A short line is an independent railroad company that operates over a relatively short distance. Short lines generally exist to link two industries requiring rail freight together (for example, a gypsum mine and a wall board factory, or a coal mine and a power plant) or to interchange revenue traffic with other, usually larger, railroads. The short line sector of the rail industry has been going through somewhat of a renaissance since legal changes in the United States in1980 made it easier for class 1 railroads (those with revenue in excess of $319.3 million of revenue) to shed unprofitable track. The short line sector is made up of two separate categories of railroads – “Regional Railroads” and “Short Lines”. A regional railroad is defined as operating at least 350 miles of track and generating between $40 million and $319.3 million. A short line railroad is defined as having less than 350 miles of track and generating less than $40 million in revenue.

According to the American Short Line and Regional Railroad Association (ASLRRSA), these railroads operate about 29% of the track mileage, generate 9% of all rail freight revenue and employ 11% of all rail employees. In the United States, there are 418 members of the association. Click on to http://www.aslrra.org/home/index.cfm to see a complete listing of the companies. (Note that this listing does not include railroads that are not members of the association). In Canada there are about 50 short lines that move 352.9 billion revenue tonne-kilometres of freight annually over 48,900 km of track. Click on http://en.wikipedia.org/wiki/List_of_Canadian_railroads to see a list of short line railroads in Canada.

The short lines work in a service niche that the main lines do not find economical. They operate in all regions of the United States and in the Yukon, Northwest Territories and every province of Canada except Prince Edward Island. The majority of Canadian short line railroads were established after 1996 when changes to Canada’s Transportation Act made these companies easier to establish on track that CN and CP wanted to abandon. They have a different cost model and target smaller customers where class 1 railroad downsizing has left the larger customers as a more profitable business segment.

However, this is not always the case. For example, Rail America Inc. (http://www.railamerica.com/), which operates 41 short line and regional railroads, with approximately 7,800 miles of track in the United States and three Canadian provinces, is going after large enterprises such as a Honda assembly plant that is currently being built.

Short line railroads in Canada are big in coal, wood pulp, chemicals, newsprint, paper, salt, grain, fertilizers, consumer goods and petroleum. In Quebec alone, short line railroads carried over 220,000 carloads in 2005. The 12 shortlines with their 2,351 km of track, plus several more owned by major industries such as Alcan, the Iron Ore Company of Canada, Cartier Mining and Wabush Mines, combined have more track than the 2,649 km operated by CN and CP.

According to Roger Cameron, Director, Public Affairs with Rail Association of Canada, the short lines in Canada have doubled the amount of traffic they originate in Canada. This growth appears to be driven by several factors. A smaller customer base allows the short line to focus on the specific needs of their clients and provide services, for example, more switches per week, than might be available from a class 1 railroad. Their ability to link to one or more class 1 railroad is beneficial as is their fuel efficiency, providing them with cost advantages against trucks on shorter distances. Also, they can add and decrease capacity with the same crew and locomotives.

It will be interesting to watch the developments in this industry. As the short line industry continues to grow and as some large players (e.g. Rail America with 41 railroads, Omnitrax - www.omnitrax.com/ - with 17 railroads in the United States and Canada) take shape, will we see the re-emergence of another North American class 1 railroad? This would reverse the process established in the 1990’s when the six industry giants came into being through mergers and acquisitions.