California State Rail Plan 2007-08 to 2017-18

2007-08 – 2017-18 California State Rail Plan• Congested intermodal terminals that delay shipments.• Lack of containers and rolling stock to handle traffic in and out of SouthernCalifornia.• Congestion on main lines and in terminals of eastern railroads that delaysshipments to and from California.• Information technology problems causing lost rail cars.• Delays to rail shipments related to increasing shared use of main lines bycommuter and intercity passenger operations.Although the report is some years old its basic findings are still relevant.An updated study is warranted to ensure that the most current information isavailable for use by the public and its decision-makers.Freight transportation is the foundation of economic development and regional,national, and global trade. As the freight rail system is improved, the commuterand passenger rail systems also are improved and help relieve congestion on thehighway system.SHORT LINE RAILROAD ISSUESShort line railroads play an important role in moving goods to and from Californiaregions and local communities. The commodities moved tend to have a lowtransportation cost to weight/volume ratio, which contributes to their attraction toshort lines, instead of trucks.There are 27 short line and regional railroads in California today. Most of themare privately owned and employ between ten and 50 employees. Revenues for themajority of the short lines are less than $5 million annually.None of the short lines have revenues exceeding $40 million per year. Operatingcosts were not cited. However, in California, operating costs range from about75 percent to 110 percent of revenues. The latter figure would suggest that shortlines with operating costs higher than revenue have other income sources such asincome from rental property or lease income from placement of utilities in theirrights of way.INTERFACE WITH CLASS I RAILROADSThe short-lines are formed from competitive bids for track spun off by largerrailroads, and the relatively high purchase prices that result can bring with themsignificant capital costs. In addition, the lines contend for traffic in maturemarkets against other rail as well as trucking alternatives. The central issues forthe short-lines are two forms of dependence: on Class I connections for theirmarket viability, and on carload traffic for their baseload volume. As Class Isystems demarket the carload freight – or simply as its market share continues todecline – short-line roads are threatened with marginalization. Although creative230