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View Full Version : Which Class II will next become a Class I?


crazytiger
08-23-2009, 07:14 PM
:cuediscussion:

Ween
08-23-2009, 09:03 PM
EJ&E already is a Class I...it's CN.

Andrew Blaszczyk (2)
08-23-2009, 10:47 PM
Well EJ&E and Pan Am are already included in that. I'm not 100% sure on how the Pan Am Southern deal works but I'm pretty sure its somehow under the NS banner?

I always though the MM&A would continue to grow and eventually hit the Class I mark but apparently business has leveled off some in the last year or so.

LIRR is primarily a passenger railroad so they would never fall into that category.

FEC is large but does not have much room to expand at the moment. CSX and NS are still heavily invested in the container traffic out of Jacksonville which I think would be necessary for FEC to get a share of in order to push it into that bracket.

Iowa Interstate and MRL are two on the list that both continue to do very well but still need that missing piece.

I wouldn't count out the WNY&PA who continues to gain trackage and therefore more customers throughout two states. Give them more of the Buffalo Line and maybe a coal line or two in central PA and they could possibly make it as a Class I.

Do I think any other railroad will ever become a Class I? No. Unless a Class I pulls out of a large market in either intermodal or coal then I do not think it will ever happen. CN continues to gobble up these smaller lines to gain access into the markets that do not have a major player or as competition.

Cool thread though. It is fun to dream!

BR&W as a Class I...Easton, PA to Oak Island (Newark), NJ. :-D Yes please!

jdirelan87
08-23-2009, 11:35 PM
Is this poll asking;

1) which Class II is most likely to increase their revenue enough to be classified as a Class I as defined by the FRA

or

2) which Class II railroad is most likely to be bought by a current Class I.

Clarification please

jdirelan87
08-23-2009, 11:38 PM
[QUOTE=Andrew Blaszczyk (2)
LIRR is primarily a passenger railroad so they would never fall into that category.
[/QUOTE]

The requirements for being a class one make no mention about the exclusion of passenger revenue. Amtrak and VIA are both considered class ones, although this is rarely recognized in practice.

TAMR159
08-24-2009, 12:48 AM
It's a revenue standard, as John said. Since the FEC is already a finely tuned machine, I would suspect they would be the first ones from the financial standpoint. Some shortlines/regionals have lots of track mileage and not so many customers as compared to the "ideal"...I'm not saying that this is representative of their financial earnings, but it is common among the larger shortlines/class twos (when large is determined by track mileage).

Andrew Blaszczyk (2)
08-24-2009, 01:53 AM
The requirements for being a class one make no mention about the exclusion of passenger revenue. Amtrak and VIA are both considered class ones, although this is rarely recognized in practice.
I stand corrected. There are indeed 10 in North America.

ShortlinesUSA
08-24-2009, 02:18 PM
My understanding of the poll is which one of these will be taken over by a class 1, not expand and become large enough to achieve class 1 status. That said, I have cast my vote for FEC. Reason: RailAmerica is now owned by Fortress Investment, a hedge fund. They'll likely cash in some chips at some point, and FEC would bring them more than just about any property they have.

Andrew Blaszczyk (2)
08-24-2009, 02:39 PM
My understanding of the poll is which one of these will be taken over by a class 1, not expand and become large enough to achieve class 1 status. That said, I have cast my vote for FEC. Reason: RailAmerica is now owned by Fortress Investment, a hedge fund. They'll likely cash in some chips at some point, and FEC would bring them more than just about any property they have.
I think he means which is the most likely to reach the $250 million mark necessary for Class I status. How or why would LIRR or ARR be taken over.

But I don't see why we can't ignore the poll and discuss both.

I'd have to agree that the FEC would be the next to be bought. Since CSX already has access to southeastern Florida, it would have to be NS to take it over unless CP and CP continue to buy everything in sight. ;-)

crazytiger
08-25-2009, 01:50 AM
I was meaning "Who would next hit the $250m mark?"

Is EJ&E really CN?

:lol: about FEC becoming CP. Thats a hysterical thought.

What about Montana Rail Link? From my limited knowledge on the topic (of them), they seem to be in a position to do it.

ShortlinesUSA
08-25-2009, 02:21 AM
EJE became part of CN effective in January 2009. The portion that switches the steel mills was not included in the sale and is now the Gary Railway.

nikos1
08-25-2009, 03:31 AM
I had my bets on ICE/DME but they became class 1 in the wrong way........

jdirelan87
08-25-2009, 03:38 AM
I was meaning "Who would next hit the $250m mark?"

Is EJ&E really CN?

:lol: about FEC becoming CP. Thats a hysterical thought.

What about Montana Rail Link? From my limited knowledge on the topic (of them), they seem to be in a position to do it.

It should be noted that the last few increases to the minimum revenue required to be a Class I have been a result of several large shortlines asking the FRA to raise the bar (or so I have heard, never actually seen any written proof of this). Most shortlines are not interested in the increased fees and paperwork associated with being a Class I. So if Class IIs are activity looking to avoid becoming Class Is, isn't this conversation a moot point?

ShortlinesUSA
08-25-2009, 12:05 PM
Not to mention that becoming a class 1 would, at least in several states, shut them off to grants and low-interest loans provided to shortline railroads. Either that, or if business is that good, they'll become a class 1 by being bought out.

