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Railway companies can interact with and control others in many ways. These relationships can be complicated by bankruptcies.
Often, when a railroad first opens, it is only a short spur of a main line. The owner of the spur line may contract with the owner of the main line for operation of the contractee's trains, either as a separate line or as a branch with through service. This agreement may continue as the former railroad expands, or it may be temporary until the line is completed.
If the operating company goes bankrupt, the contract ends, and the operated company must operate itself.
A major railroad may lease a connecting line from another company, usually the latter company's full system. A typical lease results in the former railroad (the lessee) paying the latter company (the lessor) a certain yearly rate, based on maintenance, profit, or overhead, in order to have full control of the lessor's lines, including operation.
If the lessee goes bankrupt, the lessor is released from the lease.
Most railroad companies are publicly traded with stocks. As the stockholders control the company, one railroad company can buy a majority of stock of another to control it. Sometimes, a bridge line, a railroad that has most traffic come from points not on its line, is owned equally by the companies that use it (via trackage rights).
Stock ownership does not automatically cause a merger of operations, merely friendly policies towards each other. Operating and leasing agreements typically require a more stringent approval process through the regulating body.
If the owned company goes bankrupt, its stock is worthless, and the owner no longer controls it (unless it buys it back at auction).
Consolidation happens when two railroad companies are consolidated, often the last step in an arrangement between two railroads. It is difficult to undo except in the case of bankruptcy, when different parts of the railroad may be sold to different buyers at auction.
Trackage rights (US), running rights, or running powers (UK) are an agreement between railroad companies in which the owner of tracks grants another railroad company some use of them. The deals can be long-term or short-term, do not always include the right to serve customers on the line, and may or may not be exclusive.
Short-term agreements are typically made when some kind of disaster affects one railroad and a parallel railroad line is fully operational or to allow the railroad to perform maintenance on the line. The parallel railroad will often grant temporary rights to the affected railroad until the problem is resolved. Long-term agreements can be made to allow competing railroads access to potentially-profitable shippers or to act as a bridge route between otherwise disconnected sections of another railroad.
A deal in which the owner grants only the right to run trains, not to stop for passengers or freight, is called overhead or incidental trackage rights.
A union station or terminal railroad typically involves trackage rights. The company that owns the station and associated trackage is typically owned in part by the railroads that use it, which operate over it by trackage rights.
In some rights deals, the owner of the tracks runs no trains of its own. That kind of arrangement can be done also by a partial lease.
In the United States, all trackage rights agreements are filed with the Surface Transportation Board and are available as a matter of public record.
Examples around the world include:
A haulage agreement is similar to one of trackage rights, but the railroad that owns the line operates the power for the cars of the latter company.
BC Iron is a small iron ore mining company that uses the railway of the larger Fortescue Metals Group to move its ore to port. The two companies have created a "mine gate" joint venture in which Fortescue will take BC's iron by rail to port in exchange for 50% of the deposit. [4]
Originally, at least in the United States, it was not clear whether railroads were going to be run like turnpikes, in which any paying customer could use the road. The Seekonk Branch Railroad in East Providence, Rhode Island (then part of Seekonk, Massachusetts) tested that in 1836 by building a short branch of the Boston and Providence Railroad to its own dock and by using the full line of the B&P. After the Massachusetts General Court had enacted a law prohibiting that, the B&P bought the branch in 1839.
The Swansea and Mumbles Railway, the world's first passenger railway service [5] operated in the same manner as turnpike roads. When it opened in 1807, anyone with a suitable horse-drawn waggon could use the line in exchange for paying a toll. The railway operated in this manner until passenger services ceased in 1826 or 1827 because of the construction of a turnpike road parallel to the railway.
The Stockton and Darlington Railway of 1825 opened with mostly horse-drawn trains, with all able to operate their own trains on a turnpike basis.
The Liverpool and Manchester Railway of 1830 opened with purely-steam locomotive haulage, and the need for greater co-ordination meant that the railway had to operate the trains. Private wagons hauled by company trains were tolerated. That set the pattern for the next century or more.
Canals have been operated like turnpikes if the canal company was prohibited for anti-monopoly reasons from operating boats on the canal.
After 1948, most the United Kingdom railway network was nationalized as British Rail for both political and practical reasons. Internal industrial operations and some minor lines were excluded from the process. Where industrial lines met the railway network proper, trains would be transferred from the industrial operator to British Rail control, with non-British Rail locomotives and engineers never being permitted onto the British Rail network. Arrangements existed whereby non-British Rail operators could own rolling stock. This changed in 1986, when in a very different political climate, Foster Yeoman obtained the right to run its own trains onto the British Rail network if British Rail locomotive engineers were used.
