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The Importance of Short Line Railroads to Rural and Agricultural America The Importance of Short Line Railroads to Rural and Agricultural America John Bitzan Tamara VanWechel Douglas Benson Kimberly Vachal Upper Great Plains Transportation Institute North Dakota State University August 2003 Acknowledgment The researchers want to acknowledge the valuable contribution of the Transportation and Marketing Program at the U.S. Department of Agriculture in their support for and discussions of this research. Disclaimer The contents of this report reflect the views of the authors, who are responsible for the facts and accuracy of the information presented herein. This document is disseminated under the sponsorship of the Department of Transportation, University Transportation Centers Program, in the interest of information exchange. The U.S. government assumes no liability for the contents or use thereof. Abstract This study aims to fill in the gap for short-line research, while maximizing accuracy of results by utilizing Association of American Railroad’s Profiles database combined with American Short Line and Regional Railroad Association’ Annual Data Profile. More specifically, the study: (1) attempts to quantify the importance of local and regional railroads to the U.S. rural and agricultural economy and (2) examines factors affecting short-line viability and future prospects for a viable short-line network in the future. In 2000, short lines participated in nearly 30 percent (9.9 million carloads) of all rail movements. Thousands of customers are served by these railroads. It was estimated that more than 3,000 food product customers were served, more than 2,000 lumber and farm product customers, and more than 1,000 chemical and waste scrap customers utilized the services of short-line railroads. This report identifies several factors critical to the success of short line rail roads. Success was measured and analyzed by looking at variables related to traffic volume, backhaul traffic, reliance on industries and/or commodities, number of shippers, flexibility of labor, track conditions, management, and transportation competition. i ii Table of Contents Introduction ...................................................................1 Nationwide Assessment of the Role of Short Lines in Rural and Agricultural Communities .............2 Estimating Rail Car Loadings by Commodity .......................................5 Methodology for Estimating Carloads ............................................8 Estimates of Short Line Participation, Origination, and Termination ...................... 10 Revenue Ton-Miles ....................................................... 14 Customers ............................................................. 16 Geographic Distribution of Carloadings ............................................... 18 North Dakota’s Experience with Short Line Rail Carriers ................................... 25 North Dakota Rail System ......................................................... 26 Short Line Performance .......................................................... 27 Conclusion ................................................................... 65 iii List of Figures Figure 1. Railroad Industry Consist, 1999 ...............................................3 Figure 2. Miles Operated, Employees, and Revenues of U.S. Railroads, 1999 ......................4 Figure 3. Percent of Rail Miles Operated by Short Lines, 2000 ................................4 Figure 4. Estimated Percent of Industry Carloads Captured by the ADP ..........................6 Figure 5. Carloads Originated by Local, Regional and S&T Railroads, 2000 .......................8 Figure 6. Short Line Participation in U.S. Carloadings, 1993-2000 ............................. 10 Figure 7. Short Line Participation in U.S. Carloadings, 2000 - by Commodity ..................... 11 Figure 8. Short Line Origination of U.S. Carloadings, 1993-2000 .............................. 11 Figure 9. Short Line Origination of U.S. Carloadings, 2000 - by Commodity ...................... 12 Figure 10. Short Line Termination of U.S. Carloadings, 1993-2000 ............................ 13 Figure 11. Short Line Termination of U.S. Carloadings, 2000 - by Commodity .................... 14 Figure 12. Short Line Percentage of U.S. Revenue Ton-Miles. ............................... 15 Figure 14. Estimated Number of Short Line Customers, 2000 ................................ 17 Figure 15. Regional Definitions ..................................................... 19 Figure 16. Short Line Carloadings by Region, 2000 ....................................... 22 Figure 17. Total Short Line Originating Carloads by Region, 2000 ............................. 23 Figure 18. Percent of Each Region’s Agriculture Production Originated by Short Line ............... 