Brief History of Consolidated Rail Corporation
Railroads were the country’s primary source of freight transportation prior to 1930. Between 1930 and 1960, railroads were detrimentally affected by the growth of air and truck transportation. In the east, railroads were financially harmed by the collapse of coal traffic in the 1960s as the country shifted to oil. As a result, between 1967 and 1972, six major northeastern railroads went bankrupt. To address the imminent collapse of freight and passenger traffic in the east as a result of the railroad bankruptcies, Congress passed the Regional Rail Reorganization Act of 1974 (the “3R Act”). The 3R Act provided interim funding to the bankrupt railroads and created Consolidated Rail Corporation (Conrail) as a government-funded private company. Under the Act, the United States Railway Association (USRA) prepared a Final System Plan, identifying the rail lines from the bankrupt railroads that would be transferred to Conrail. The Final System Plan was approved by Congress as the Railroad Revitalization and Regulatory Reform Act of 1976 (the “4R Act”) and signed into law on February 5, 1976.
Conrail was incorporated in Pennsylvania on February 10, 1976, and began operations on April 1, 1976. The Company’s mandate was to revitalize rail service in the Northeast and Midwest and to operate as a for-profit company. Conrail’s economic recovery and turnaround began in 1980 when the Staggers Rail Act was signed into law. The Staggers Act largely deregulated railroads, the rates for which had been fixed since the turn of the century when railroads represented virtually the only mode of transcontinental transportation. The Staggers Act made railroads more competitive with trucks by allowing them to price services, adjust rail rates, react to market conditions, and provide special contracts. Conrail’s first year of profitability came in 1981. By 1983 Conrail was the fourth largest freight hauler in the United States. In 1985, Conrail management proposed a plan for the public offering of Conrail stock. By the fall of 1986, the Conrail Privatization Act was signed, authorizing a public stock offering to return Conrail to the private sector. In 1987 Conrail was returned to the private sector in what was then the largest initial public offering in U.S. history, raising $1.9 billion.
In the spring of 1997, Norfolk Southern Corporation (NS) and CSX Corporation (CSX) agreed to acquire Conrail through a joint stock purchase. CSX and NS split most of the Company’s assets between them. The Surface Transportation Board (STB) officially approved the acquisition and restructuring of Conrail on July 23, 1998. NS and CSX took administrative control of Conrail on August 22, 1998. The approved merger plan restructured Conrail into a Switching and Terminal Railroad operating about 1,200 miles of track in three regional areas. On June 1, 1999, Conrail began operating as a Switching and Terminal Railroad for its owners, NS and CSX, in the three geographical areas of Northern New Jersey, Southern New Jersey/Philadelphia, and Detroit, Michigan. In 2007, it expanded its operations from Northern New Jersey to Staten Island, New York.
FAQs
During its first seven years, Conrail proved to be highly unprofitable, despite receiving billions of dollars of assistance from Congress. The corporation declared enormous losses on its federal income tax returns from 1976 through 1982, resulting in an accumulated net operating loss of $2.2 billion during that period.
What did Conrail stand for? ›
The 3R Act provided interim funding to the bankrupt railroads and created Consolidated Rail Corporation (Conrail) as a government-funded private company.
How many miles of track did Conrail have? ›
Today, Conrail operates nearly 1,200 miles of track on behalf of CSX and NS in the three shared districts. It operates as a switching and terminal railroad, but do not handle any customer commercial matters.
Who is the CEO of Conrail? ›
Brian Gorton - Consolidated Rail Corporation | LinkedIn.
When did Conrail stop using Cabooses? ›
However, in the mid-1980s, Conrail began retiring cabooses. “There were more computers, less paperwork and fewer stops,” Garbely said. “There was no reason to do work. Some are still in use, but most had been retired by 1986.
Is Conrail still operating? ›
Although Conrail no longer handles commercial matters for customers, we continue to play a critical role in serving shippers and receivers as an agent for our owners.
Did CSX buy Conrail? ›
CSX Corp. will buy Conrail Inc. in an $8.4 billion deal creating the East Coast's largest railroad and one of the world's largest freight companies.
How much money did Conrail make? ›
Conrail's revenue is $49.9 million.
Conrail peak revenue was $49.9M in 2023. Conrail has 7,404 employees, and the revenue per employee ratio is $6,734.
When did Conrail buy Penn Central? ›
Then, on April 1, 1976, Penn Central transferred those rail operations to the government-owned Consolidated Rail Corporation (Conrail). Facing the continued loss of market share to the trucking industry, the railroad industry and its unions asked the federal government for deregulation.
Who designed the Conrail logo? ›
The designer of the famous Conrail “can opener” logo, Tony Palladino, has died at age 84, the New York Times reports.
CONRAIL (the Consolidated Rail Corp.), a privately owned company primarily in the freight business, was established by Congress in 1975 to reorganize and consolidate 5 of 7 bankrupt northeastern railroads.
What's left of the Lehigh Valley railroad? ›
Most of the Lehigh Valley mainline in upstate New York was removed by the late 1970's. Today, only segments between Sayre, Pa., and Van Etten, Kendaia (former Seneca Army Depot) and Geneva, and Manchester and Victor remain in service.
What is the legal name of Conrail? ›
Consolidated Rail Corporation and its subsidiaries (“Conrail”) convey their corporate image through trademarks, service marks and slogans, which promote recognition and communicate a sense of relationship among the companies within the Conrail corporate umbrella.
Where does Conrail go? ›
Track: Approx. 372 miles. Our focus: Atlantic, Bucks, Burlington, Camden, Cape May, Cumberland, Delaware, Gloucester, Mercer, and Philadelphia counties. Our hub: Pavonia Yard in Camden, New Jersey.
When did Conrail quality start? ›
the Quality scheme first appeared in 1991. Conrail 6100 was the first of the 1991 fifty-unit order. Beginning with 6100, all Conrail C40-8W's came painted in the Quality scheme.
Why did the railroad industry collapse? ›
Misguided railroad regulation was a major factor behind the rail industry's decline. For example, the ICC set maximum and minimum rates for rail shipments, with rates often unrelated to costs or demand.
Why did railroad companies fail? ›
Without cash to finance operations and refinance debts that came due, many railroad firms failed. Others defaulted on payments due to banks. This turmoil forced Jay Cooke and Co., a notable merchant bank, into bankruptcy on September 18. The bank was heavily invested in railroads, particularly Northern Pacific Railway.
Why did the Pennsylvania Railroad fail? ›
In 1968, the Pennsylvania Railroad merged with New York Central and the railroad eventually went by the name of Penn Central Transportation Company, or "Penn Central" for short. The former competitors' networks integrated poorly with each other, and the railroad filed for bankruptcy within two years.
Why did passenger rail decline? ›
The Rail Passenger Service Act of 1970 created the National Passenger Railroad Corporation (Amtrak as we know it today). The advent of the automobile, creation of the Interstate Highway System, and a boom in air travel all diverted passengers away from rail.
