Small Railroads -- Investment Needs, Financial Options, and Public Benefits

Railroads play an important role in the U.S. transportation system. Annually, railroads haul more than 1.5 billion tons of freight for an average distance of more than 750 miles, with a value of more than $319 billion. For some products, the role of railroads in the U.S, is even more pronounced. Railroads serve as an important transporter of many of the low-valued, bulky natural resource commodities produced in the U.S., such as coal, grain, fertilizer and basic chemicals. Short-line railroads (non-Class I railroads) account for 29% of all U.S. rail miles operated, 12% of all U.S. railroad employees, and 9% of all U.S. railroad freight revenue. Although short-line railroads comprise a small portion of U.S. freight revenues, they serve as an important feeder into the nation's large Class I railroads. It is estimated that nearly 14,000 shippers rely on short-lines for access to the nation's rail system. However, a recent change in the industry standard for the size of rail cars interchanged between railroads could threaten viability of the nation's short-line network. The old industry standard of 263,000-pound cars is being replaced with an industry standard of 286,000-pound cars. Many short-line railroads can not handle these larger cars, as they have light rail in place, shallow or poor ballast, and/or deferred tie maintenance. In many cases, the traffic levels available to short-line railroads may not justify a major upgrade to handle these larger rail cars. In other cases financing at terms agreeable to the short-line operator may not be available. This study examines: (1) capital investment needs facing the short-line industry, (2) terms available for meeting these needs, (3) public interest benefits of short-line railroads, and (4) the relationship of short-line railroad services to the statutory responsibilities of the Secretary of Transportation.

  • Record URL:
  • Corporate Authors:

    Upper Great Plains Transportation Institute

    North Dakota State University
    1320 Albrecht Blvd
    Fargo, ND  United States  58105
  • Authors:
    • Bitzan, John
    • Tolliver, Denver
    • Benson, Douglas
  • Publication Date: 2002-9

Language

  • English

Media Info

  • Media Type: Print
  • Features: Appendices; Figures; References; Tables;
  • Pagination: 102p

Subject/Index Terms

Filing Info

  • Accession Number: 01052048
  • Record Type: Publication
  • Report/Paper Numbers: UGPTI Departmental Publication No. 145
  • Files: TRIS
  • Created Date: Jun 25 2007 4:58PM