Railway Express Agency (aka REA Express) (REA), founded as the American Railway Express Agency and later renamed the American Railway Express Inc., was a national package delivery service that operated in the United States from 1918 to 1975. REA arranged transport and delivery via existing railroad infrastructure, much as today's UPS or DHL companies use roads and air transport. It was created through the forced consolidation of existing services into a national near-monopoly to ensure the rapid and safe movement of parcels, money, and goods during World War I.
REA ceased operations in 1975, unable to adapt to changes in the rail industry, and increased competition from other modes of package delivery.[1][2]
History
American Railway Express freight wagon, Helena, Montana, 1922
Express delivery in the early 19th century was almost all by horse, whether by stagecoach or riders on horseback. The first parcel express agency in the United States is generally considered to have been started by William Frederick Harnden (1812–1845), who in 1839 began regular trips between New York City and Boston, Massachusetts, as a courier transporting small parcels, currency and other valuables. Another, Wells Fargo & Co, was founded in 1853. Other early express companies included Southern Express Company, Adams Express Company; and Butterfield Overland Mail.
Ad for a railroad, showing American Railway Express service along the Utah Idaho Central Railroad, 1922
As railroads developed and expanded through the United States, linking towns of all sizes, stagecoach and horseback gave way to rail. The express business flourished in the latter half of the 19th century, and by 1900 there were four principal parcel express companies, all of which included the rapidly advancing railways as one of their means of transport: Adams Express Company, Southern Express Company, American Express Company, and Wells Fargo.
The United States Post Office Department introduced parcel post in 1913. This service enabled an individual to mail a item larger than a letter, up to 11 pounds (5.0kg) in weight.[3][4][5] This was on top of laws, Private Express Statutes, that gave the US Post Office the exclusive right to transport letters. Express companies could not transport letters, unless the letter had the correct United States Postage applied, on top of the rates the express company charged.[4] Private railway express business increased steadily through the end of World War I.
World War I
During the winter of 1917, the United States suffered a severe coal shortage. On December 26, PresidentWoodrow Wilson nationalized the railroads in order to move federal troops, their supplies, and coal. Treasury Secretary William Gibbs McAdoo was appointed Director General of the newly formed United States Railroad Administration (USRA), which controlled all significant railroads in the country temporarily starting on 28 December 1917. This order however, did not include the various major express companies.
McAdoo did not view the multiple companies as a favorable arrangement, and pushed for their consolidation into a single organization, which was done on 1 July 1918. Railroad-owned Great Northern Express, Northern Express, Western Express, and non-railroad-owned Adams Express, American Express, Wells Fargo, Southern Express were merged into a single unified entity, American Railway Express Company.[5][4]
REA Express promotional silver Bullet, circa 1970
All contracts between express companies and railroads were nullified, and McAdoo proposed that all existing express companies be consolidated into a single company to serve the country's needs. The result was a new company called the American Railway Express Agency, which was formed in July 1918 as a consolidation of the four major and three minor express companies.[6] The new entity took custody of all the pooled equipment and property of existing express companies (40%, the largest share, came from American Express, who had owned the rights to the express business over 71,280 miles (114,710km) of railroad lines, and had 10,000 offices, with over 30,000 employees). During the war, redundant facilities were eliminated, staff transferred and procedures refined and improved within the new single company.[5][4]
Following the return of railroads to private ownership and operation on 1 March 1920, the task of unwinding American Railway Express needed to be done. The efforts to improve the organization during the war and eliminate inefficiencies, particularly redundant facilities had now created an issue. The elimination of redundant facilities and pooling of equipment and personnel had made dismantling it and returning it to its pre-war state effectively impossible. With few options, the Interstate Commerce Commission granted approval for a monopoly to exist, but encouraged railroads to start their own independent express services.[5][4]
Railway Express Agency
Railway Express Agency office, San Augustine, Texas, 1939
