Hi friends,

How's the holiday season treating you? Hope the coach seats and the cookies are all warm!

A gent named "Scooter" mentioned something in the NH&I thread below that I want to pull out into a new thread. Replying to a comment I made about the value of good management, he wrote:

"I give the current Pres a lot of credit for running the place like a business. But it runs marginally profit-wise. NH&I will never make millions, it barely survives. "

I've heard similar things about other lines, and it always strikes me odd that people comment on shoestring operations as if it is a negative.

In the shortline world, just getting by with a small profit is common. You don't buy 15 miles of 75lb rail because you want to be able to afford a suite in Trump Tower.

In fact, I will go as far as to say that just getting by with a small profit that allows you to stay open is a victory.

Something that I think is often overlooked is that many people who run for-profit shortlines and tourist operations do it as much for their own satisfaction as they do for monetary return.

I know a few shortline "big wigs" who could probably make just as much cash working as a barrista at Starbucks, and certainly do it with less headache.

But fortunately, they have a passion that makes them more interested in trains than lattes.

One fellow in particular, who is a friend of a friend, runs a line in a very rural and scenic mountain area. It's a 2-3 man outfit at best, and I really don't know how he gets by. But he does, and slowly he's expanding his line and his business. However, if you ask me, the quality of life where he lives, the job satisfaction of what he does and his ability to sustain both over 20 years or more makes him one of the richest people in the world.

The NH&I is not alone among tourist shortlines that occupy valuable land. Could the owners of such lines sell-out? Sure. Many have, in part or whole. But if the passion is there, and the management is there, these operations can continue on a break-even basis indefinitely.

The post-mortem for the New Hope Branch has been written over and over again, and it has always proven to be premature.

There is a certain negativity among NJ/PA area buffs, and the NH&I has caught its share. Like Steamtown, it is a magnet for those who like to say they "know how to do it better." (I am not attributing that to anyone in specific on Interchange)

If I listened to all the nay-sayers, I would never believe I could ride steam in New Hope or Scranton, or visit a fleet of Baldwins in South Jersey or bastions of Alcos in Jersey and PA.

These operations that combine historic preservation with daily service are not there because they are big money-makers. They are there because they can support, however marginally, the passion and business of their owners.

I, for one, am grateful.

Rob

Rob,

You hit the nail, er, spike, right on the head! Very well said! You have covered every tourist or preserved railroad line I know about very well; it is indeed about the passion for railroading, not any money that could be made.

> Hi friends,

> How's the holiday season treating you? Hope
> the coach seats and the cookies are all
> warm!

> A gent named "Scooter" mentioned
> something in the NH&I thread below that
> I want to pull out into a new thread.
> Replying to a comment I made about the value
> of good management, he wrote:

> "I give the current Pres a lot of
> credit for running the place like a
> business. But it runs marginally
> profit-wise. NH&I will never make
> millions, it barely survives. "

> I've heard similar things about other lines,
> and it always strikes me odd that people
> comment on shoestring operations as if it is
> a negative.

> In the shortline world, just getting by with
> a small profit is common. You don't buy 15
> miles of 75lb rail because you want to be
> able to afford a suite in Trump Tower.

> In fact, I will go as far as to say that
> just getting by with a small profit that
> allows you to stay open is a victory.

> Something that I think is often overlooked
> is that many people who run for-profit
> shortlines and tourist operations do it as
> much for their own satisfaction as they do
> for monetary return.

> I know a few shortline "big wigs"
> who could probably make just as much cash
> working as a barrista at Starbucks, and
> certainly do it with less headache.

> But fortunately, they have a passion that
> makes them more interested in trains than
> lattes.

> One fellow in particular, who is a friend of
> a friend, runs a line in a very rural and
> scenic mountain area. It's a 2-3 man outfit
> at best, and I really don't know how he gets
> by. But he does, and slowly he's expanding
> his line and his business. However, if you
> ask me, the quality of life where he lives,
> the job satisfaction of what he does and his
> ability to sustain both over 20 years or
> more makes him one of the richest people in
> the world.

> The NH&I is not alone among tourist
> shortlines that occupy valuable land. Could
> the owners of such lines sell-out? Sure.
> Many have, in part or whole. But if the
> passion is there, and the management is
> there, these operations can continue on a
> break-even basis indefinitely.

> The post-mortem for the New Hope Branch has
> been written over and over again, and it has
> always proven to be premature.

> There is a certain negativity among NJ/PA
> area buffs, and the NH&I has caught its
> share. Like Steamtown, it is a magnet for
> those who like to say they "know how to
> do it better." (I am not attributing
> that to anyone in specific on Interchange)

> If I listened to all the nay-sayers, I would
> never believe I could ride steam in New Hope
> or Scranton, or visit a fleet of Baldwins in
> South Jersey or bastions of Alcos in Jersey
> and PA.

