As the owner of a short-line holding company that is about to get involved in 3 railroad acquisitions, this series is accurate of what my railroads look at. 😂
@@gingeronrails We’re a holding company that is currently pursuing 3 acquisitions. One in Colorado, 1 in Ohio, and another is underway, so we can’t mention it due to NDA constraints.
Love these videos. So many different things to consider and I have worked for Contractors, Shortlines, and Class 1's all as a conductor. Really interesting to see what opptertunities arise.
@@killerbee6310 Chesapeake & Delaware got a grant and opened a subsidiary "Delaware & Raritan river railroad" and with that grant tied two railroads together by reconstructing about 5 miles of abandoned and overgrown track which saw no use since the seventies. Us railfans chase some of the longer trains there and back from Jamesburg NJ to Lakewood. I was wondering how they made any money from the handful of customers they have.
Love your content. And fantastic photography mate! Really nice stuff in some less frequently photographed locations. thanks so much for sharing! - Coxy
I was a conductor for 10 years on a class 1 and got seriously injured in a head on train crash (that wasn’t my fault, other train crew at fault and they got killed unfortunately). Still, I would enjoy owing my own railroad.
I was just thinking to myself today or yesterday about your last video, wondering if/when the sequel would come out. Low and behold, I get home from work and here it is at the top of my feed. Very informative!
@4:30... i was looking at CP Rails accessorial charges page on line... they charge $570.00/hr, "when a customer requires an additional delivery on a scheduled service day... if a new crew is required, a minimum of 8 hrs will apply"... well... looks like CP rail burned their copy of "kinder/gentler"
Not a bad rate. So if I switch a lumber facility and bring in three loads and pull three empties. Then the customer wants me to bring them three more cars on the same day instead of waiting a day. That means digging the cars out of the serving yard, taking them to the customer and returning. Let's say it takes an hour to get to the customer. So we're talking about approximately 3-4 hours of a two man crew on overtime plus the locomotive and fuel costs.
@@cdavid8139 *Not a bad rate* i guess if it's just the 570 bucks... if a new crew is needed then the lumber yard has to pay a minimum of 8 hrs X $570.00 ($4560.00)... if that's the case, i'd suggest waiting till tommorow... LOL... auto assembly plants are known for doing this as well... i've been party to a "second switch" at the now torn down GM plant in Janesville wis... we'd do just as you described, cherry pick one lone parts car out, sprint up there and spot it... we called that a "shutdown car" move... GM said for every 5 minutes their line was shutdown it cost them 50K so ANYTIME gm said jump, we didn't even ask how high, we just started jumping
@@killerbee6310 *the railroads had it down to a science first* you got that RIGHT... one of NS customer complaints about PSR was that they were getting their cars a day early... now the car/s sitting in the yard an extra day... more demurrage/storage loot in the railroads pocket
Some thoughts. The 100 per car per mile is a well-known stat but only a rough-rough guide. A 10 mile line moving 1000 carloads of rock a year may be far less viable that the same line moving 1000 carloads of chemicals. The daily service decision is not always car-hire related. With over 50% of the nation's traffic moving in private cars there is a good chance that car hire cost will not factor into the decision as to how often to run. Very few start-up shortlines have much of an IT worry. Software is available for shortline operators to manage their operations at very reasonable pay-as-you-use rates. There are a couple of well-known systems that are easy to set up and use. This software can be used both in the office or by remote crews and also handled most accounting functions and industry reporting.
I don't disagree with anything you say. I didn't have the time to cover all scenarios (well, I do have the time, but I would lose my audience I am afraid.) I know some short lines that structure their relationship with the partner Class Ones in such a way they almost have no IT responsibility. I am fascinated in how short lines approach costing. I knew one that seemed to have an inordinate number of locomotives. The owner told me he doesn't factor locomotive cost into his operating cost equation. HUH? They aren't free. Another CEO said that lacking a costing system, their determinant if a new large move was making money for them was whether they have more money in the bank at the end of the year then they did at the start of the year.
