I have no hope of actually running a short line anytime soon but as as a railroad enthusiast who has been certified As a brakeman and a conductor for small historic Railroad this is fascinating! Thank you for the wisdom and hard work editing you put into posting this!
And a sincere thank you for your comments. I try to make it worth your while to watch. I would always tell short line wannabees that it is not for the faint of heart.
Great video... many thanks for explaining some of the details involved in running a railroad. What I took away from your video; the thing that really surprised me most was the condition of the track in the USA... it's only one step from scrap metal, lol. I'm based in Europe and I have never seen track like you have over here.
You are seeing branch line track that supports a small train two or three times a week, usually at 10 m.p.h. The lines are usually 20-30 miles so the train can make a round trip in a day so no one feels any need to make the track faster. The lack of money being invested in a line is usually what keeps it around.
Fantastic info... Were you a manager at the WC / CN? Also, from the mechanical side (from a different class 1), the maintenance that is necessary for cars and motive power on a shortline is also not easy to figure out... All it takes is for the FRA to show up and take exception to something on your power, and the unit might be sidelined... inspections, overhaul schedules, and servicing all need to be figured out. Supply and logistics for fuel and parts can bankrupt a shortline before they ever turn a wheel! Even if you lease your locomotives for a start-up short line, you have to know HOW to keep them maintained... If a locomotive has to be moved over a connecting class 1to a home shop and doesn't meet the interchange requirements, it will sit and rot... That Nicolet Badger Northern unit in upper WI has been sitting unmoveable for decades because the shortline wouldn't pay for the necessary repairs to make it interchangeable!
Would you mind expanding on the thought or potential operators being tourist railroads? There are a few in Michigan that operate on Class III and Class II lines with special permission but will still occasionally swap crews to their locomotives and spot a spur or two. No one has ever really explained how a tourist operation can interchange so well with a larger than shortline railroad.
Not sure I completely understand the question but if anyone is spotting an industry, they have to be a STB-sanctioned "railroad". And if they are, then it is easier for them to operate on other railroads. But that said, tourist operations can still operate on "railroads", just as private operators can also operate across "railroads". Not sure if I answered the question....
Ya got me - and I gotta admit my ears hear it that way too sometimes. I hoped that everybody would hear it as it was meant. I'll try to annunciate better next video.
Starting a short new line railroad takes a lot more planning and knowledge about how railroads interact with each other and their customers. (26 June 2024 at 0031 CDT)
Starting a shortline has been a lifelong dream of mine. My plan is to move my non-railroad business into a rail-served building and start gaining experience as a customer and maybe do the occasional transload. From there, maybe start building a small lease fleet of equipment, which will further help with experience and contacts. Hopefully after several years I'll have a team that only does rail stuff, enough equipment to run a small railroad, plenty of info coming in from unhappy shippers, and maybe even a little money to do it. Do you see Class 1s being more and more reluctant to shed potentially viable branch lines?
Well actually what some parties do is take the industrial track that serves an industry and convert it into a railroad. That way you don't have to acquire any track from the serving railroad - you just need a willing industry. But you have to be careful because there are downsides to doing this too.
This is a very interesting video and I would certainly love to hear more about this topic and ones like it. I have had some ideas about how to better utilize certain lines,improve service and frequency, and ease congestion. I never really took these ideas anywhere. I certainly don't have the capital to actually take them anywhere anyway...
Thank you for this video. I really enjoy learning about this side of railroading. CZcams has a lot of enthusiasts that focus on their favorite engine or rail line, but most of them don't have the knowledge of the operations or business side of the industry. I've heard that some class I's focus a lot on their operating ratios for their shareholders. That's why PSR has become more widespread. I've also heard that railroads will sometimes drop a line or service if the service yields a lower return than desired, even if it is still a profitable operation. Does that factor into shortline proposals, and if so, how?
One common reason for a large railroad to sell a line off is if track condition is so bad the line needs a major rehab and the owner doesn't think the traffic base is worth spending the money. Or maybe a bridge needs replacement. It is hard to determine exactly what a branch line is generating as far as a ror. It is fairly easy to determine the cost to operate a branch line, especially if it is served by just a local train. But determining how much revenue to apportion to the line gets tricky. A rail shipment will move over several line segments. How much revenue does the branch line in question get apportioned? Formulas have been created, as you gotta do something, but different formulas exist.
Business is one,but it all comes down to service,which they specialize in.Class 1s just want to haul it away.Thats it.We could go on with this,but thats what I see.
I did too. Enjoyed them. He had already started up the railroad when he began making videos whereas my angle is prior to starting up - how to get selected.
