or parking space yards. Not many grades in the territory for all.
When Lima put the Berks on the road, well… that was a fit. “The Fast Freight Line” wasn’t just a promo: the shippers obviously learned the road delivered.
The improble,legendary, successful Nickel Plate. Pass me the plate Deacon and I’ll invest a nickle in that kind of road.
Sounds kinda like the hustling rails today.
Rick
The EL was a sort of side by side merger with an extension. The side by side dragged it down, taking the Buffalo stuff and sending it west saw a certain amount of traffic lost, PC’s burning bridge across the Hudson removed an important bridge route role, and a wet and wild lady name Agnes blew into town and left the rairoad devastated. The DL did the NKP well, but the EL alongside it took traffic off NKP without going to Buffalo. NKP was swallowed up by N&W along with the Wabash; while N&W owned Dereco which owned EL and D&H, N&W still seemed to favor LV in and out of Buffalo. The complexities of railroad interchanges in the East are hard to imagine and untangle at this time. CR cleared a lot of those interchanges off the map that makes hard to remember…but the PC merger and its failures are key to today’s rail picture in the East.
Erie (not EL before 1960) had lots of commuter operations in New York and New Jersey, managed to miss all the Industrial centers between Youngstown, OH and Chicago. Maybe you are aware of it or not, but Chesapeake and Ohio, Nickel Plate, Pere Marquette, Hocking Valley, and the Erie were during the 1920’s and early 1930’s controlled by the Van Sweringen brothers Orris P. and Mantis J. Managerial talent was pooled between the companies, and the brothers intended to merge these companies. After early favorable rulings by the ICC on lesser matters, the commission in the end dramatically rejected the proposed merger. The Erie slipped into bankruptcy and control was lost. The Hocking Valley was merged into the C&O. The Nickel Plate had always been a profitable well run railroad, but the brothers had used it as the cash cow to build their empire and so by the early 1930s it was staggering under a tremendous amount of debt. To give you an idea of just how efficient it was, in 1930 it had a Transportation Ratio of 34.59 %,. In March 1933 with Perishable and Meat traffic down by 84%, and Merchandise traffic down by 75% it still managed to post an Operating Ratio of 75%, which would be respectable today. In March 1933 at the darkest hour John Bernet, who had previously been NKP President, again took the company helm. He was concurrently also the President of the C&O and the PM. His first action was to order the scrapping of every surplus freight car, 7158 of them 40% of the fleet, and every surplus locomotive 156 of them 34% of the fleet. With that money he replaced all the obsolete bridges on the line to St. Louis that prevented the newest power from operating to there, he bought 25 larger tenders for the newest Mikados to extend their range between coaling and water stops, and generally upgraded the remaining power. In just four months he drove the Operating Ratio down from a respectable 75% to an Outstanding 59%. That combined with the fact that C&O favored the NKP with its coal traffic bound f
I think you have it backwards. The Plate DID (and does) survive (albeit under a different name), having been purchased in toto by N&W, a larger carrier with extremely deep pockets. In contrast, the Erie Railroad, the former Erie Railroad, is a glorified bike path hundreds of miles long between New York’s Southern Tier and Chicago. In starkest contrast, the Plate main line lives and thrives to this day, seeing intensive use from NS. If the Plate were in as poor physical shape as EL fell into, N&W wouldn’t have touched it with a barge pole, much less sunk a good deal of scarce capital into its purchase. I would argue that their purchase constituted not failure but a great success by their management; namely, achieving the highest price for Plate shareholders.#### To summarize why the Plate prospered, it provided consistent, fast service, and shippers loved it.
The promo looked to be from the early 50’s. The tone of it reminded me of movies we used to watch in grade school for social studies.
To be honest, it looked to promote the Nickel Plate by showing it in the best light possible. My impression, is that it was a film that would have been shown to prospective customers around 1950. For it’s time, it was probably par for the course. That’s no differerent than how things are presented nowadays…except now, all the info would be presented off a stupid, boring power point presentation that the presenter would read off the screen word-for-word.[banghead]
As has been mentioned above, I understood the Nickle Plate to have been a fairly healthy railroad when NW bought it, in spite of the competition. That’s what caught my eye.
I have been away for awhile and apologize for the late entry.
NKP was a healthy railroad when mergered into the NW in 1964. In it’s last full year of operation (1963), NKP had revenues of $132.5m with an OR of 74.3 and net income of $10.5m. While these were decent numbers, the trend was not positive. Revenue peaked in 1956. In that year it’s revenue was $174.5m and net income tallied $16.3m.
By comparison, NW’s revenue in 1956 was $239m (net $42.5) and in 1963 was $267m (net $68m). The NW picked up about $40m per year in revenue from the Virginian merger in 1959.
Let’s face it, NW hauled coal, and most of it downhill. It PRINTED $$$. In 1954 NW generated 71% of tonnage and 58% of its revenue from coal. NKP hauled quite a bit of “product of mines” - roughly 47% of tonnage and 23% of revenue. Quite a bit of coal came off of the Wheeling and Lake Erie, which NKP leased.
Moody’s states the obvious " The Nickel Plate is a bridge line carrier. Prior to the leasing of W&LE, over three-fourths of its total tonnage and all its coal traffic was received from connections. NKP/WLE operated over 2100 miles of track with 175 miles of double track and 692 miles of CTC. All single track between Buffalo and Chicago was CTC.
As stated previously, NKP didnt run many passenger trains or commuter trains. Nor did it operated east of Buffalo. These two factors enhanced their financial status and allowed them to maintain profitability up to the merger with NW.
Today, the NKP line from Chicago to Ft. Wayne ( I live in Valparaiso near the former NKP line) sees about 20-25 trains daily, up significantly from the pre-Southern merger, but down from the Conrail merger, when train movements approached 35-40 per day (the line was pretty much tied up - CTC single track with 6000 ft sidings). The line sees several intermodals daily, including Triple Crowns. There are 1-3 loaded c
Note to billio: “The Plate”? “The Plate??” I enjoyed reading and agreeing with your comments, but…“The Plate?” I have never, ever in 60 years heard the NKP referred to by that moniker. Where on earth did that come from?### You’re right, of course, about the Erie being a bike path and the old NKP still busy. But I sure do love that bike path.
NKP guy asks:
When I worked at the EJ&E in the mid-1970s, my boss referred to the NKP as “the Plate,” both in memoranda and in conversation. The Plate was one of our eastern connections, and a good (valued, reliable) one at that. I now gather from your question that the name must have been strictly an in-house reference. It was not meant in any way but respectful – unlike certain other roads which shall remain nameless.#### Anyway, that moniker has stuck with me, even after it was gobbled up by the gorilla from Roanoke which wouldn’t have know a merchandise train if it bit it in the butt. But that’s another story…
billio:
Would you care to describe the interchange situation with the Plate at the time? Was it all handled at Van Loon? What was the nature of the interchange? Coal for the mills? Today, there is considerable interchange between the J (sorry CN) and NS at the Van Loon junction. Solid coal trains are handed off.
What was the nature of the steel coil traffic between the two? Today there is a daily train operated from NS Ft Wayne to Van Loon with the return train a solid coil train. Somedays it is as many as 70 cars, other days as few as 5, but generally about 30 or so.
Ed