@@killerbee6310 You covered the scenarios extremely well. I was just adding a couple of points. The IT systems used by the vast majority of the shortlines are simple and easy to use and enable the shortlines to manage inventory, generate revenue and exchange data with the Class I roads. Of course their are exceptions. Costing is an issue that has puzzled many operators (and Class I roads) over the years. Congrats on summarizing the topic very well in a short summary.
The successful short lines seem to find a unique niche. Moving products that class 1s don’t want to bother with. Logs, livestock, scrap metal, ect. Be willing to haul anything, no matter how minuscule. Operate between points or cities that class 1s have long forgotten and be in a position where you are viewed as an essential service by the locals. That’s how you get tax breaks, federal operating grants, ect. Would you agree?
Yes, short lines have the drive and determination and flexibility to develop local moves captive to their own line. Then all facets of the move - service, pricing, optional services, car supply, etc are all under their control. Where things can unravel is the traffic that gets interchanged. A point I was trying to make in the video is the short lines portion of the rate is miniscule. Whether the move happens or not is determined by what the connecting Class One does with their portion of the rate. It is not unusual for a short line to identify business that could convert to rail, only to have the connecting Class One set a rate too high to swing it to rail. The 45G tax credit has been a lifesaver for short lines. And there are a lot of grants out there to be had at all levels (federal, state, local). It behooves one to be familiar with them - or partner with someone who is.
@@killerbee6310so a short line might move a car 30 miles and interchange with a class one which might take it 500 miles to a market then dead head the empty car back to the short line. I see why the class one gets the bulk of the rate.
@@killerbee6310 Car supply is usually (not always) determined by the Class I roads. True there are per diem leases and other opportunities, but that is not the norm. As far as short line rates are concerned, in general it will not be miniscule. Let's say I'm bringing in fertilizer from Canada to a distributor in South Carolina. CP and NS may receive 2000 a car each and the short line receives $500. This isn't miniscule given the Class I roads are doing the vast majority of the tonnage move. And it is true Class I roads will price the move out of the market. Just normal business decisions. At the end of the day both parties need to make a profit. As far as 'lots of grants'...maybe. But there are hundreds of short lines going for those grants
It sounds like you could make some money by being a consultant for people wanting to start a short line. Then maybe projects like the East Terminal Railway, here on YT, will succeed more.
I always wish I could see people's business plan. As for the East Terminal, I am not sure if he is trying to make it a viable business, or if it is a passion/hobby.
@@killerbee6310 If I understand correctly, he was doing for business, and plans to shut it down soon. He never seemed to consult his fan club, which had more collective knowledge than he did. Also, he should have taken in volunteer labourers and sales staff.
@@killerbee6310 As I was scrolling down, I thought that I should create a short line business plan to help people see if they can create/support one. If I do do that, then would you be willing to help me, by answering questions, and looking it over?
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As the owner of a short-line holding company that is about to get involved in 3 railroad acquisitions, this series is accurate of what my railroads look at. 😂
Well thank you for the validation. And good luck with your endeavors.
What line?
@@gingeronrails We’re a holding company that is currently pursuing 3 acquisitions. One in Colorado, 1 in Ohio, and another is underway, so we can’t mention it due to NDA constraints.
@@officialFortherailswhere in Colorado? Can you say?
@@Chasingrail All I can say is it’s a well-known tourist railroad. I can’t say much more.
This series is brilliant and I am really enjoying it. Thank you for creating this series.
And thank you for watching it. Appreciate the comment !! More to come - it is just a matter of time.
Love these videos. So many different things to consider and I have worked for Contractors, Shortlines, and Class 1's all as a conductor. Really interesting to see what opptertunities arise.
Thank you - glad you enjoyed watching them and thank you for commenting.
great information
East Terminal Railroad has fascinating videos of their struggle to start a short line railroad
Indeed. I have watched a few. I would love to see his business case.
@@killerbee6310 Chesapeake & Delaware got a grant and opened a subsidiary "Delaware & Raritan river railroad" and with that grant tied two railroads together by reconstructing about 5 miles of abandoned and overgrown track which saw no use since the seventies. Us railfans chase some of the longer trains there and back from Jamesburg NJ to Lakewood. I was wondering how they made any money from the handful of customers they have.
