U.S. short-line railroads boom during recent years

Press, 28 July 1987, Page 32

U.S. short-line railroads boom during recent years

MERCER CROSS

writes from Union

Bridge, Maryland, for the National Geographic News Service.

Jim Stuckey has enough day-to-day headaches running his little railroad without suffering the kind of near-disaster that struck a few Sundays ago. Somebody who knew what he was doing sneaked up during the night, removed the chocks from two loaded freight cars, and let the air out of the brakes. The two cars took off on a freewheeling journey that ended 13km down the track.

Impaled on the coupler of the front car was an automobile, caught broadside at a crossing. Inside the car was the driver, a terrified but uninjured woman. “This is the type of thing over which we have virtually no control,” says Stuckey, president of the Maryland Midland Railway. “This kind of thing can mean insolvency.” But this time he was lucky. A scare did not become a tragedy. Such are the problems that can bedevil the owners of America’s rapidly expanding short-line railroads. By loose definition, a short line has fewer than 100 miles (160 km of track and average annual operating revenues of no more than SUSI 7.6 million, and operates in interstate commerce. Most carry freight only; a few also offer passenger excursions. There are 350 to 375 short lines in the United States, says Thomas C. Dorsey, vice-presi-dent, general counsel, and secretary of the American Short Line Railroad Association in Washington D.C.

In 1972 there were only about 200. About 150 have been formed since 1980 alone. By 1990, Dorsey estimates, the total may be close to 500. The short-line boom was born

in 1970 with the bankruptcy of the Penn Central, which led to the formation of Conrail in 1976 through the consolidation of seven bankrupt or unprofitable eastern lines. In 1980 Congress passed a law that speeded and simplified procedures for large railroads to abandon their short, unprofitable segments. This “brought a new interest in railroads by entrepreneurs,” Dorsey says, and created “a natural mix that has blossomed since 1980.”

Among the ingredients of that mix is the absence of costly and restrictive work rules that govern large roads. -A typical short line has a lean, versatile, non-union staff. Like many shortline presidents, Jim Stuckey often drives a locomotive himself.

As the big railroads prune their systems through abandonment, the entrepreneurs move in and turn the short lines into profitable enterprises, usually as freight-haulers. In recent years, Dorsey says, “you can count on your hands the number of failures in the short-line railroad business.”

He is concerned, though, about the business’s future. One priority of organised labour in the new Democratic Congress is to strengthen protection for shortline employees. Strong restrictions on management “would kill the short-line boom that we have seen in recent years,” Dorsey says. “Prospects for future growth would be stifled.” He and others acknowledged railroading’s romantic aura, the durable mystique that attracts many of the entrepreneurs in the first place. But, Dorsey says, “I don’t know of anyone that has invested as a tax write-off or solely because he has a lot of spending money gained in some other area. As far as I know, they are all good, solid businessmen looking for the buck in the old fashioned way.” Stuckey does not fit that mould. He is a soft-spoken Alabamian, a retired Army veterinarian, and a life-long lover of trains. He and a small group'of investors bought the Maryland Midland in 1978, began operations on 29km of track in 1980, and acquired 60km more in 1983. It has not been easy. On the

very first run of the new line, the locomotive’s brakes were not working. The big diesel slammed into a loaded freight car and, according to a history of the road, “while many well wishers shared our embarrassment, No. 102 limped off on one diesel engine to Walkersville for inspection and repairs.” “In many respects it is an extremely tough business; there is no two ways about it,” Stuckey says. “You essentially walk a tightrope at any moment.” Maryland Midland almost fell off the tightrope into bankruptcy during the 1982-83 recession, he says, but the initiation of passenger tours into the nearby Catoctin Mountains saved it. The tours remain an important part of the business.

Maryland Midland’s troubles pale compared with those of the South Branch Valley Railroad in Moorefield, West Virginia. Most of that road’s 85km were knocked out of commission by a devastating flood in November, 1985.

South Branch, perhaps the only State-operated short line, was “really looking like a rail-

road” a few months before the flood, says Donald J. Baker, jun., executive director of the West Virginia Railroad Maintenance Authority.

The estimated damage was $lB million and included the loss of four major bridges. Repairs have started and a nine-mile segment is operating, but Baker says it is unlikely that the line will return to full operation before spring, 1988.

In contrast, the Strasburg Rail Road, with its immaculately maintained vintage steam locomotive and passenger cars, thrives as an excursion line. Each tourist season it hauls more than 300,000 riders on. a ninemile round trip from its East

Strasburg, Pennsylvania, terminal through Amish farm country to Paradise, Pennsylvania. Freight revenues are minimal. "Really, what we are doing here is putting on a show," says

Ellis R. Bachman, the Strasburg undertaker who is vice-president of the short line, which dates back to 1832 and calls itself the oldest continually operated railroad in North America. “We are trying to keep the atmosphere of old-time railroading,” he says.

Making a profit on short lines