24 Figure 19. Percent of Each Region’s Coal Production Originated by Short Lines ................... 24 Figure 20. North Dakota Rail System ................................................. 25 Figure 21. N.D. Elevator Rating of Rail Customer Service .................................. 31 Figure 22. Delay of Delivery for Tariff Rail Car Orders .................................... 31 Figure 23. Operating Ratio Comparison, 2000 ........................................... 37 Figure 24. Operating Expense per Carload Comparison, 2000 ................................ 38 Figure 25. Revenue per Carload Comparison, 2000 ....................................... 38 Figure 26. Operating Expense per Ton-Mile Comparison, 2000 ............................... 39 Figure 27. Revenue per Ton-Mile Comparison, 2000 ...................................... 39 Figure 28. Carloads per Mile Comparison, 2000 ......................................... 40 Figure 29. Ton-Miles per Mile Comparison, 2000 ........................................ 41 Figure 30. Traffic Balance Comparison, 2000 ........................................... 42 Figure 31. Concentration Index of Commodities Hauled Comparison, 2000 ...................... 44 Figure 32. Number of Industries Served Comparison, 2000 ................................. 44 Figure 33. Number of Customers Comparison, 2000 ...................................... 45 Figure 34. Customers per Carload Comparison, 2000 ...................................... 46 Figure 35. Percent of Employees Covered by Unions Comparison, 2000 ........................ 48 Figure 36. Average Employee Compensation per Hour comparison, 2000 ........................ 48 Figure 37. Ton-Miles per Employee Compensation, 2000 ................................... 49 Figure 38. Carloads per Employee Comparison, 2000 ...................................... 49 Figure 39. Ton-Miles per Employee Compensation, 2000 ................................... 50 Figure 40. Carloads per Man Hour Comparison, 2000 ..................................... 50 Figure 41. Percent of Track <90 lbs. Comparison, 1996 ................................... 51 Figure 42. Percent of Track that is Excepted Comparison, 2000 .............................. 52 Figure 43. Operating Ratio, 2000 .................................................... 53 Figure 44. Operating Expenses per Carload, 2000 ........................................ 54 iv Figure 45. Operating Expenses per Ton-Mile, 2000 ....................................... 54 Figure 46. Operating Revenue per Car, 2000 ............................................ 55 Figure 47. Operating Revenue per Ton-Mile, 2000 ........................................ 55 Figure 48. Carloads per Mile, 2000 .................................................. 56 Figure 49. Ton-Miles per Mile, 2000 ................................................. 56 Figure 50. Traffic Balance, 2000 .................................................... 57 Figure 51. Concentration Index of Commodities Hauled, 2000 ............................... 58 Figure 52. Number of Industries Served, 2000 .......................................... 58 Figure 53. Number of Customers, 2000 ............................................... 59 Figure 54. Customers per Carload, 2000 ............................................... 60 Figure 55. Percent of Employees Covered by Labor Union Agreements, 2000 ..................... 60 Figure 56. Average Employee Compensation per Hour, 2000 ................................ 61 Figure 57. Ton-Miles per Employee, 2000 ............................................. 61 Figure 58. Carloads per Employee, 2000 ............................................... 62 Figure 59. Ton-Miles per Man Hour, 2000 ............................................. 62 Figure 60. Carloads per Man Hour, 2000 .............................................. 63 Figure 61. Percent of Track <90 lbs., 1996 ............................................ 63 Figure 62. Percent of Track that is Excepted, 2000 ....................................... 64 v List of Tables Table 1. Comparison of Production, Transportation, and Population Characteristics of the Eight U.S. Regions in 2000 ............................................ 20 Table 2. N.D. Track Miles, Elevators Served, and Market Share for Grain & Oilseed Origination by Railroad, 1995/96 ........................................... 26 Table 3 Market Share for N.D. Elevator Grain & Oilseed Shipments ........................ 27 Table 4 Modal Distribution for N.D. Grain & Oilseed Shipments, Percent Originated by Rail from Elevators served by Each Railroad ................................... 28 Table 5 Traffic Density - Grain Shipments per Mile of Track, Average 1992-93 to 1995-96 ....... 29 Table 6 N.D. Elevators’ Rating of Railroad
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