@@killerbee6310 From what I've gathered, he has liquidated his equipment and property and moved on from it
Great series. Very interesting and well presented. Thank you.
Thank you. Keep an eye out for more. Us retirees have to keep busy.
Thanks for the wealth of information on this topic. Very interesting to hear about this.
Yep...now all you need is lots of money and you are good to go !!
Great video, in the next one could you talk about trackage rights and how they work?
I'll add it to the ever growing list. Thank you for the input.
Nice, the medford subdivision never really gets that much attention sadly, I wish they put it back in service
Love your content. And fantastic photography mate! Really nice stuff in some less frequently photographed locations. thanks so much for sharing! - Coxy
And thank you so much for watching and commenting.
I was a conductor for 10 years on a class 1 and got seriously injured in a head on train crash (that wasn’t my fault, other train crew at fault and they got killed unfortunately). Still, I would enjoy owing my own railroad.
Ouch - am sorry to hear.
@@killerbee6310 look up Hoxie AR train crash of 2014
I was just thinking to myself today or yesterday about your last video, wondering if/when the sequel would come out. Low and behold, I get home from work and here it is at the top of my feed. Very informative!
Timing is everything, And glad to hear The Almighty Algorithm is bosting the video.
It takes a lot of planning to start a short line from scratch. (Posted 3 August 2024 at 1728 CDT.)
Yes. And even with the best of planning the unforeseen will still arise....
@4:30... i was looking at CP Rails accessorial charges page on line...
they charge $570.00/hr, "when a customer requires an additional delivery on a scheduled service day... if a new crew is required, a minimum of 8 hrs will apply"...
well... looks like CP rail burned their copy of "kinder/gentler"
Everybody complains about budget airlines nickel and diming passengers to death but the railroads had it down to a science first...
Not a bad rate. So if I switch a lumber facility and bring in three loads and pull three empties. Then the customer wants me to bring them three more cars on the same day instead of waiting a day. That means digging the cars out of the serving yard, taking them to the customer and returning. Let's say it takes an hour to get to the customer. So we're talking about approximately 3-4 hours of a two man crew on overtime plus the locomotive and fuel costs.
@@cdavid8139
*Not a bad rate*
i guess if it's just the 570 bucks... if a new crew is needed then the lumber yard has to pay a minimum of 8 hrs X $570.00 ($4560.00)... if that's the case, i'd suggest waiting till tommorow... LOL... auto assembly plants are known for doing this as well... i've been party to a "second switch" at the now torn down GM plant in Janesville wis... we'd do just as you described, cherry pick one lone parts car out, sprint up there and spot it... we called that a "shutdown car" move... GM said for every 5 minutes their line was shutdown it cost them 50K so ANYTIME gm said jump, we didn't even ask how high, we just started jumping
@@killerbee6310
*the railroads had it down to a science first*
you got that RIGHT... one of NS customer complaints about PSR was that they were getting their cars a day early... now the car/s sitting in the yard an extra day... more demurrage/storage loot in the railroads pocket
@@cdavid8139
*Not a bad rate*
but that lumberyard better stay FAR away from that "new crew" rate... over 4500 bucks
Some thoughts. The 100 per car per mile is a well-known stat but only a rough-rough guide. A 10 mile line moving 1000 carloads of rock a year may be far less viable that the same line moving 1000 carloads of chemicals. The daily service decision is not always car-hire related. With over 50% of the nation's traffic moving in private cars there is a good chance that car hire cost will not factor into the decision as to how often to run. Very few start-up shortlines have much of an IT worry. Software is available for shortline operators to manage their operations at very reasonable pay-as-you-use rates. There are a couple of well-known systems that are easy to set up and use. This software can be used both in the office or by remote crews and also handled most accounting functions and industry reporting.
I don't disagree with anything you say. I didn't have the time to cover all scenarios (well, I do have the time, but I would lose my audience I am afraid.) I know some short lines that structure their relationship with the partner Class Ones in such a way they almost have no IT responsibility.
