Shortline Question

Virginian Railway Feb 20, 2015

  1. Virginian Railway

    Virginian Railway TrainBoard Member

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    Hi everyone, I've got a question about Shortlines. Why is it that big railroads can't make money off a certain branch, but when they sell it to a Shortline, the Shortline is able to make money? Is it something to do with taxes, the shipping price, or something else?
     
  2. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    I don't believe there is any single answer. It is probably several things.

    Amongst them, bigger railroads are more disconnected from their shippers. The good old fashioned (not) 1-800 call, which you talk to someone who has no idea who you are, barely an idea of where you are located, knows nothing of your needs or aspirations. Whereas the smaller companies also have their people closer to, if not on the ground locally. The down side to bigs getting rid of their line side agencies, in a cost cutting attempt. More closely to cutting themselves....

    Big companies tend to cherry pick the (seemingly) most lucrative shippers. Smaller operations know to survive they must get car loads, so they are very aggressive in seeking out shippers and/or attempting to get new customers located on line. Larger companies still have sales staffs, but they are nothing like what there were fifty years back.
     
  3. Hytec

    Hytec TrainBoard Member

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    Another reason are labor and facility costs. The Class-1s have a high number of "office personnel", such as middle and upper level managers and supervisors, secretaries for each manager, records and file clerks, finance clerks, etc., and don't forget lawyers. Then you have buildings all over the country, each with computers and other equipment, not to mention all the maintenance costs that go along with these buildings.

    On the other hand, most short lines are either "Mom & Pop" companies, or one step above that. They may have one office building with one or two multi-talented clerks. All the "managers" are in the field driving trains, maintaining equipment, or fixing track. One short line, I believe in Pennsylvania, has Mom running the "office" in their home, Pop driving the locomotive, and three sons taking turns making repairs, helping Pop, and dealing with customers. In other words, short lines are just like most small town businesses.

    Like Ken says, Class-1s look for B-I-G companies with B-I-G shipments with unit trains or lots of double-stacks. Whereas short lines work at the personal level, serving home-town customers, just like the corner grocery or hardware store.
     
  4. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    One way line side agencies were thinned is by the so-called "duelized" agency. The agent would work half a day at one location, handling all the spurs and blind sidings assigned there. Then would commute to another place, and work the rest of the day handling that same type of paperwork. At least there was a human face available at some time, for the shippers to meet and talk. In some instances this was further thinned by having a "mobile agent". This person would drive an assigned line segment, handling the shippers, again, a human face available daily, bi-weekly, tri-weekly as business warranted. Dehumanization has not helped keep rail shippers.
     

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