GREATER ROCHESTER SHORTLINE RAILROADS
SOUTH BUFFALO RAILWAY, CO.
ADDRESS & PHONE: 2600 Hamburg Tpk., Lackawanna, NY 14218 - 716-821-3631
OWNERSHIP: Genesee & Wyoming, Inc,
REPORTING MARK: SB
RADIO FREQUENCIES: 161.190, 161.280, 452.925/457.925 (EOT)
- Metal Products
- Auto Parts
- Scrap Metal
ANNUAL TRAFFIC: 47,000 cars
INFRASTRUCTURE: 61 miles of track, 10 MPH speed
- Bethlehem Steel, South Buffalo
- Ford Motor Co., Blasdell
SCHEDULE OF OPERATIONS:
INTERCHANGE POINT & RAILROAD: Seneca Yard with BPRR, CSX, NS, CN, BSOR, CPR
HERITAGE / NOTES
1 EMD SLUG 1985 4 EMD MP15 1967? 7 EMD MP15 1967 19 EMD MP15 1967 20 EMD MP15 1967 30 EMD SW1200 1964 31 EMD SW1200 1964 32 EMD SW1200 1964 33 EMD SW1200 1964 34 EMD SW9 1952 35 EMD SW9 1952 36 EMD SW9 1952 37 EMD SW9 1952 38 EMD SW1200 1955 39 EMD SW1200 1955 42 EMD MP15 1975 43 EMD MP15 1975 44 EMD MP15 1975 45 EMD MP15 1975 50 EMD SW1200 1950 51 EMD SW1200 1950 52 EMD SW1200 1950 53 EMD SW1200 1950 72 EMD SW1200 1955 ? EMD SW1500 ? EMD SW1500
Genesee & Wyoming had been eyeballing this properties for years for an acquisition. In October 2001, this long term goal had finally been achieved.
Genesee & Wyoming gets new track
By Todd Grady
Democrat and Chronicle
(Tuesday, October 2, 2001) -- Genesee & Wyoming Inc. has agreed to purchase more than 52 miles of rail track from Bethlehem Steel Corp. The $36.4 million acquisition of the South Buffalo Railway helps GWI's continued growth through the creation of regional railroad networks. The South Buffalo connects to GWI's 700-mile Buffalo & Pittsburgh Railroad, part of the company's New York & Pennsylvania division, based in Towers Airport Business Park in Chili.
The division will add 84 employees from South Buffalo, increasing its staff to 314.
Genesee & Wyoming started as a 14-mile stretch of track in Livingston County, but it is now based in Greenwich, Conn.
GWI has made several attempts to acquire the South Buffalo since the early 1980s.
The switching railroad operates at an average speed of 10 mph.
"The South Buffalo has long been a targeted acquisition for Genesee & Wyoming" said Mortimer Fuller III, GWI's chairman and chief executive officer. "It marks the achievement of a long-term goal persistently pursued."
The railway's users include Ford Motor Co.'s Buffalo Stamping Plant.
GWI also plans to transport coal, salt and stone through the Port of Buffalo.
"In 2002, we expect the South Buffalo will have approximately $14 million in revenue," said Jack Hellmann, GWI's chief financial officer.
Full Text of Decision
SERVICE DATE - NOVEMBER 21, 2001
SURFACE TRANSPORTATION BOARD
STB Finance Docket No. 34107
GENESEE & WYOMING INC.-CONTROL EXEMPTION-SOUTH BUFFALO RAILWAY COMPANY
Decided: November 14, 2001
By petition filed October 1, 2001, Genesee & Wyoming Inc. (GWI or
petitioner) seeks an exemption under 49 U.S.C. 10502 from the prior approval
requirements of 49 U.S.C. 11323, et seq., to acquire control of South
Buffalo Railway Company (SB). We will grant the exemption.
