California State Rail Plan 2005-06 to 2015-16

Chapter XVII - Funding
CHAPTER XVII
FUNDING
ECONOMIC ROLE OF SHORT LINE AND REGIONAL
RAILROADS
There are about 500 short lines and regional railroads in North America.
Though their individual roles may vary, they typically feed traffic to the high
volume, main-line rail routes owned by the Class Is.
The total number of short lines and regional railroads has been growing. In 1980,
there were about 220 companies. Driving this growth has been the rationalization
efforts of Class I railroads, spinning off numerous light density branch lines 19 in
an effort to control costs. The Class Is either sold many lines outright or leased
components of their operations to private operators. 20
The short line railroads, with 1,697 miles (27 percent) of the State’s rail mileage,
are facing significant problems. Many California short line railroads serve
industries along the I-5, I-10, I-40 and I-80 corridors and near the Ports of
Los Angeles, Long Beach, Oakland, Hueneme, Stockton, and Sacramento.
These railroads handle over 800,000 annual carloads of international freight.
Their primary concern is their inability to handle the new industry standard
286,000-pound rail cars on lightweight track and bridge infrastructure. Short line
railroad infrastructure that provides congestion relief along the major global
gateways needs to be upgraded to accommodate the 286,000-pound rail cars that
carry international freight.
SUSTAINABILITY OF SHORT LINES AND REGIONAL
RAILROADS
Like Class I railroads, each short line and regional railroad is paid for moving cars
on their railroad. In cases where short lines interchange cars with Class I
railroads, these carriers share their revenue with the short lines. For a sustainable
operation, short line revenues must be sufficient to cover both operating costs and
capital costs. Operating costs include labor and fuel, among other things.
Capital costs include improvements to rolling stock (i.e., vehicles) and track and
bridges, among other things. Often revenues have proven inadequate to cover
both operating and capital costs of short lines, and public funding sources have
been needed to sustain the lines.
19 The term “light density lines” is applied generally to branch line that generates significantly less rail traffic
compared to the main line or a heavily used branch line.
20 Class I route miles declined from more than 200,000 in 1970 to less than 120,000 in 1995. Over the same period,
route mileage of Class II and III railroads increased from less than 15,000 to over 45,000 in 1995.
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