When is a customer "officially" a short line's customer?

A general discussion about shortlines, industrials, and military railroads

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When is a customer "officially" a short line's customer?

Postby SouthernRailway » Tue May 28, 2013 7:53 pm

Is there any kind of official documentation that a short line puts in place with a prospective customer to make the customer "official"?

For example, does a prospect sign a contract with the railroad, specifying a minimum number of carloads, minimum payments, minimum duration, etc.?

Or are prospective customer relationships a lot more informal--does a company just call a shortline and say, for example, "You know those 10 autoracks? They're ready to go anytime."

I'm dealing with a shortline that has "promises" of customers, and I'd just like to confirm what proof I can get for those "promises" of customers actually becoming customers.

Thanks.
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Re: When is a customer "officially" a short line's customer?

Postby wigwagfan » Sat Jun 22, 2013 12:15 am

I'm not an expert but my understanding is that to become a railroad customer there are various steps. You can't just call the railroad and say "ship my car".

Most of them require you to apply for credit, otherwise they expect a wired payment up front. They don't take personal checks. Applying for credit means submitting letters of credit from a bank among other things.

If you have your own spur or siding, you will probably have to sign a contract that specifies you will ship so many cars per year, or you will be required to pay the railroad to maintain the switch and so much of the trackage (or the entire spur/siding). Don't pay, they'll take the switch out. Want a new switch - you'll pay for it (unless you can guarantee a lot of cars).

If you are using a team track (railroad owned track) you will have to provide insurance coverage, sign waivers that relieve the railroad of any responsibility while you are working on their property.

Once you are an established customer, then you can contact someone that will help you place car orders, release cars, and so on. But they'd prefer if you do it online. Up until 1993 the small town I lived in (McMinnville, Oregon) still had a Southern Pacific freight agent and you could walk into the depot and take care of business. When the railroad became a shortline the agent went away and you had to call Albany (about 50 miles away). I'm pretty sure today it's all centralized within Genesee & Wyoming so it's a toll free telephone number that gets answered out east.

The big difference between a shortline and a big railroad is that the shortlines generally try to attract business and work with customers, while the class ones have the impression that the customers work for them. The class ones don't like single car shippers - too much work for too little money. Especially a small time shipper that ships only 10 cars a year, and whose spur is located 40 miles away from the nearest yard and the switch is on a busy mainline track, so the railroad has to send a switch job out to the boonies and foul up the mainline for an hour to switch out the car.
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