Economics of buying locomtives?

[OSRR]

I'm working on a freelance (might end up in paper railroads?) modern era DT&I that stretches from Detroit, MI to Louisville, KY (The branch from Chillicothe to Ironton was cut back in the 80s). In my world, the Toledo sub never existed and the stretch of NS's Dayton district from Springfield to Columbus never happened either. This gives my railroad a straight shot down the the western side of Ohio and into Kentucky. Now, obviously, there's a lot of fudging being made but, hey, thats the fun of freelance. Having a route into as well as bypassing Toledo, this gives me a good route for bridge traffic but, also the iron ore traffic from Toledo and steel traffic in Middletown. There's also lots of grain, PP&G traffic, ethonal, stone, chemicals, autos, and more.

What I'm bouncing around on is creating a some what believable roster. So far the rosters of real railroads that have caught my eye are Paducah & Louisville, IAIS, and FEC. Although, I like the idea of an all EMD roster, I have a certain affinity to the new Evolution series. Which makes me lean towards copying the IAIS roster.

This kinda leads me towards my question. Whats the economics of buying such new locomotives? How do the real regional railroads determine they need such new, high horse power... power (or how many locomotives in general)? Do the fuel savings really add up over time coupled in with the warranties and such? For instance, the Wheeling and Lake Erie is a decent sized regional with a pretty good sized roster, but nearly the entire roster is SD40-2 variants and GP35 rebuilds but, not a single "newer" locomotive in sight.

[SousaKerry]

There are more factors then just fuel savings to consider. Do you have a good locomotive shop that can rebuild in house or so you have to contract your work out. How's your credit and bank account for that matter. Do you run drag freights or high speed time sensitive loads? Also depends on the ownership as well are they willing to re-invest in new power for long term gains or are they in it for the short term gains of running everything into the ground and then bailing out when things go south.

The company I work for purchased a competitor a few years ago, our managements philosophy has been to go for the long term and keep older equipment running and maintained as good as possible while still investing in new technology. The company we bought was run by investment bankers, they ran everything into the ground borrowed heavily and bleed them dry and when things started to go bad they made a quick sale and rode their golden parachutes to safety. It took us years to turn it around and we are growing the business again.

[EWRice]

Look at the two locos you mentioned, and the number built new, as well as the number still in service. You can obtain sd40s, gp35s and gp38s relatively inexpensive. They are all heavily supported both by emd and aftermarket for both stock and multiple styles of upgraded parts. They are solid platforms for rebuild and upgrade. They are proven designs (maybe not the 35 in original form, but when modified seem to last.) With these three types of units you would have a pretty standardized parts need. Anybody familiar with EMDs could work on them, both in house and sub contracted. Most crews seem to like operating them and most bean counters can deal with buying and supporting them.

Plus, how many SD and GP units could you purchase for the price of one modern high hp unit? It all comes down to what you are trying to accomplish and how much you want to invest.

[OSRR]

There are more factors then just fuel savings to consider. Do you have a good locomotive shop that can rebuild in house or so you have to contract your work out. How's your credit and bank account for that matter. Do you run drag freights or high speed time sensitive loads? Also depends on the ownership as well are they willing to re-invest in new power for long term gains or are they in it for the short term gains of running everything into the ground and then bailing out when things go south.

The company I work for purchased a competitor a few years ago, our managements philosophy has been to go for the long term and keep older equipment running and maintained as good as possible while still investing in new technology. The company we bought was run by investment bankers, they ran everything into the ground borrowed heavily and bleed them dry and when things started to go bad they made a quick sale and rode their golden parachutes to safety. It took us years to turn it around and we are growing the business again.

Long term certainly but, I like to think they look at it from a more reserved point of view financially. I guess that puts my railroad in a place of having bought "newer" locomotives back when the SD60s were new and keeping them in good shape. As well as rebuilding (or simply refurbishing) older locomotives.

Do you run drag freights or high speed time sensitive loads?

My line has yards based in, Flatrock, Toledo, Lima, Cincinnati, Louisville, and Chillicothe. Locals, based out of all terminals. Road freights from Louisville to Flatrock/Toledo. Ore trains from Toledo to Middletown and one unit steel train to Wayne, MI (rest is scattered on the freights). Also, seasonal unit grain trains and occasional run through coal/coke trains but, those can use foreign power. I'm thinking of a run through train from NS just like the GTW had (380/381) but, haven't quite decided on that yet.

Also have considering setting this around 2006 or 07 before General Motors took a crap. This gives me plenty of Auto related traffic.

Far as grades, the line is mostly flat land till it hits southern Ohio and into Kentucky. Unlike the real DT&I, I like the idea of going with dynamic brakes early on.

Look at the two locos you mentioned, and the number built new, as well as the number still in service. You can obtain sd40s, gp35s and gp38s relatively inexpensive. They are all heavily supported both by emd and aftermarket for both stock and multiple styles of upgraded parts. They are solid platforms for rebuild and upgrade. They are proven designs (maybe not the 35 in original form, but when modified seem to last.) With these three types of units you would have a pretty standardized parts need. Anybody familiar with EMDs could work on them, both in house and sub contracted. Most crews seem to like operating them and most bean counters can deal with buying and supporting them.

Plus, how many SD and GP units could you purchase for the price of one modern high hp unit? It all comes down to what you are trying to accomplish and how much you want to invest.

I guess I didn't think of it that way. Kind of explains why (also referring to SousaKerrys post) some railroads like CN and MRL are still running rebuilt GP9s and GP35s.

Referring back to my OP about Paducah & Louisvilles roster. I thought about going the way of GP38s, GP39s, SD40-2s, and saying a few SD60s were bought specifically for ore service.