@@killerbee6310I believe his business plan was car storage, correct? I recall he specialized in car repair and fixing private track derails prior to the (very) short line.
Depends on who the owner is and their outlook. They might want somebody that generates freight carloads. And in many cases they want to deal with known reputable entities. They also have undoubtedly had parties previously come to them with passenger train pitches - we certainly got them. First, see if you afford the insurance.
You have to consider how much insurance is going to be, plus other expenses vs ticket sales for which is essentially the most expensive amusement ride you can offer. New tourist operations without any other income is a very railfan idea and not so much business savvy
Having done it, the best way to have 1 million dollars from starting a shortline is to begin with 5 million dollars.
Yep - also heard the rule of thumb is make up your start-up budget...then double it.
A lot like farming and trucking..
So if a lumber co gets a car load of lumber,how much is the railroad bill?
@@Peter-mt6lg all depends on the distance coming from but "thousands" is a realistic answer.
I have no hope of actually running a short line anytime soon but as as a railroad enthusiast who has been certified As a brakeman and a conductor for small historic Railroad this is fascinating!
Thank you for the wisdom and hard work editing you put into posting this!
And a sincere thank you for your comments. I try to make it worth your while to watch. I would always tell short line wannabees that it is not for the faint of heart.
Thank you!
Enjoy learning about the business side of railroading.
As I enjoy discussing the business side.
Great video... many thanks for explaining some of the details involved in running a railroad. What I took away from your video; the thing that really surprised me most was the condition of the track in the USA... it's only one step from scrap metal, lol. I'm based in Europe and I have never seen track like you have over here.
You are seeing branch line track that supports a small train two or three times a week, usually at 10 m.p.h. The lines are usually 20-30 miles so the train can make a round trip in a day so no one feels any need to make the track faster. The lack of money being invested in a line is usually what keeps it around.
This video is spot on! As a Traffic Manager and a former railroader on both the sales and operations side.
Appreciate the validation!
@@killerbee6310 No thank you! Look forward to more content.
Fantastic info... Were you a manager at the WC / CN?
Also, from the mechanical side (from a different class 1), the maintenance that is necessary for cars and motive power on a shortline is also not easy to figure out... All it takes is for the FRA to show up and take exception to something on your power, and the unit might be sidelined... inspections, overhaul schedules, and servicing all need to be figured out. Supply and logistics for fuel and parts can bankrupt a shortline before they ever turn a wheel! Even if you lease your locomotives for a start-up short line, you have to know HOW to keep them maintained... If a locomotive has to be moved over a connecting class 1to a home shop and doesn't meet the interchange requirements, it will sit and rot... That Nicolet Badger Northern unit in upper WI has been sitting unmoveable for decades because the shortline wouldn't pay for the necessary repairs to make it interchangeable!
Not to mention that because of the issues you list, many short lines incur the expense of keeping a back up unit on the property.
This is absolutely fascinating. Thank you for sharing your knowledge.
And thank you for watching and commenting
I have never heard that sort of inside information. It was really interesting. Good Work!
Thank you. Eventually there will most likely be a sequel - a lot left unsaid....
There is one that started in Columbus Ohio about four years ago.
Would you mind expanding on the thought or potential operators being tourist railroads? There are a few in Michigan that operate on Class III and Class II lines with special permission but will still occasionally swap crews to their locomotives and spot a spur or two. No one has ever really explained how a tourist operation can interchange so well with a larger than shortline railroad.
Not sure I completely understand the question but if anyone is spotting an industry, they have to be a STB-sanctioned "railroad". And if they are, then it is easier for them to operate on other railroads. But that said, tourist operations can still operate on "railroads", just as private operators can also operate across "railroads". Not sure if I answered the question....
Very interesting look into what goes on behind the scenes of railroading, thank you for sharing!
Misheard the start of the video as "Hey, fellow former friends" and was wondering what I'd done to upset you! 🤣
Ya got me - and I gotta admit my ears hear it that way too sometimes. I hoped that everybody would hear it as it was meant. I'll try to annunciate better next video.
Starting a short new line railroad takes a lot more planning and knowledge about how railroads interact with each other and their customers. (26 June 2024 at 0031 CDT)
And more and more, it is on the electronic side.
Starting a shortline has been a lifelong dream of mine. My plan is to move my non-railroad business into a rail-served building and start gaining experience as a customer and maybe do the occasional transload. From there, maybe start building a small lease fleet of equipment, which will further help with experience and contacts. Hopefully after several years I'll have a team that only does rail stuff, enough equipment to run a small railroad, plenty of info coming in from unhappy shippers, and maybe even a little money to do it. Do you see Class 1s being more and more reluctant to shed potentially viable branch lines?
