"Rule of 100" continued from Resources Page:
Some say Rules of Thumb are meant to be broken. Others of us maintain they are useful things to have around when you're trying to figure out whether the Fallen Flag & Eastern Shortline will ever make any money.
The Rule of 100 says that to be profitable a shortline must average 100 revenue carloads per mile per year. To begin, assume operations five days a week because anything less will kill you in car hire and your car suppliers in cycle time. You have to have somebody to answer the phone and handle event reporting, somebody to look after the power, probably two somebodies to look after the track and facilities. You'll also need two CLEs to run the train. Pay these fine folks $20 an hour, your self $40,000. With a 50% burden you're already up to $268,000 before turning a wheel.
Two decent GP-somethings will set you back maybe 75 grand each. They'll need $50 a day in parts & supplies and will burn 80 gallons a day of diesel fuel at a buck-fifty a gallon. Call it $100,000 a year including depreciation over 14 years. Add 20% GS&A and a 10% profit margin and you're up to $500,000 a year and still you've yet to turn a wheel.
The FF&E will want to maintain its track to FRA class 2 (25 mph) standard because it's safer than excepted or FRA class 1 (10 mph) and because you can get your work done twice as fast. If you've already got class 2 track, keep it there. (Many's the shortliner who let it degrade to class 1 only to have to bite the bullet and restore it later on.) FRA class 2 track requires eight good ties per 39-foot rail length -- see 49CFR213.109 if you doubt me. That works out to 1083 good ties per mile; with 30-year tie life you have to replace 36 a year.
Figure $50 a tie installed and fifty cents a foot for tamping and surfacing and it works out to $4445 per mile. Call it $5000 per mile per year. Do the math and see that a 15-mile railroad needs $75,000 a year just to keep the track up to class 2 spec. A 30-mile railroad needs $150,000 and a 60-mile railroad needs $600,000.
Now go back to the Rule of 100 and see what happens with 1,500 cars for a 15-mile railroad, 3,000 cars for a 30-mile railroad and 6,000 cars for a 60-mile railroad. Average shortline handling fees run about $250 per car nationwide. Car hire will run $20 a day depending, and for argument's sake say 40% of the cars are private with no mileage to the shortline. Say car hire exposure runs five days or $100 per car.
Thus the FF&E will need to budget $90,000 to $360,000 for the 15, 30, or 60-mile railroad. Now add it all up and see the total operating budgets for these three railroads are $650,000, $800,000 and $1.2 mm respectively. Divide each of these totals by $250 a car and see how many cars it takes to cover the nut. Because of the high fixed cost, it'll take from 2,500 to 3,000 cars to do it on the 15 and 30-mile properties and 6,000 will cover it with a few to spare on the 60-mile railroad.
Like I said, rules of thumb are meant to be broken. But the Rule of 100 is a great place to start. I have the spreadsheet all set and ready to go if you wish. Drop me a line and I'll send it to you FREE. Your only cost is a brief note telling me how it worked. [Offer open only to persons actively employed in or by the railroad industry.] (1/17/2007)
burberry mens outlet prada brown purse prada 23ys factory stores online chatgpt prompt generator prada crossbody wallet cardinal building gucci officiel prada dog backpack prada scarf mens captain epaulets dhgate prada loafers prada velvet bag jack spade darrow brief 1500 instagram followers gucci sklep online prada water splash centauri specialty insurance co prada wednesday shoes chicken franchise chatgpt competitor limitations of chatgpt automatic followers instagram prada fairy premium shops printing concepts carbon prada cologne like chatgpt prada outlet shoes chatgpt for free fondazione prada milan fish on bait company qutlets prada loafer platform gaining instagram followers valentine texas prada instagram followers analyzer cost of chatgpt prada pr 57xs prada thunder yellow prada shirt red prada boots chatgpt 原理 instagram followers legit prada d iris birkenstock outlet store scraping instagram followers pantone reflex blue cmyk beyonce instagram followers prada jeans women prada kiss perfume john lures instagram followers 5000 chatgpt on iphone prada pet carrier nike prada native american amazing grace free chatgpt alternative automate instagram followers prada shoulder bags legit instagram followers williams chicken fort worth tx cork board colors uggs usa outlet online cynthia baum instareach instagram followers prada 18wv chatgpt nyt cucci shirt ugg discount outlets clean followers instagram women's prada eyewear 200 followers instagram siding proposal sample men's outlet clothing online jordan peterson chatgpt chatgpt cli whack bat large cork board who own chatgpt prada reedition 2005 chatgpt limit rosemont restaurants chatgpt 原理 italian restaurants near o hare airport gucci clothing line chatgpt trial snow patrol run lyrics meaning mutual followers instagram غوتشي prada promenade bag prada cabazon yokohoma prada wiki chatgpt chatgpt whatsapp prada jackets sunglass prada prada bag authentic elvis and lisa marie sing in the ghetto prada paradoxe set brice mcmillan aaa catalina island packages prada impavid sunglasses trackgram instagram followers
Site contents copyright 1995-2020 The Blanchard Company except as indicated herein. All rights reserved.