Thoroughbred Shortline Program

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The Thoroughbred Shortline Program was a system of shortline creation devised by Norfolk Southern in the late 1980s. It involved an alternative to the typical practice of a Class I railroad selling rail lines outright to shortlines in the post-Staggers Act era. Defining features of the program included leasing lines to shortline operators as opposed to outright sales, keeping stations available in Norfolk Southern marketing campaigns, and crediting carloads delivered to Norfolk Southern towards the lease and eventual purchase of the line. The program ran from 1988 to 1991, creating more than a dozen new shortline railroads, nearly all of which are still in operation today. [1]

A shortline railroad is a small or mid-sized railroad company that operates over a relatively short distance relative to larger, national railroad networks. The term is used primarily in the United States and Canada. In the U.S., railroads are categorized by operating revenue, and most shortline railroads fall into the Class III or Class II categorization defined by the Surface Transportation Board. Shortlines generally exist for one of three reasons: to link two industries requiring rail freight together ; to interchange revenue traffic with other, usually larger, railroads; or to operate a tourist passenger train service. Often, short lines exist for all three of these reasons.

Norfolk Southern Railway American Class I railway (1990–)

The Norfolk Southern Railway is a Class I railroad in the United States. With headquarters in Norfolk, Virginia, the company operates 21,500 route miles in 22 eastern states, the District of Columbia, and has rights in Canada over the Albany to Montréal route, and previously on CN from Buffalo to St. Thomas. NS is responsible for maintaining 26,300 miles, with the remainder being operated under trackage rights from other parties responsible for maintenance. The most common commodity hauled on the railway is coal from mines in Indiana, Kentucky, Pennsylvania, Tennessee, Virginia, and West Virginia. The railway also offers the largest intermodal network in eastern North America.

Staggers Rail Act

The Staggers Rail Act of 1980 is a United States federal law that deregulated the American railroad industry to a significant extent, and it replaced the regulatory structure that had existed since the 1887 Interstate Commerce Act.

Contents

Background

The period following railroad deregulation under the provisions of the Staggers Rail Act of 1980 spawned a plethora of railroad rationalization programs. In addition to outright abandonment of low density routes many of the more promising lines were sold to shortline operators. [1] A reoccurring problem was that many of these new railroads were often so overburdened by the costs of purchasing the infrastructure they operated on that they lacked the capital to expand their customer base and improve their railroads. [2]

Norfolk Southern explored the creation of its own rationalization program in 1987 with the goal of reorganizing 2,700 miles (4,300 km) of low density lines spread throughout their 27,000 miles (43,000 km) of track. 1,500 miles (2,400 km) of track were abandoned outright, with the remaining tracks slated to be distributed to shortlines. The result was the creation of the Thoroughbred Shortline Program. [1]

The Program

A key fixture of the Thoroughbred Shortline Program included leasing, as opposed to selling, railroads to shortline operators. This spared the new startups from expensive costs of taking out loans for mortgage payments on the railroads. The second component of the program involved crediting carloads delivered to Norfolk Southern by the shortlines towards the lease. So long as the shortline could maintain the same annual carloads on the line as Norfolk Southern they owed no payments towards the lease. This also kept traffic directed on Norfolk Southern interchange points as opposed to competitors lines. Leases under the program spanned between 3 and 20 years, after which the shortlines had the option of purchasing the railroad outright. [1]

Shortlines Created


The Aberdeen, Carolina and Western Railway is a short-line railroad running from Aberdeen to Star, North Carolina. It was incorporated in 1987 and operates on a former Norfolk Southern Railway branch line. It also leases track from Norfolk Southern between Charlotte and Gulf, North Carolina. It serves approximately 18 industries, mainly dealing in forest and agricultural products.

Carolina Coastal Railway

Carolina Coastal Railway is a shortline railroad that operates several lines in North Carolina and one line in South Carolina.

Central Railroad of Indianapolis

Central Railroad of Indianapolis is a Class III short-line railroad that operates approximately 39 miles (63 km) miles of rail line in north central Indiana.

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References

  1. 1 2 3 4 Lewis, Edward A. (1996). American Shortline Railway Guide (5 ed.). Kalmbach Publishing Company. pp. 226–227. ISBN   0-89024-290-9.
  2. Welty, Gus (1989). ""Cars, not Cash" is Norfolk Southern Goal in Branch Line Program". Railway Age.