Well actually what some parties do is take the industrial track that serves an industry and convert it into a railroad. That way you don't have to acquire any track from the serving railroad - you just need a willing industry. But you have to be careful because there are downsides to doing this too.
A few short lines have been reacquired by class 1s in recent years. But my speculation is hard times are coming.
Interesting topic made more interesting by your "insider" stories. Thanks for sharing!
Glad you enjoyed it!
Very interesting, please leep it up!
I shall - thank you for the inspiration
Awesome video, so many questions answered.
Excellent - glad to hear that.
great video sir, i always wonder what it cost to make a short linethanks again
Great video, I've always wanted to know how you started a Railroad company. I love the content. Keep up the good work. From your new subscriber ✨️
Thank you very much for taking the time to comment - and Subscribe !!
This is a very interesting video and I would certainly love to hear more about this topic and ones like it. I have had some ideas about how to better utilize certain lines,improve service and frequency, and ease congestion. I never really took these ideas anywhere. I certainly don't have the capital to actually take them anywhere anyway...
Ya, starting up a short line can be a black hole for money if you haven't done good due diligence. Plus insurance - especially if you handle hazmat.
Still a better investment than starting an airline
Yes - a very high barrier to entry for any competitors, unlike with airlines.
excellent video as usual Brian!!
never knew what it took to start up a branch line railroad. next video be about motive power perhaps?
LOL-that and a million other things....
@@killerbee6310 keep it up! they’re a blast to watch
@@andrewgray986 And make !!
@@killerbee6310 yep!
very interesting
Glad you think so!
Thank you for this video. I really enjoy learning about this side of railroading. CZcams has a lot of enthusiasts that focus on their favorite engine or rail line, but most of them don't have the knowledge of the operations or business side of the industry.
I've heard that some class I's focus a lot on their operating ratios for their shareholders. That's why PSR has become more widespread. I've also heard that railroads will sometimes drop a line or service if the service yields a lower return than desired, even if it is still a profitable operation. Does that factor into shortline proposals, and if so, how?
One common reason for a large railroad to sell a line off is if track condition is so bad the line needs a major rehab and the owner doesn't think the traffic base is worth spending the money. Or maybe a bridge needs replacement. It is hard to determine exactly what a branch line is generating as far as a ror. It is fairly easy to determine the cost to operate a branch line, especially if it is served by just a local train. But determining how much revenue to apportion to the line gets tricky. A rail shipment will move over several line segments. How much revenue does the branch line in question get apportioned? Formulas have been created, as you gotta do something, but different formulas exist.
Business is one,but it all comes down to service,which they specialize in.Class 1s just want to haul it away.Thats it.We could go on with this,but thats what I see.
Like I said - what can you as a short line do differently that the Class one can't (or won't)
For that grain elevator, how much would it cost to add tracks to store and stage 75 more cars for a 100 car train?
I don't think you could have - the elevator is in town and kind of hemmed in - isn't really possible.
If I ever had that kind of money I would do it but narrow gauge instead it’s a little cheaper I believe
That was the idea at least when railroads were first laid as narrow gauge....
Without a firm customer base, any shortline will fail. Track condition notwithstanding.
Assume you have heard of the 100 revenue cars/mile "rule of thumb?"
If i had to start a short line, will it be possible to have EMD E and F units as my main source of power? I know silvis has alot of those units.
You can use anything that runs.
i checkout East Terminal Railway in Ohio
I did too. Enjoyed them. He had already started up the railroad when he began making videos whereas my angle is prior to starting up - how to get selected.
@@killerbee6310I believe his business plan was car storage, correct? I recall he specialized in car repair and fixing private track derails prior to the (very) short line.
What if I want to start an excursion, scenic railroad on a seldom used line through the mountains. Do all of the same principles apply?
Depends on who the owner is and their outlook. They might want somebody that generates freight carloads. And in many cases they want to deal with known reputable entities. They also have undoubtedly had parties previously come to them with passenger train pitches - we certainly got them. First, see if you afford the insurance.
You have to consider how much insurance is going to be, plus other expenses vs ticket sales for which is essentially the most expensive amusement ride you can offer. New tourist operations without any other income is a very railfan idea and not so much business savvy
@@joeymartinez224it’s just a hypothetical. I enjoy those train rides wherever I find them
The audio seems a little quiet/ off .
I was wrestling with that issue but thought I had it loud enough. Thanks for the feedback.
@@killerbee6310 While the volume varied a little bit here and there, it was plenty loud enough here. No issue understanding.
@@ramblinman4197 Whew - thanks !!
It sounds hopeless- why bother ?
I would always tell people it wasn't for the faint of heart.