Re: questionable numbers
Author: SP5103
Date: 06-30-2011 - 12:20
> But, the fact is, if they're not moving at least 100 loads per mile, per year, they're not breaking even. Standard rule of thumb for branchline economics.
Absolute B.S. While moving 100+ cars per mile is certainly a good thing in most cases, it does not guarantee success. I know one shortline that (I am guessing was around 100 cars a mile) sold most of their operations because their CMA with UP did not pay real well, and they had numerous signaled grade crossings to maintain that took an excessive chunk out of their revenues.
I also worked a line on the northern plains where we moved less than 50 cars per mile over light rail but still made money because of the way the agreement was set up. The Class 1 it was leased from did (and still does) appreciate the value of it as a feeder line despite competing with BN/BNSF in the region.
Bottom line - revenues must exceed long term costs regardless of the car count. In NWP's case, track costs will be shared with the future SMART operations - potentially lowering the expense of both operations.