> These operations that combine historic
> preservation with daily service are not
> there because they are big money-makers.
> They are there because they can support,
> however marginally, the passion and business
> of their owners.

> I, for one, am grateful.

> Rob


holombo@pacbell.net

> You hit the nail, er, spike, right on the
> head! Very well said! You have covered every
> tourist or preserved railroad line I know
> about very well; it is indeed about the
> passion for railroading, not any money that
> could be made.

Yes, it is, but in the long term, the fact that these kinds of operations are just making enough to keep the doors open for now means that they are not making enough to keep the property and equipment up to a satisfactory level, much less make improvments. There will come a time when that 75-pound rail must be replaced or The Little Engine That Could needs major work, and ther won't be enough money (or credit) to pay for it.

Then what? Pass the hat?

Mr. REal,

Your point is well taken... however, good management of the shoestrings gets you by. That was my point. The rural shortline I pointed out has gone through several locomotives, but has managed to preserve service on the line.

What happens when you need to put $250K into the teakettle?

Well, if you have run your shoestring well, there might be some cash in the bank. Likely, you will have to make a business decision on whether your teakettle is a money maker or a money burner. If you have a good real estate asset, chances are financing will come a little easier.

If your equation is that steam=riders=revenue, then a good manager has balanced the act to prepare for the day of reckoning. A good manager will predict coming repairs. As I am sure you know, the good manager's best friend is the good shop foreman who knows every thin spot on the teakettle better than he knows the freckles on his wife's face.

A realistic manager plans for his business to continue, or to have an exit strategy. That's the game you play and it is where the passion comes in... and the fortitude.

A shortline that continues along, or one that is sold at the exit-strategy price, has been properly managed. However, if it is a passion of the owner, perhaps only the first option matters.

There is another old fashioned aspect, when it comes to freight shortlines, that often gets overlooked... I know more than one shortline operator who puts community over self. They know that the service they provide directly allows for jobs to continue in their county or town. That motivation has saved more than one rail from becoming the dreaded trail.

All in all, Mr. REal, I agree with you but I am pulling the rug out from under the excuses. 9 times out of 10, bad management is what leads to the situations you discuss... that other 1 out of 10 times belong to mother nature and other forces.

As my shrink says, set realistic expectations and you won't worry.

For the buff, don't expect an operation like the NH&I to mint money. Don't expect them to put three engines in steam next year. Have the realistic expectation that they are doing the best they can. Then enjoy what they do and be pleased when the chance to do a little more comes along.

If you take a look around the preservation community, I think you will find that those with realistic expecations and good management of reality are the one's we keep pointing to as examples.

Just my $1.98.

Rob

> Yes, it is, but in the long term, the fact
> that these kinds of operations are just
> making enough to keep the doors open for now
> means that they are not making enough to
> keep the property and equipment up to a
> satisfactory level, much less make
> improvments. There will come a time when
> that 75-pound rail must be replaced or The
> Little Engine That Could needs major work,
> and ther won't be enough money (or credit)
> to pay for it.

> Then what? Pass the hat?

Rob,
From the above, I have drawn the conclusion that you are advocating what has been referred to as a MA&Pa; ie, a focused operation with a usable attractive ROW, a signature locomotive (steam, diesel, electric ...your choice), and a working train set. Routine maintenance and some pretty work ...no line of junk waiting to rot away, no restoration work ... a nice train ride not necessarily historically connected to the area. The only problem would be generating enough interest to keep your trains full to pay the bills, cover the fixed costs, pay a few salaries, get a few locals to volunteer, put a little in the bank for the future ...not a bad way to spend a career if that's your bag.



lamontdc@adelphia.net

> There is a certain negativity among NJ/PA
> area buffs, and the NH&I has caught its
> share. Like Steamtown, it is a magnet for
> those who like to say they "know how to
> do it better." (I am not attributing
> that to anyone in specific on Interchange)

Rob,

I think a certain part of the negativity comes from the fact that there's an atypical example to shortline railroading in the area... Strasburg. Too often, I think many fans look at Strasburg as the rule, rather than the exception, even though the dynamics of their success may not translate well to other properties. If anything, Strasburg is a RR that was "in the right place, at the right time." It's had its lean years, but it also benefits greatly from its location and surrounding attractions, which many other shortline operators don't ever have a chance of getting help from.

Many railfans also tend to remember Blue Mountain and Reading's toursit-train "Golden Years," where BM&R's management not only ran a substantial regular schedule, but a great deal of special events as well. Even then, if one looks at the situation realistically, they have to realize RBMN's management has come to understand that being such a big "player" in the tourist railroad field costs a good deal of money, and they've reoriented their business plan to give their railroad a healthier financial future over the long run.