Sixty-nine railroads would take over American Railway Express Inc. on 1 March 1929, under the Railway Express Agency. This takeover consisted of allocating 1,000 shares of stock, according to the levels of express revenue generated by a railroad. This prevented a single railroad from owning the company, as Pennsylvania Railroad received only 126 shares, New York Central 98 shares, and third and fourth highest Southern Pacific and Santa Fe with 46 shares each. Some of the smallest railroads to receive any shares, such as the Bangor & Aroostook, received only a single share. Share ownership was not required to participate in the Railway Express Agency, with share-less railroads still moving REA traffic. However they wouldn't receive profits from REA, which were paid out according to share ownership. A notable standout from the takeover was Southern Railway, which had its own railway express service, Southeastern Express Co, that remained independent until being taken over in 1938.[7]
REA Air Express Brochure 1943
In March 1929, the assets and operations of American Railway Express Inc. were transferred to Railway Express Agency (REA). REA was owned by 86 railroads in proportion to the express traffic on their lines; no one railroad or group of railroads controlled the agency. In response to customer demand, REA added a Chicago-based refrigerator car line. In 1927, REA began an Air Express Division.[8] In 1938, the remainder of Southern Express also joined the consolidated REA.[7][4]
Post-World War II
Following the end of the war, express operations remained profitable into the 1950s. As passenger operations struggled from the growing airline industry and automobile ownership, express revenues did better than passenger in some situations. The reality was less ideal, as increased profitability observed in the early 1950s were result of shipping rate increases. Traffic was on a decline compared to the 1940s. In 4 years, 1946 to 1950, shipments fell 62 percent.
REA concentrated on express refrigerator service after 1940, and continued to expand its fleet of express reefers until the mid- to late-1950s. At that time, business declined dramatically owing to competition from refrigerated motor trucks. By this time, overall rail express volume had also decreased substantially. Federal investment in the interstate highway system after WWII meant that trucks and other vehicles had more flexibility in transporting goods to a variety of cities. The increase in private ownership of automobiles doomed many passenger lines of the railroads, and industrywide restructuring took place.
In 1959, REA negotiated a new contract, allowing it to use any mode of transportation. It also acquired rights to allow continued service by truck freight after passenger trains were discontinued. REA unsuccessfully attempted entering the piggyback and container business. Another blow came when the Civil Aeronautics Board terminated REA's exclusive agreement with the airlines for air express.
By 1965 many of REA's refrigerator cars, stripped of their refrigeration equipment, were in lease service as bulk mail carriers. Many were relegated to work train service.
REA Express and decline
In February 1964, Greyhound Lines attempted to buy a majority ownership stake in Railway Express Agency, for $20 ($196.00 in 2023) per share, for at least 50% of all shares, and to demonstrate their commitment to the offer, bought 500,000 unissued shares from a 1963 stock split. Some railroads objected to this effort, and initiated legal action, and eventually Greyhound withdrew their offer. Attempts to buy REA would continue through the rest of the 1960s. By 1969, arrangements were made to sell REA. Five existing REA cooperate officers would buy out the shares at $1 ($8.31 in 2023) per share, or around $2.5 million ($20.8million in 2023) in total. In November, Tom Kole, formerly of Ryder Truck Lines, was brought to lead marketing.[1] By then Railway Express Agency only received 10% of revenue from its rail operations, the remaining amounts came from trucking, 60% and air express, 40%.[1]
On 1 June 1970, the company adopted the new name REA Express, Inc., revealing a new image to distance itself from its railroad past and nearly everything that reminded of it. Newly delivered trucks were now a light gray with a blue arrow pointing diagonally upward. No green or red anywhere to be found in the new paint scheme. The iconic red diamond was revised to have the abbreviation "REX".[1][1][10][11] Tom Kole, having only joined REA Express the previous year, had taken over as president and CEO of REA Express, Inc, dethroning Spenser D. Mosely, who'd led the buyout in 1969.[1]
In 1971, REA Express initiated a lawsuit against 160 railroads for $145 million ($1.09billion in 2023) over a number of issues.[1] They also initiated a lawsuit against United Parcel Service, alleging that UPS had conspired for 60 years to monopolize the small parcels' market.[1] The company also became involved with lawsuits with unions over the efforts to layoff large numbers of employees at once.[1] ICC data revealed that REA Express now only handled 1% of intercity small parcels traffic.[1] During the railroad strike of October 1974, the first Altair 8800microcomputer was lost. It had been shipped from Albuquerque to Popular Electronics magazine in New York via REA and never arrived.[12]
Railway Express Agency luggage tag from New York City to Narrowsburg, for the Queens Boy Scout camp, Camp Man
The effects of the recession literally pulled the rug out from under our carefully planned recovery program and our cash position during the past two months has become critical. Our attempts to obtain Government‐backed loans and relief legislation have not been successful.