GWI is a noncarrier holding company that directly controls Buffalo &
Pittsburgh Railroad, Inc. (BPRR), a Class II carrier that operates primarily
in New York and Pennsylvania and connects with SB near Buffalo, NY. GWI also
directly controls 13 Class III rail carriers: Allegheny & Eastern Railroad,
Inc., Bradford Industrial Rail, Inc., Corpus Christi Terminal Railroad,
Inc., Dansville and Mount Morris Railroad Company, Genesee & Wyoming
Railroad Company, Inc., Golden Isles Terminal Railroad, Inc., Savannah Port
Terminal Railroad, Inc., Illinois & Midland Railroad, Inc., Louisiana &
Delta Railroad, Inc., Pittsburgh & Shawmut Railroad, Inc., Portland &
Western Railroad, Inc., Rochester & Southern Railroad, Inc., and Willamette
& Pacific Railroad, Inc. GWI indirectly controls three Class III rail
carriers through its ownership of noncarrier Rail Link, Inc.: Carolina
Coastal Railway, Inc., Commonwealth Railway, Inc., and Talleyrand Terminal
GWI seeks to acquire all of the stock of SB, a Class III railroad that
operates over approximately 12 miles of line, and extensive switching and
yard track, in the Buffalo area. SB is wholly owned by its primary customer,
Bethlehem Steel Corporation (Bethlehem). SB additionally serves Ford Motor
Company and Republic Technologies. In addition to BPRR, SB interchanges with
other carriers that include Norfolk Southern Railway Company, CSX
Transportation, Inc., Canadian National Railway Company, and Canadian
Pacific Railway Company.
Bethlehem has agreed to sell 100 percent of the capital stock of SB to GWI.
While ownership of SB would change, GWI anticipates that the nature and
scope of SB's operations, including the frequency of service, would remain
the same or improve. That is because SB would be able to avail itself of
capital support offered by the GWI organization. Service would continue to
be provided to and from all shippers on SB's lines. No shipper currently
served by or accessible to SB would experience a reduction or other adverse
change in its transportation options.
Pursuant to 49 CFR 1013, petitioner submitted a proposed voting trust
agreement to be entered into by GWI and William P. Quinn acting as trustee.
Placing SB's stock into a voting trust will permit petitioner to close the
transaction and avoid creating a violation of 49 U.S.C. 11323. Petitioner
acknowledges that GWI would be precluded from taking control of SB and fully
integrating the carrier into GWI's railroad family as long as the trust
remains in effect.
DISCUSSION AND CONCLUSIONS
Under 49 U.S.C. 11323(a)(5), the acquisition of control of a rail carrier by
a person that is not a rail carrier but that controls any number of rail
carriers requires prior Board approval. (1) Under 49 U.S.C. 10502(a),
however, we must exempt a transaction or service from regulation if we find
that: (1) regulation is not necessary to carry out the rail transportation
policy of 49 U.S.C. 10101; and (2) either (a) the transaction or service is
limited in scope, or (b) regulation is not needed to protect shippers from
the abuse of market power.
Detailed scrutiny of the proposed transaction is not necessary to carry out
the rail transportation policy. Rather, an exemption will promote that
policy by minimizing the need for Federal regulatory control over the
transaction [49 U.S.C. 10101(2) ] and ensuring that a sound rail
transportation system will continue to meet the needs of the shipping public
[49 U.S.C. 10101(4)]. Specifically, an exemption will permit GWI to ensure
the continuation of rail service currently provided by SB while permitting
Bethlehem to extricate itself from ownership of a railroad it no longer
wishes to retain. In addition, by enabling GWI to integrate SB into its
existing family of Class III carriers, with attendant capital, logistics,
and administrative support, an exemption will foster sound economic
conditions in transportation, ensure effective coordination among carriers,
and encourage efficient management [49 U.S.C. 10101(5) and (9)]. Other
aspects of the rail transportation policy will not be adversely affected.