I honestly believe it happens because many of us don't see or understand the business end of railroading, and it leaves people with unrealistic expectations of what a toursit railroad should be able to accomplish on a limited budget. If you start talking about operating ratios, demurrage fees, and other terms associated with the "business" portion of rail transportation, many would give you a perplexed look and ask how that relates to what kind of whistle is on their favorite steam locomotive.

In the course of my years involved in railroading, a total of 16 years in both shortlines and two Class 1's, I've run into a lot of fans who fit such a description. They'll ask you all sort of questions about why a particular railroad doesn't do this or that, but if you explain to them that just the simple fact of installing one mainline-grade tie into section of track, when adding up all the associated costs of materials and labor, runs in the neighborhood of $50 each ... and that a railroad can only do so much based on its costs, it's often like you've spoken to them in a foreign language.

That's one reason why I tend to favor a forum such as this, over some of the more "fan" oriented
sites, because the knowledge and wealth of information here is more extensive. I enjoy reading these types of messages much, much more.

Happy Holidays to everyone here!

Fiv4HghStk@aol.com

I guess that's true, if it is a for-profit Mom and Pop. But really, the same theories hold true for larger operations.

It is the Mom and Pop non-profits that seem to be not such a hot idea.

Rob

> Rob,
> From the above, I have drawn the conclusion
> that you are advocating what has been
> referred to as a MA&Pa; ie, a focused
> operation with a usable attractive ROW, a
> signature locomotive (steam, diesel,
> electric ...your choice), and a working
> train set. Routine maintenance and some
> pretty work ...no line of junk waiting to
> rot away, no restoration work ... a nice
> train ride not necessarily historically
> connected to the area. The only problem
> would be generating enough interest to keep
> your trains full to pay the bills, cover the
> fixed costs, pay a few salaries, get a few
> locals to volunteer, put a little in the
> bank for the future ...not a bad way to
> spend a career if that's your bag.

....in the railroad business?

Start with a lot of money!

Happy Holidays to all---

HP

hpincus@mindspring.com

> Your point is well taken... however, good
> management of the shoestrings gets you by.
> That was my point. The rural shortline I
> pointed out has gone through several
> locomotives, but has managed to preserve
> service on the line.

Fine. What about those locomotives it has "gone through," though?

> if you have run your shoestring well,
> there might be some cash in the bank.

Can't have it both ways. If there is cash in the bank, then it isn't a shoestring operation, unless you were able to put cash away by not maintaining the property and/or equipment.

> Likely, you will have to make a business
> decision on whether your teakettle is a
> money maker or a money burner. If you have a
> good real estate asset, chances are
> financing will come a little easier.

Not if you can't pay it back. Shestring, remember?

> If your equation is that
> steam=riders=revenue, then a good manager
> has balanced the act to prepare for the day
> of reckoning. A good manager will predict
> coming repairs. As I am sure you know, the
> good manager's best friend is the good shop
> foreman who knows every thin spot on the
> teakettle better than he knows the freckles
> on his wife's face.

> A realistic manager plans for his business
> to continue, or to have an exit strategy.
> That's the game you play and it is where the
> passion comes in... and the fortitude.

> A shortline that continues along, or one
> that is sold at the exit-strategy price, has
> been properly managed. However, if it is a
> passion of the owner, perhaps only the first
> option matters.

> There is another old fashioned aspect, when
> it comes to freight shortlines, that often
> gets overlooked... I know more than one
> shortline operator who puts community over
> self. They know that the service they
> provide directly allows for jobs to continue
> in their county or town. That motivation has
> saved more than one rail from becoming the
> dreaded trail.

> All in all, Mr. REal, I agree with you but I
> am pulling the rug out from under the
> excuses. 9 times out of 10, bad management
> is what leads to the situations you
> discuss... that other 1 out of 10 times
> belong to mother nature and other forces.

No way, Pal. It either supports itself or it doesn't. These are not excuses, they are ugly reality.

> As my shrink says, set realistic
> expectations and you won't worry.

> For the buff, don't expect an operation like
> the NH&I to mint money. Don't expect
> them to put three engines in steam next
> year. Have the realistic expectation that
> they are doing the best they can. Then enjoy
> what they do and be pleased when the chance
> to do a little more comes along.

Agreed.

> If you take a look around the preservation
> community, I think you will find that those
> with realistic expecations and good
> management of reality are the one's we keep
> pointing to as examples.

> Just my $1.98.

> Rob

And you might also find that the only thing keeping some of the shining examples going and shining is other sources of income. Such as contract work and parts manufacturing and repair work. IOW, they have to have a separate life support system for the steam trains. Again, that's good business management on their part.