—Tom Kole, REA Express, Inc. President, New York Times (February 1975)
From 1969 to the end in 1975, REA Express, Inc. lost an average of $50,000,000 ($399,001,815 in 2022) every year. On February 18, 1975, REA Express, Inc. filed for Chapter 11 bankruptcy, blaming: high inflation, lack of available credit, a downturn in express shipments and losses due to continued issues with railroads.[13] In June 1975, wildcat strikes occurred at facilities in New York City, Chicago, St Louis, Kansas City, Philadelphia and Oklahoma in reaction to bankruptcy reorganization efforts during the preceding months, including a 10 percent pay cut, the dismissal of 3,200 employees and closure of 114 terminals.[14] Despite reorganization efforts, the company wouldn't last long, collapsing eight months later on 6 November 1975.[15][1]
In 1978, former REA Express president and CEO Tom Kole would be indicted of six counts in federal court: Three counts of embezzlement, two counts of making false statements to the Interstate Commerce Commission, and one count of conspiracy.[16] Kole, along with others, were accused of embezzling over $100,000 ($566,234 in 2023) from REA Express during its final years. Kole was sentenced to two years in prison in early 1978 after pleading guilty to the conspiracy charge on 16 January 1977.[17]
Operations
Arrangement with Railroads
The original 1929 contract with railroads lasted 25 years, ending in 1954. The arrangement granted REA the exclusive right to express services on railroads. The railroads would provide rolling stock, space at stations, access to railroad platforms, as well as space in any baggage cars that was not being used.[2][18] In turn, REA would provide 85% of gross revenue from its rail car shipments to the railroads. After operating expenses were calculated, any profits would be disbursed monthly to the shareholder railroads, according to REA traffic on the railroads.[7]
In 1954, this arrangement remained largely the same, however changes in railroad operations, as passenger rail was gradually vanishing, combined with increased competition from a growing less-than-truckload trucking industry forced revaluation of the agreement in October 1959.[2] The structure of the agreement was completely overhauled, with REA now required to buy space on trains as required for their shipments. However, REA was no longer required to get permission from a railroad to use a mode of transport other than rail. The payment structure was also revised, now a simple 50-50 split with the railroad, airline or motor carrier being used for that journey.[2] This would be momentarily successful, but ultimately not enough for REA to make a meaningful turn around.[2]
Vehicles
Rail
REA baggage car detail
Railroad rolling stock made a huge backbone of REA's fleet, particularly prior to the 1950s. The cars stood out with the simple dark green paint scheme and Railway Express Agency on the side. From the 1950s onward, the iconic red diamond logo was also painted on the side.[19]
Despite being known for their railroad connection, Railway Express Agency maintained an extensive fleet of motor vehicles. In 1925, the Englishelectrical engineer, Frank Ayton reckoned that with 1,800 electrical vehicles in operation, they were the biggest user of electric vehicles in the world.[20] They also used 4,700 gasoline-powered vehicles for long-distance work and 17,500 horses.