In 1997, the British Railways network was privatised as a single company Railtrack, which later became the non-profit company Network Rail. Multiple companies hold rights to operate trains on the national network either as for-profit operators or government aided passenger franchises. A formal safety process exists for gaining access, along with driver and equipment requirements and a pricing scheme. Any organisation meeting all of the requirements can become a railway operator and access the national network.
As well as holding access rights to the national network and, in some cases, internationally via the Channel Tunnel, many of the freight operators have agreements that permit them to access private networks operated by industries and ports and, in some cases, also onto heritage railways, several of which now also carry small amounts of commercial freight traffic.
Passenger operators also have agreements with some of the heritage railways to allow them to run special trains to connect with heritage railway events. Similarly, heritage railway operators and railtour operators have reached arrangements to access the national network and run heritage trains, often steam powered, to and from the national rail network. As of 2007, that has extended to regular summer timetabled services on both the Stratford-upon-Avon line in the Midlands and from Grosmont, North Yorkshire, on the North Yorkshire Moors Railway to Whitby on the national rail network.
BNSF Railway is the largest freight railroad in the United States. One of six North American Class I railroads, BNSF has 36,000 employees, 33,400 miles (53,800 km) of track in 28 states, and over 8,000 locomotives. It has three transcontinental routes that provide rail connections between the western and eastern United States. BNSF trains traveled over 169 million miles in 2010, more than any other North American railroad.
NJ Transit Rail Operations is the rail division of NJ Transit. It operates commuter rail service in New Jersey, with most service centered on transportation to and from New York City, Hoboken, and Newark. NJ Transit also operates rail service in Orange and Rockland counties in New York under contract to Metro-North Railroad. The commuter rail lines saw 57,179,000 riders in 2023, making it the third-busiest commuter railroad in North America and the longest commuter rail system in North America by route length.
The Grand Trunk Western Railroad Company was an American subsidiary of the Grand Trunk Railway, later of the Canadian National Railway operating in Michigan, Illinois, Indiana, and Ohio. Since a corporate restructuring in 1971, the railroad has been under CN's subsidiary holding company, the Grand Trunk Corporation. Grand Trunk Western's routes are part of CN's Michigan Division. Its primary mainline between Chicago and Port Huron, Michigan serves as a connection between railroad interchanges in Chicago and rail lines in eastern Canada and the Northeastern United States. The railroad's extensive trackage in Detroit and across southern Michigan has made it an essential link for the automotive industry as a hauler of parts and automobiles from manufacturing plants.
The United New Jersey Railroad and Canal Company (UNJ&CC) was a United States-based railroad company established in 1872. It was formed by the consolidation of three existing companies: the Camden and Amboy Railroad, Delaware and Raritan Canal Company, and New Jersey Rail Road and Transportation Company. The Camden and Amboy and New Jersey Rail Road were among the earliest North American railroads. The Pennsylvania Railroad leased the United New Jersey Railroad and Canal Company in 1872.
The Providence and Worcester Railroad is a Class II railroad operating 612 miles (985 km) of tracks in Rhode Island, Massachusetts, and Connecticut, as well as New York via trackage rights. The company was founded in 1844 to build a railroad between Providence, Rhode Island, and Worcester, Massachusetts, and ran its first trains in 1847. A successful railroad, the P&W subsequently expanded with a branch to East Providence, Rhode Island, and for a time leased two small Massachusetts railroads. Originally a single track, its busy mainline was double-tracked after a fatal 1853 collision in Valley Falls, Rhode Island.
The San Diego and Arizona Eastern Railway Company is a short-line American railroad founded in 1906 as the San Diego and Arizona Railway (SD&A) by sugar magnate, developer, and entrepreneur John D. Spreckels. Dubbed "The Impossible Railroad" by many engineers of its day due to the immense logistical challenges involved, the line was established in part to provide San Diego with a direct rail link to the east by connecting with the Southern Pacific Railroad lines in El Centro, California.
Carrizo Gorge Railway, Inc. was a railroad operator on the San Diego and Arizona Eastern Railway (SD&AE) from Tijuana, Mexico, to Plaster City, California.
The Michigan Central Railroad was originally chartered in 1832 to establish rail service between Detroit, Michigan, and St. Joseph, Michigan. The railroad later operated in the states of Michigan, Indiana, and Illinois in the United States and the province of Ontario in Canada. After about 1867 the railroad was controlled by the New York Central Railroad, which later became part of Penn Central and then Conrail. After the 1998 Conrail breakup, Norfolk Southern Railway now owns much of the former Michigan Central trackage.