DME 6361
08-25-2009, 08:07 PM
The class II's and other shortlines, regionals are the only real railroads left . Why would you want them to go away just to bring in more reguations,management and mainly scrapping out a lot of the engines, lines and equipment that don't need to be! This is the only piece of American RR we have left and you would rather have it go away?

DME 6361
08-25-2009, 08:49 PM
I hope you guys know that the DME [350m--FEC over 250m a year proves that the it takes more than that to become a class I--like 500 million. And as for the MRL becoming class I--WHAT???????????: How would that be possible since the BN made the MRL from splitting up the line in 1989 from class I to class II. That would be impossible since they turned it into class II for a reason and a little known fact that the BN still owns them on a 99 year loan! Its called BN being smart with regulations on trains over grades, locals, and 40,000 less a year getting paid to the MRL train crews!

TrainFanNZ
08-25-2009, 09:24 PM
Well, my vote goes to either the W&LE or the MRL

what about the Utah Railway Co.

Slopes09
08-25-2009, 10:41 PM
This question doesn't make much sense. No Class II railroad wants to become a Class I railroad in its own right. As has been stated, that means more regulation, taxes, etc., which would bog down their earnings. I seem to recall in past years, several Class IIs, including (though not necessarily limited to) MRL and FEC technically reached the Class I threshold. Both petitioned the STB to raise the threshold so that they could remain a Class II, and this was granted. Consequently, short of being merged into a larger line, I don't foresee any Class IIs becoming Class Is anytime soon. If DM&E hadn't been bought by CP, they may have stood a chance with the Powder River Basin extension, though that is pure, personal speculation.

JRMDC
08-26-2009, 01:31 AM
If DM&E hadn't been bought by CP, they may have stood a chance with the Powder River Basin extension, though that is pure, personal speculation.

I don't know what the numbers would have looked like, but you can bet if DME would have been on the verge, that BNSF and UP would have been in there to make sure DME became class I so they wouldn't have had the the cost advantage of being a class II. All moot now.

crazytiger
08-26-2009, 05:40 PM
I hope you guys know that the DME [350m--FEC over 250m a year proves that the it takes more than that to become a class I--like 500 million.

A Railroad has to be over $250m for three consecutive years. They mus not have met this.

And as for the MRL becoming class I--WHAT???????????: How would that be possible since the BN made the MRL from splitting up the line in 1989 from class I to class II. That would be impossible since they turned it into class II for a reason and a little known fact that the BN still owns them on a 99 year loan! Its called BN being smart with regulations on trains over grades, locals, and 40,000 less a year getting paid to the MRL train crews!

Just because the original Intent was being a C2 doesn't mean it would stay being a C2.

This question doesn't make much sense. No Class II railroad wants to become a Class I railroad in its own right. As has been stated, that means more regulation, taxes, etc., which would bog down their earnings. I seem to recall in past years, several Class IIs, including (though not necessarily limited to) MRL and FEC technically reached the Class I threshold. Both petitioned the STB to raise the threshold so that they could remain a Class II, and this was granted.

True, that's why there is a tenth option on the poll. "None will, the don't want to pay the extra $$$"

Not to mention that becoming a class 1 would, at least in several states, shut them off to grants and low-interest loans provided to shortline railroads. Either that, or if business is that good, they'll become a class 1 by being bought out.

^^^, Same to jdirelan87

I had my bets on ICE/DME but they became class 1 in the wrong way........

QFT.

chuckman
09-09-2009, 09:47 PM
I'm not an expert on this but I think the Alaska railroad because with increasing action in Alaska and talk of possible oil drilling, along with the potential to open up new rails as the territory is relatively "new" to the railroad game so to speak. Where as with most others, unless they REALLY increase they're revenue or buy new territory then they have something going for them. However it it won't be The Alaska it'll be FEC!

ichogger77
09-28-2009, 08:00 AM
I hope you guys know that the DME [350m--FEC over 250m a year proves that the it takes more than that to become a class I--like 500 million. And as for the MRL becoming class I--WHAT???????????: How would that be possible since the BN made the MRL from splitting up the line in 1989 from class I to class II. That would be impossible since they turned it into class II for a reason and a little known fact that the BN still owns them on a 99 year loan! Its called BN being smart with regulations on trains over grades, locals, and 40,000 less a year getting paid to the MRL train crews!

not sure where you get your info but its a 59 year lease and it had nothing to do with regulations over grades. The T&E employees on the MRL do not make $40,000 a year less than the BNSF. The MRL boys have a very good contract with the BLE and are almost at national agreement rates. It was a squabble with the state of Montana and the BN over some tax issues and some hard headed upper management with some poor ideas. The BNSF does not own the MRL. Dennis Washington owns the MRL as well as the SRY and use to own the IMRL which you now know as the old IC&E or "the new DM&E"

Slopes09
09-28-2009, 08:29 AM
I'm not an expert on this but I think the Alaska railroad because with increasing action in Alaska and talk of possible oil drilling, along with the potential to open up new rails as the territory is relatively "new" to the railroad game so to speak. Where as with most others, unless they REALLY increase they're revenue or buy new territory then they have something going for them. However it it won't be The Alaska it'll be FEC!
I'm not sure how it works exactly, but could the Alaska railroad even become a Class I since it's state owned? Unfortunately, I'm not familiar with their situation. Same with the Long Island Railroad.