By December 1941, REA had acquired 12,000 trucks. Most of these were delivery style trucks for local deliveries between terminals and customers, with a smaller amount of semi-trailers.[21] Due to REA's connections to the railroads and ICC regulations for most of its existence, packages were required to be transported by rail. Transport by truck or other mode required explicit permission from the railroad impacted by the change of transport mode.[22] Even following loosening of these regulations still had notable limitations, such as a package being allowed by truck, only if the package either traveled by rail earlier in its journey or would go by rail in a later portion of its journey.[23][21]
Air
American Railway Express would be one of the first air freight companies in the United States, making a test flight on 14 November 1919.[24] This early success would persist, for decades, with REA dominating the field through 1950s. REA didn't operate its own aircraft, similar to its arrangement with railroads to use space in baggage cars, the company had agreements with dozens of airlines to transport express freight on their aircraft.[9]
REA's domination of air express freight would come to an end shortly before its demise, when the Civil Aeronautics Board, responsible for regulation of aviation operations, required airlines that REA was using to ship its express cargo, to discontinue the practice by 5 June 1974.[2][1]
REALCO
REALCO, REA Leasing, Co., was a subsidiary of Railway Express Agency, intended to be a fleet of semi-trailers that were owned and serviced by REA and leased to railroads, often decorated with the leasing railroads logo and colors, under either the general reporting mark 'REAZ' or a company specific reporting mark starting with an "R".[25] In 1969, REA sold off REALCO to Integrated Container Services.[23][9]
Package delivery or parcel delivery is the delivery of shipping containers, parcels, or high-value mail as single shipments. The service is provided by most postal systems, express mail, private courier companies, and less-than-truckload shipping carriers. Package delivery is different in each country, and how packages are delivered is closely connected with the cost for delivering to that country as well as population. In 2019, China, The United States, and Japan were the leaders in package delivery while Latvia, Macau, and Iceland were the bottom three. The population of the bottom three barely totals 2 million while the population of the top three tops totals more than 2 billion. Package delivery is an every day occurrence in the US while many other countries do not have this luxury.
Rail transport terms are a form of technical terminology applied to railways. Although many terms are uniform across different nations and companies, they are by no means universal, with differences often originating from parallel development of rail transport systems in different parts of the world, and in the national origins of the engineers and managers who built the inaugural rail infrastructure. An example is the term railroad, used in North America, and railway, generally used in English-speaking countries outside North America and by the International Union of Railways. In English-speaking countries outside the United Kingdom, a mixture of US and UK terms may exist.
The Seaboard Coast Line Railroad was a Class I railroad company operating in the Southeastern United States beginning in 1967. Its passenger operations were taken over by Amtrak in 1971. Eventually, the railroad was merged with its affiliate lines to create the Seaboard System in 1983.
A passenger railroad car or passenger car, also called a passenger carriage, passenger coach, or passenger bogie is a railroad car that is designed to carry passengers. The term passenger car can also be associated with a sleeping car, a baggage car, a dining car, railway post office and prisoner transport cars.
A reporting mark is a code used to identify owners or lessees of rolling stock and other equipment used on certain rail transport networks. The code typically reflects the name or identifying number of the owner, lessee, or operator of the equipment. Similar to IATA airline designators.
A refrigerator car is a refrigerated boxcar (U.S.), a piece of railroad rolling stock designed to carry perishable freight at specific temperatures. Refrigerator cars differ from simple insulated boxcars and ventilated boxcars, neither of which are fitted with cooling apparatus. Reefers can be ice-cooled, come equipped with any one of a variety of mechanical refrigeration systems, or use carbon dioxide or liquid nitrogen as a cooling agent. Milk cars may or may not include a cooling system, but are equipped with high-speed trucks and other modifications that allow them to travel with passenger trains.
Rail Express Systems (RES) was a sector of British Rail. This sector was responsible for transport of mail and parcels, including the travelling post office trains, as well as taking over charter operations from InterCity and haulage of the Royal Train.
New York New Jersey Rail, LLC is a switching and terminal railroad that operates the only car float operation across Upper New York Bay between Jersey City, New Jersey and Brooklyn, New York. Since mid-November 2008, it has been owned by the Port Authority of New York and New Jersey, which acquired it for about $16 million as a step in a process that might see a Cross-Harbor Rail Tunnel completed.
Fruit Growers Express (FGE) was a railroad refrigerator car leasing company that began as a produce-hauling subsidiary of Armour and Company's private refrigerator car line. Armour controlled both the packing operations and the transport insulated railroad car line, and its customers had complained they were overcharged. In 1919 the Federal Trade Commission ordered the company's spinoff of Fruit Growers Express for antitrust reasons, which was accomplished by 1920.
The California Northern Railroad is one of several Class III short-line railroad companies owned by Genesee & Wyoming, Inc. It operates over Southern Pacific Railroad (SP) tracks under a long-term lease.
