The way rail service used to be vs. present day

Looking at old maps and pictures, it looks as though every darn business used rail service years ago. Even small businesses and stores had spurs. I mean everything even the smallest shipper used rail. The thing is I don't see how this was profitable for the RRs. Customers getting a few boxcars a month don't seem to be worth it. Nowadays with 55% of the rails pulled it seems as though the RRs just want customers who ship cross country via TOFC or who happen to be located along their mainlines that ship 100s of cars per month. It makes more sense to me to ship TOFC from one major city to another and then truck the small shipments from there.

Any thoughts...

[Since this question was not specific to New Jersey, I moved it to General Discussion: Railroad Operations and Facilities- ov]

Remember, there was a time when there was no other way to ship. There were no trucks until well into the 20th century and even then there were no interstate highways until mid-century. Everything that was shipped was either sent by rail, boat (canal or river) and in some rare cases, horse and wagon. Any company that shipped or received even a modest amount of goods could justify a siding.
It was a different time with different economic conditions. Railroads had a monopoly on shipping and could demand any price the wanted for shipping goods and made huge profits doing it. Many of the outdated laws that strangled railroads in the late 20th century were enacted during these earlier years in an effort to reign them in.

A good read: THE OCTOPUS by Frank Norris.

One way of viewing it is how today's large less-than-truckload companies view and experience their operating economics. These are Yellow/Roadway, Old Dominion and others. Once they build the network of terminals, maintenance, overhead, etc., and have a sufficient volume of revenue to breakeven. They seek large customers (GE, for example) who fill the base, then additional business is seen as contributing to profit. This other business is also charged much higher rates. On an individual costing basis a unit of traffic might not produce a full profit, but each and every bit is contributing something to the overhead and profit.

This was also in the regulated day when railroads priced their overall services to cover their operating costs plus a percentage applied to their total fixed asset investments. Profitable roads liked unprofitable ones, because they caused the overall rate structure for all of them to be made even higher. Thus, there was not much of an incentive to kill a weak competitor.

There was no sophisticated accounting at the time. The attitude was that every bit of freight contributed to the cash register, and in the end the good and bad business evened out. Costing methods only came in first with passenger train analysis in the early 50s then in freight with the Southern Railways' five hopper car rates. This took an enormous amount of legal fighting with the ICC.

Of the many trends that happened in railroading mid-20th century, one that kind of stuns me is the absolute decline of LCL (less-than-carload) from the end of WWII to 1970 (when it was pretty much gone). Now, I realize that a lot of this was due to the closing of 'small-town' (and not so small town) passenger stations during the 1960s train-offs (some stations were retained for freight service only, but not for that long) as these stations served as feeders and distributors of LCL, but in the large and medium sized urban areas (across the country, not just the North East) railroads had huge LCL freight handling facilities, sometimes with dedicated fast trains between metropoli (famous example: NYC Pacemaker), and in the post-WWII era these facilities were readily adapted the logisitical mechanization improvements gained from that war (e.g. forklift, cart-tractors, mobile powered cranes & winches, pallets, etc - stuff that did exist in the pre-WWII era, but really came into use during it). You can find numbers of company publicity pictures of the workforce at the urban terminals posed in rows with their new freight handling equipment.
Then, 25 years later at the most - bupkis (this happened in the UK by the mid-1970s too, and probably everywhere else) - the dedicate trains long gone, the freight handling equipment moved elsewhere, and the freight stations (eventually) torn down or redeveloped for other uses. Sporadical attempts to revive LCL eventually go nowhere (eg, Amtrak ), and while you could make a case that LCL now goes via piggyback service (or containers), well, not quite the same, is it.

One more thing - remember that some classes of freight have simply vanished, as few (maybe none) towns nowadays have coal dealers, or ice-houses, or stockyards (well, there are stockyards of course, but basically the animals are butchered as close to their feedlots as possible, and the meat, which doesn't need to be feed or watered or exercised as it travels - just refrigerated, is then shipped).

You can add another type of customer to Sir Ray's list of "vanished" freight - the small lumber yard. 40 years ago there were dozens of small lumber yards scattered around any decent sized city, and even the small towns had at least one. Now the big box stores like Lowes and Home Depot rule, and a few co-ops like Genesee Reserve take delivery at one central location and truck to the remaining small dealers.

One example from Rochester - Just north of Ridge Road on the NYC was Flower City Lumber. Half a mile north was Nichols Wyman Lumber at Barnards, also on the NYC. At Stone Road on the B&O was Matthews & Fields, and Greece Lumber at Latta Road also a B&O customer. So there's 4 customers just within a few miles, in one small corner of the city.

I can remember as a kid watching lumber being unloaded from 40 foot boxcars - one board at a time. Several guys, a couple in the car and more on the ground, unloading piece by piece and then carrying them to the shed and stacking the wood. Pretty labor-intensive when compared to a bulkhead flat with bundled lumber today.

During the years when the railroads dominated the freight market, many of them also operated large warehouses in their hub cities. Baltimore's Camden Yards stadium evolved in part from a B&O freight warehuse. and the Crooks Terminal Warehouses found in a couple of deteriorating districts in the Midwest were a Burlington subsidiary.

Under the system in general use at that time, a manufacturer of, say, furniture or appliances would ship a mixed carload of merchandise to the warehouse in the destination city, where the shipment was unloaded and individual items forwarded to retailers.

Many railroads also maintained LCL "breakbulks", places where LCL shipments were sorted and classified just as carloads were reassigned in a freight yard. Cities which generated a fair amount of LCL rated a "trap" or "ferry" car which maintained a regular schedule to and from the breakbulk point. One of PRR's biggest was just off Liberty Avenue on the northern fringe of downtown Pittsburgh. It was apparently redesigned sometime in the 1950's, but when I first encountered it some twenty years later, it had devolved into a white elephant.