Regulation of the transaction is not needed to protect shippers from an
abuse of market power, as there will be no adverse impact on rail operations
or any lessening of rail competition as a result of the proposed
transaction. Through this transaction, a small switching carrier that
operates in a limited geographic area is being added to a group of Class III
carriers that are already controlled by GWI. There will be no change in SB's
existing operations, and no shipper will lose rail service options as a
result of the transaction. The more likely result would be an enhancement of
shippers' rail service options. SB would move from being a subsidiary of a
steel manufacturer to being an integrated member of a regional railroad
family. Given our finding regarding the probable effect of the transaction
on market power, we need not determine whether the transaction is limited in
Notwithstanding these findings, to ensure SB's shippers are informed of our
action, we will require GWI to serve a copy of this decision on them within
5 days of the service date of this decision and to certify to us that it has
Under 49 U.S.C. 10502(g), we may not use our exemption authority to relieve
a rail carrier of its statutory obligation to protect the interests of its
employees. Because the transaction involves one Class II and one or more
Class III rail carriers, our grant will be made subject to the labor
protection requirements of 49 U.S.C. 11326(b).
This control transaction is exempt from environmental reporting requirements
under 49 CFR 1105.6(c)(2)(i) because it will not result in any significant
change in carrier operations. Similarly, the transaction is exempt from the
historic reporting requirements under 49 CFR 1105.8(b)(3) because it will
not substantially change the level of maintenance of railroad properties.
GWI requests expedited action on the petition for exemption because of
adverse financial circumstances in the steel industry and the economy at
large. GWI seeks to acquire, and Bethlehem seeks to divest itself of, the SB
property as soon as possible. Petitioner contends that the longer SB's
purchase remains pending, the more difficult it becomes for Bethlehem to
move forward in pursuit of economic stability, assured that it has
permanently divested itself of the responsibilities and expense of owning a
railroad it no longer has any interest in running. Petitioner further states
that expedited action is in the best interest of shippers who use and rely
on SB's service. Petitioner contends that, while Bethlehem may historically
have been SB's largest shipper, it is not the only current or prospective
customer. Petitioner further contends that the longer SB's future remains
unsettled, the greater the anxiety and uncertainty will be among those
dependent upon SB's rail service, and the higher the risk of traffic
diversions and other adverse economic impacts on the communities adjacent to
SB's lines. The request is reasonable. Accordingly, we will grant the
request by shortening the effective date of the exemption from the normal
30-day period to 15 days.
This action will not significantly affect either the quality of the human
environment or the conservation of energy resources.
It is ordered:
1. Under 49 U.S.C. 10502, we exempt from the prior approval requirements of
49 U.S.C. 11323 et seq. GWI's acquisition of control of SB, subject to the
labor protective conditions at 49 U.S.C. 11326(b).
2. GWI shall serve a copy of this decision on SB's shippers within 5 days of
the service date of this decision and certify to the Board that it has done
3. Notice will be published in the Federal Register on November 21, 2001.
4. This exemption will be effective on December 6, 2001. Petitions for stay
must be filed by November 26, 2001. Petitions for reconsideration must be
filed by December 11, 2001.
By the Board, Chairman Morgan, Vice Chairman Clyburn, and Commissioner
Vernon A. Williams
1. Petitioner notes that, were it not for the fact that SB's tracks connect
with those of an existing GWI subsidiary, BPRR, the acquisition of control
would be exempt pursuant to 49 CFR 1180.2(d)(2). Due to the nature of their
systems and the connection between them, petitioner asserts, SB and BPRR do
not compete for the same traffic.
In March, 1998, Canadian National has commenced the operation of a unit coke/slag train between Bethlehem Steel in South Buffalo, NY and River Rouge Steel in Detroit, MI. The new service carries the symbols 715/716 while operating on the CN. CN expects service to grow into 100-car unit trains. - Railpace Magazine
HISTORY: The SB began operations as a switching railroad for Bethlehem Steel in 1901.
CREDITS: John Stewart's railroad.net and the American Shortline Railway Guide, 5th ed. by Edward A. Lewis
Hits since 3/1/00
UPDATED: February 20, 2005
Copyright 2002 by Les Wilson - all rights reserved