The Ventura County Railroad is a class III railroad subsidiary of Genesee & Wyoming, connecting the Union Pacific Railroad in Oxnard to South Oxnard and Port Hueneme. It began operations in 1998 under RailAmerica, leasing its lines from the Ventura County Railway, owner of lines first opened in about 1905 that have remained independent of larger carriers. The railroad serves industrial areas including the Port of Hueneme and Naval Facilities Expeditionary Logistics Center at Naval Base Ventura County.
This article contains a list of terms, jargon, and slang used to varying degrees by railfans and railroad employees in the United States and Canada. Although not exhaustive, many of the entries in this list appear from time to time in specialist, rail-related publications. Inclusion of a term in this list does not necessarily imply its universal adoption by all railfans and railroad employees, and there may be significant regional variation in usage.
The Wiregrass Central Railroad is a shortline railroad operating 19.5 miles (31.4 km) of track from a CSX Transportation connection at Waterford, near Newton, to Enterprise, Alabama via the south side of Fort Novosel. The company was initially a subsidiary of Gulf and Ohio Railways and began operations in 1987 following the purchase of the Enterprise Subdivision branch line of CSX Transportation.
The Black Mesa and Lake Powell Railroad was an electrified private railroad operating in Northern Arizona, USA within the Navajo Nation which transported coal 78 miles (126 km) from the Peabody Energy Kayenta Mine near Kayenta, Arizona to the Navajo Generating Station power plant at Page, Arizona. It was completely isolated from the national rail network and did not connect to any other railroad. As a result, like metros, light rails, and trams, it was not controlled by the Federal Railroad Administration.
The GE 45-ton switcher is a 4-axle diesel locomotive built by General Electric between 1940 and 1956.
The Washington County Railroad is a shortline railroad operating in Vermont and a sliver of New Hampshire, forming part of the Vermont Rail System. The WACR began operating in 1980 over the old Montpelier and Barre Railroad in Washington County, which the state acquired to ensure the continuance of rail service, and ceased operations in early 1999. Later that year, after interim service by other companies, operations were transferred to a new WACR subsidiary of the Vermont Rail System. In 2003, operations were greatly expanded through acquisition by the state and operation by the WACR of a former Boston and Maine Corporation and Canadian Pacific Railway line between Newport and White River Junction, which had most recently been operated by subsidiaries of the bankrupt Bangor and Aroostook Railroad.
The Central Railroad Company of Indiana is a Class III short-line railroad that owns 92 miles (148 km) of track between Cincinnati, Ohio, and Shelbyville, Indiana, with trackage rights on CSX to Indianapolis, Indiana. CIND interchanges with CSX, Indiana & Ohio Railway, and Norfolk Southern in Cincinnati, and in North Bend, Ohio, with CSX; an Indiana & Ohio branchline splits from the CIND line at Valley Junction, a railroad location near Hooven, Ohio.
Loomis AB is a Swedish cash handling company. The modern company was formed in 1997 by the consolidation of two armoured security concerns, Wells Fargo Armored Service and Loomis Armored Inc. Their international network covers over 200 operating locations in the US and eleven Western European countries.
The Rogue Valley Terminal Railroad is a 14-mile (23 km) shortline railroad that connects the industrial park in White City, Oregon, United States to the Central Oregon and Pacific Railroad, which hauls its cars to the Union Pacific Railroad at Eugene, Oregon or Black Butte, California via the Siskiyou Summit, or to the Yreka Western Railroad at Montague, California.
Shaw, Robbert B. (July 1979). "Decline and Decay of REA". Trains. Vol.39, no.9. A.C. Kalmbach.
Wilson, Jeff (2016). Express, Mail & Merchandise Service. Waukesha, WI: Kalmbach Books. ISBN978-1-62700-378-0.
Garrett, Klink; Smith, Toby (2003). Ten Turtles to Tucumcari - A Personal History of the Railway Express Agency (1sted.). University of New Mexico Press. ISBN0-8263-3049-5.
This page is based on this Wikipedia article Text is available under the CC BY-SA 4.0 license; additional terms may apply. Images, videos and audio are available under their respective licenses.
