Tuesday, May 14, 2013

Shortline Freight Rail Captial Programs

Shortline railroads are small regional or branch railroads that serve local communities. Officially classified as Class II or Class III railroads, they operate less than 350 miles of track or have less than $398.7 million in annual revenue. There are seven large Class I railroads in the US, including the Burlington Northern Santa Fe and the Union Pacific, and there are 561 non-Class I railroads in the US, operating over 43,000 miles of track with an aggregate annual freight revenue of $4 billion. As of 2005, shortlines operated 29% of all U.S. rail mileage and were responsible for 25% of the total freight shipped on larger, Class I railroads.

So, why does this matter?
Most shortlines are former main lines or branches of larger Class I railroads that were sold or abandoned when those railroads no longer wanted to operate or maintain them. Part of this is due to the economies of scale Class I railroads achieve with larger "unit trains" of all coal or all intermodal containers.Many shortlines are still highly economically viable and serve industrial, manufacturing, and agricultural properties. As smaller localized companies, they often pursue bottom-up economic development in the communities they serve. However, when larger railroads plan on abandoning lines they cease maintaining them. This means that many shortlines face capital problems around targeted, key pieces of infrastructure like bridges. 

Freight rail is itself a key mode that is often overlooked. Rail is about four times more fuel efficient than trucking and can haul one ton of goods an average 476 miles per gallon of fuel. Shipping by r
The Buckingham Branch Railroad. Source; http://www.trainweb.org/varail/railimages/bremo1.jpg
ail can decrease greenhouse gas emissions by 75% and one rail car has the capacity of three or four trucks. About one-third of all US exports are shipped by rail. In light of funding shortages for highways, private rail networks will likely become more important for certain commodities in the coming years.

Capital Programs
Some states provide grants or loans to shortline railroads to bridge this gap. My paper examined two of these program in Minnesota and Virginia. Virginia's program  provides 70/30 matching loans to railroads to improve necessary infrastructure. It was created in 1991 and is allocated just over $3 million annually. The state cataloged all projects on the nine shortlines in the state and developed a long-term plan to address them. The program is fully funded for the current six-year cycle that targets key projects, but the longer term project list is significantly larger than the funding stream. 

Minnesota Prairie Line. Source: http://www.railpictures.net/photo/276609/.
Minnesota has a similar program called the Minnesota Rail Service Improvement Program (MRSI). It was created in 1976. Since that time, changes in the State Legislature have reduced the amount of money in the program, but the state maintains that the fund now covers itself. Minnesota's program has two halves: one that helps rehabilitate economically viable but deteriorated lines, such as the Minnesota Prairie Line that is owned by the Minnesota Valley Regional Railroad Authority. MRSI funds are helping increase operational speeds form 10mph to 25mph. The other half of the program provides loans up to $200,000 for improvement of specific infrastructure and must be repaid within 10 years.  

Evaluation
On the whole, these programs serve their purposes well. In terms of adequacy, shortline infrastructure programs often have higher needs than funding. Minnesota's program is less efficient than Virginia's because it is less nuanced. Virginia has other parallel funds to help develop industrial spurs and to improve passenger rail corridors. Minnesota's program provides smaller amounts of money that are not that much more competitive than private capital for targeted improvements. By require various levels of matching grants, these programs require the private railroads to have some "skin in the game," and by that measure they are somewhat equitable. However, these programs still see fractional amounts of a state's funding. Sustainability is contingent on the political process in states like Virginia that provide annual appropriations. In Minnesota, the fact that these loans are revolving help with sustainability.  

Conclusion
More research is needed on the economic impact of these programs, but some shortlines like the Buckingham Branch Railroad in Virginia seems to have benefited tremendously from relatively minimal state support, keeping hundreds of miles of former main line track in service and hauling hundreds of thousands of rail cars a year.

3 comments:

  1. Nơi nào nhận van chuyen hang di Da Nang uy tín. Nếu bạn đang tìm nơi đó hãy liên hệ với chúng tôi, chúng tôi cung cấp nhiều dịch vụ liên quan đến vận chuyển như chuyển hàng đi Hà Nội. Vậy thì hãy liên hệ với Proship chúng tôi. Với các dịch vụ đang cung cấp hiện nay của chúng tôi như dịch vụ ship hàng tại hà nội, cho thuê kho bãi, cho thuê đất trống, chuyển phát nhanh trong nước, ship hàng nội thành tphcm, dịch vụ ký gửi hàng hóa, dịch vụ bốc xếp, cho thuê kho quận 10. Đảm bảo khi đến với chúng tôi bạn sẽ hài lòng vì chúng tôi có tất cả các dịch vụ vận chuyển lưu trữ mà bạn đang cần.

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  2. Giám đốc đảm đang Nghiên cứu CBRE tại Singapore và khu vực Đông Nam Á, Desmond Sim nhận định: “Hiện vẫn còn phổ quát rào cản và giảm thiểu chanh xe di Bac Kan mà các nước trong khối ASEAN cần phải vượt qua”. đầu tiên là khả năng quản lý yếu kém của vận chuyển hàng ra Thanh Hoá, nguồn cung nhộn nhịp với thể dẫn tới biến động giá thuê mặt bằng vận chuyển hàng ra Bắc Giang.

    Điều này sẽ gây trì trệ hoặc thậm chí ngăn cản việc mở mang của những nhà bán sỉ. Thứ 2 là việc thiếu nguồn cần lao sở hữu tay nghề cao cũng là thách thức, mang thể gây trở ngại trong việc chuyển hàng đi Hà Nội, vận chuyển hàng đi Bắc Ninhvận chuyển hàng hoá Cao Bằngchành xe đi Điện Biên Phủ và mở rộng của các nhà cung cấp công nghiệp với giá trị cao.

    Thứ ba là sự chênh lệch lớn về chuyên môn dịch vụ vận chuyển hàng hoá giữa những nước thành viên cũng tránh những ảnh hưởng hăng hái của buộc phải tự do hóa cần lao ASEAN.

    Cảm ơn bạn rộng rãi nhé.

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