In 1921, the United States has ab out 421 short-haul railroads, glistening lengths of track that served shippers not located on the major lines. By 1971 the number had dropped to around 215. Then a series of federal laws made it easier for enterprising railroaders to acquire routes, and 51 new short lines have since steamed onto the scene.

"There's been substantial growth," notes Thomas C. Dorsey, vice-president and general counsel of The American Short Line Railroad Association.

Among the liveliest of the recent arrivals is Pocono Northeast Railway Inc., based in Wilkes-Barre, Pa. With over 100 miles of track in Lackawanna and Luzerne counties, PNE moved into profitability after only 15 months of operation. "We expect 1984 to be a super year financially," says founder and president G. David Crane, formerly a program manager with the U.S. Department of Energy.

Three years ago, Crane, who was eager to leave government to start his own business, heard that Consolidated Rail Corp. (Conrail) was about to begin selling off unprofitable stretches of its Pennsylvania track, a move facilitated by recent legislation. Although he knew nothing about railroads, Crane went knocking on Conrail's door and, after extensive studies, decided that short-haul represented a real opportunity. His training (an MBA from Temple University) and his experience with the federal bureaucracy stood him in good stead during the following year-and-a-half of research and negotiation. Crane incorporated his company as Pocono Northeast, and he raised some $4 million in capital and bid against two other interested parties. He closed the deal in September 1982.

"We purchased real estate, rail, bridges, ties, and signals -- everything," he explains.

Pocono Northeast then went shopping for rolling stock and railroad expertise; it now owns three locomotives and 20 cars, and has 18 employees who share a total of 140 years of whistle history. The company inherited some of Conrail's old customers, but it has since doubled its client list and is now carrying a healthy mix of goods (coal, steel, produce, scrap, lumber, liquor). "We're doing a lot of promotion and hand-holding," points out Crane.

"It's a very competitive, very hard business," he continues, "much more difficult than I'd anticipated. But if you're well financed, have good people, and get a little luck, you can do very well." PNE will have revenues of "under $5 million" this year, and Crane, who is 40, is now negotiating for additional Conrail and other railroad lines that may soon come up for grabs.

Although PNE is regulated by the Interstate Commerce Commission, Crane sees no government obstacles lying in his right-of-way. "It's all mine now," he laughs.

Published on: May 1, 1984