The Australian Rail Track Corporation (ARTC) is an Australian Government-owned statutory corporation.
The Housatonic Railroad is a Class III railroad operating in southwestern New England and eastern New York. It was chartered in 1983 to operate a short section of ex-New York, New Haven and Hartford Railroad in northwestern Connecticut, and has since expanded north and south, as well as west into New York State.
The Maryland Midland Railway is a Class III short-line railroad operating approximately 63 miles of track in central Maryland. It was originally headquartered in the former Western Maryland Railway station in Union Bridge, Maryland: it has since moved to a new facility across from the old station. The railroad has been 87.4% owned by Genesee & Wyoming since 2008, with Lehigh Cement retaining a 12.6% interest.
The Connecticut Southern Railroad is a 90-mile (140 km) long short-line railroad operating in Connecticut and Massachusetts. The company was formed in 1996 as a spinoff of Conrail by shortline holding company RailTex and subsequently acquired in 2000 by RailAmerica. Since 2012, it has been a subsidiary of Genesee & Wyoming. CSO is headquartered in Hartford, Connecticut, site of its Hartford Yard. The company also operates East Hartford Yard.
The New England Central Railroad is a regional railroad in the New England region of the United States. It began operations in 1995, as the successor of the Central Vermont Railway (CV). The company was originally a subsidiary of holding company RailTex before being purchased by RailAmerica in 2000. In 2012, the company was purchased by Genesee & Wyoming, its current owner.
The Indiana Rail Road is a United States Class II railroad, originally operating over former Illinois Central Railroad trackage from Newton, Illinois, to Indianapolis, Indiana, a distance of 155 miles (249 km). This line, now known as the Indiana Rail Road's Indianapolis Subdivision, comprises most of the former IC/ICG line from Indianapolis to Effingham, Illinois; Illinois Central successor Canadian National Railway retains the portion from Newton to Effingham. INRD also owns a former Milwaukee Road line from Terre Haute, Indiana, to Burns City, Indiana, with trackage rights extending to Chicago, Illinois. INRD no longer serves Louisville, Kentucky, and the Port of Indiana on the Ohio River at Jeffersonville, Indiana, through a haulage agreement with the Louisville & Indiana Railroad (LIRC).
The Vermont Railway is a shortline railroad in Vermont and eastern New York, operating much of the former Rutland Railway. It is the main part of the Vermont Rail System, which also owns the Green Mountain Railroad, the Rutland's branch to Bellows Falls. The trackage is owned by the Vermont Agency of Transportation except in New York, where VTR operates a line owned by the Boston and Maine Corporation. The rail line employs about 150 people in Vermont.
The New England Southern Railroad is a Class III shortline railroad that operates out of Canterbury, New Hampshire, and serves industries in central New Hampshire, in the United States.
One Rail Australia was an Australian rail freight operator company. Founded by a United States short line railroad holding company, Genesee & Wyoming Inc, in 1997 as Australian Southern Railroad, and successively renamed Australian Railroad Group and Genesee & Wyoming Australia, it was renamed One Rail Australia in February 2020 after the American company sold its remaining shareholding. In July 2022, assets from the South Australian, Northern Territory and interstate operations of the company were sold to rail operator company Aurizon Holdings Limited. The remaining assets, relating to coal haulage in New South Wales and Queensland, were sold in February 2023 to Magnetic Rail Group.
Iowa Pacific Holdings was a holding company that owned railroad properties across North America and the United Kingdom, as well as providing services such as railcar repairs, leasing, management and consulting services to other operators. The company was founded in 2001 with headquarters in Chicago, Illinois.
Morristown & Erie Railway is a short-line railroad based in Morristown, New Jersey, chartered in 1895 as the Whippany River Railroad. It operates freight rail service in Morris County, New Jersey and surrounding areas on the original Whippany Line between Morristown and Roseland, as well as the Morris County-owned Dover & Rockaway Branch, Chester Branch, and High Bridge Branch. The M&E also operated the Maine Eastern Railroad from November 2003 to December 31, 2015.
The Lehigh Line is a railroad line in Central New Jersey, Northeastern Pennsylvania, and the Lehigh Valley region of eastern Pennsylvania. It is owned and operated by the Norfolk Southern Railway. The line runs west from the vicinity of the Port of New York and New Jersey in Manville, New Jersey via Conrail's Lehigh Line to the southern end of Wyoming Valley's Coal Region in Lehigh Township, Pennsylvania.