I am fascinated in how short lines approach costing. I knew one that seemed to have an inordinate number of locomotives. The owner told me he doesn't factor locomotive cost into his operating cost equation. HUH? They aren't free.
Another CEO said that lacking a costing system, their determinant if a new large move was making money for them was whether they have more money in the bank at the end of the year then they did at the start of the year.
@@killerbee6310 You covered the scenarios extremely well. I was just adding a couple of points. The IT systems used by the vast majority of the shortlines are simple and easy to use and enable the shortlines to manage inventory, generate revenue and exchange data with the Class I roads. Of course their are exceptions. Costing is an issue that has puzzled many operators (and Class I roads) over the years. Congrats on summarizing the topic very well in a short summary.
Hello, did they close the log yard in Mass city? love your video's
Thanks for these, Brian. I feel I'm back in your living room way back when.
Hi Bob - glad your finding them.
Jeez. Well I won't be starting up a shortline any time soon
The successful short lines seem to find a unique niche. Moving products that class 1s don’t want to bother with. Logs, livestock, scrap metal, ect. Be willing to haul anything, no matter how minuscule. Operate between points or cities that class 1s have long forgotten and be in a position where you are viewed as an essential service by the locals. That’s how you get tax breaks, federal operating grants, ect. Would you agree?
Yes, short lines have the drive and determination and flexibility to develop local moves captive to their own line. Then all facets of the move - service, pricing, optional services, car supply, etc are all under their control. Where things can unravel is the traffic that gets interchanged. A point I was trying to make in the video is the short lines portion of the rate is miniscule. Whether the move happens or not is determined by what the connecting Class One does with their portion of the rate. It is not unusual for a short line to identify business that could convert to rail, only to have the connecting Class One set a rate too high to swing it to rail.
The 45G tax credit has been a lifesaver for short lines. And there are a lot of grants out there to be had at all levels (federal, state, local). It behooves one to be familiar with them - or partner with someone who is.
@@killerbee6310so a short line might move a car 30 miles and interchange with a class one which might take it 500 miles to a market then dead head the empty car back to the short line. I see why the class one gets the bulk of the rate.
@@killerbee6310 Car supply is usually (not always) determined by the Class I roads. True there are per diem leases and other opportunities, but that is not the norm. As far as short line rates are concerned, in general it will not be miniscule. Let's say I'm bringing in fertilizer from Canada to a distributor in South Carolina. CP and NS may receive 2000 a car each and the short line receives $500. This isn't miniscule given the Class I roads are doing the vast majority of the tonnage move. And it is true Class I roads will price the move out of the market. Just normal business decisions. At the end of the day both parties need to make a profit. As far as 'lots of grants'...maybe. But there are hundreds of short lines going for those grants
@@cdavid8139thanks for your answer.
I'm a new subscriber to your channel, and really like your videos!
Thank you very much. I appreciate you watching and taking the time to give feedback. I have a ton more ideas (like...41 years worth)
@@killerbee6310 Wow!
Are the photos used in the videos personal photos? I in the video at 9:16 😂
Yep, they are mine. Let me know if you want a copy of the image.
Great video killer bee i never knew all these things thank u
Then my mission was successful!
Great video, will you be making a video about the third party contract rail service companies? Thank you for sharing
Thank you. I can certainly add the idea to the list. As I keep saying, all I need is time....
@@killerbee6310 completely understand this information hits hard and i am a modeler
And they wonder why they can’t compete with trucks ?😂😂😂😂😂
It sounds like you could make some money by being a consultant for people wanting to start a short line. Then maybe projects like the East Terminal Railway, here on YT, will succeed more.
I always wish I could see people's business plan. As for the East Terminal, I am not sure if he is trying to make it a viable business, or if it is a passion/hobby.
@@killerbee6310 I think it was a bit of both.
@@killerbee6310 If I understand correctly, he was doing for business, and plans to shut it down soon. He never seemed to consult his fan club, which had more collective knowledge than he did. Also, he should have taken in volunteer labourers and sales staff.
@@killerbee6310 As I was scrolling down, I thought that I should create a short line business plan to help people see if they can create/support one.
If I do do that, then would you be willing to help me, by answering questions, and looking it over?