Few shortline spinoffs had such a promising start and slow, agonizing
demise as the Indiana Hi-Rail Corporation (reporting marks, IHRC). The IHRC began in the early
1980s acquiring a short, ex-New York Central branch in eastern Indiana.
The railroad quickly became a railfan favorite for its large roster of
Alco road-switchers, an oddity even for the 1980s. From that point the
road grew rapidly until within a few years it owned or operated more
than 400 miles of track spread out across four states; Illinois, Indiana, Kentucky, and Ohio. While a large system the IHRC relied heavily on agriculture and its lines were spread thin with customers. Additionally, the railroad predominantly inherited poorly maintained routes that had not seen significant track work for
decades. All of these factors resulted in a house-of-cards, so to
speak, and the company quickly crumbled away in the early 1990s. After
mounting debt became too much to bear the IHRC entered bankruptcy and disappeared in the mid-1990s. Today, some of its lines are still in use although many were simply ripped up.
To understand the Indiana Hi-Rail Corporation, how operated, and the
factors which ultimately led to its collapse its many districts, from
Decatur, Illinois to Tiffin, Ohio must be examined. In 1981 the IHRC
began as a small, rather insignificant shortline system when it took
over a former NYC branch line from Conrail which ran from a connection
at Connersville, Indiana northward to Beesons. This six-mile line
served a Ford plant and grew by an additional 20 miles in 1989 when
Hi-Rail added an ex-Nickel Plate
Road branch to New Castle, purchased from Norfolk Southern (this was
certainly its best-maintained line as NS had recently upgraded it with
heavier rail, new ties, and ballast for 25 mph operations). A major
factor which allowed the IHRC to grow so rapidly in the 1980s was a
Federal Railroad Administration (FRA) program which required an owner to
first sell a line before abandoning it.
Not every line Hi-Rail operated in the 1980s was owned by the railroad, as some were contracted to it by local shippers that had purchased a section of trackage to retain rail service and spare it from being scrapped. Interestingly, the railroad's affection for Alco road-switchers came from president Powell Felix who saw them as rugged locomotives that were relatively easy to maintain, rugged, and could pull about anything required. The IHRC's locomotive fleet did not consist entirely of Alcos, though, as it also owned EMD GP7s, GP20s, GP35s, and a handful of SW1200s to perform switching operations. Perhaps an unknown fact about the company was that its business did not consist only of moving trains but also rebuilding locomotives for lease and sale as well as leasing boxcars through a subsidiary the Indiana Boxcar Corporation. Still, freight by rail paid the bills and below is a look at most of its individual districts.
Tiffin-Woodville Line: This 25-mile line in Ohio was part of the former Pennsylvania Railroad's line to Detroit, purchased by a group of shippers from Conrail in 1990 its traffic included lime, particle board, and feldspar via three customers.
Maumee District: A 50-mile former Wabash route running from Liberty Center, Ohio southwestward to Woodburn, Indiana, acquired from Norfolk Southern in 1989 through its Thoroughbred Short Line program (five of its acquisitions came via this program). The line primarily hauled food products although service was intermittent on an as-needed basis and conditions were so bad west of Defiance that the track was embargoed.
St. Mary's District: Located south of the Maumee District
this 78-mile corridor ran from Douglas, Ohio to Van Buren, Indiana as
well as from Lima to Glenmore, Ohio. The former line was ex-Nickel Plate while the latter was once part of the Erie's Chicago main line and owned by local shippers. The Nickel Plate
line was picked up from the NS short line program in 1989 and hauled
mostly grain although, again, poor track conditions embargoed the
Douglas-Delphos section (7-miles) as well as the trackage between Van
Buren-Warren (6-miles). The ex-Erie route was contracted out to the
Hi-Rail in 1991.
Rochester District: This ex-NKP line was another
acquisition through the NS program, via lease, and ran from Argos,
Indiana southward to Peru. Once more, only about half of it was ever in
operation with the route north of Rochester seeing little to no rail
Connersville-New Castle Line: Already mentioned above it
consisted of two separate purchases pieced together from Conrail in 1981
and NS in 1989. Because Connersville was where the Indiana Hi-Rail
Corporation got its start the town was always the railroad's primary
Huntingburg Cluster: Situated in southwestern Indiana
these handful of branch lines were more acquisitions through NS running
from Dubois south to Rockport Junction as well as splitting from Lincoln
City and heading southeasterly to Cannelton. By the early 1990s
traffic on this section was rapidly falling although at the time
consisted of ash, lumber, animal feed, and particle board.
West Henderson-Newton: Despite poor track conditions this was
easily Hi-Rail's most profitable corridor moving significant tonnage of
grain, flour, coal, and coke from West Henderson, Kentucky northward to
Newton, Illinois along with a branch from Owensville to Poseyville,
Indiana that was operated by Hi-Rail under contract
(the route also had the company's largest yard at Harwood). This
district was not entirely owned by the IHRC, though; north of Harwood
the lines were former Illinois Central Gulf (the Owensville branch was
ex-Chicago & Eastern Illinois) while the railroad used trackage
rights via CSX southward to reach Henderson. Unfortunately, a 1990
flood of the Wabash River near Grayville, Illinois washed out its major
bridge over the waterway forcing the railroad to detour over CSX for
nearly two years.
Sangamon District: Named for the river it runs near
this section of ex-Illinois Central branches between Cisco, Decatur, and
Assumption, Illinois was purchased by local shippers and grain
elevators between 1981 and 1986, and contracted out to IHRC. The owners
lost interest in how the railroad was running things and switched
operators in 1992.
There were also three other lines the Indiana Hi-Rail Corporation
either sold or was contracted to operate but lost after owners became
dissatisfied with its service: a former NKP branch from Neoga to Metcalf
purchased by a group of shippers in 1987 from NS saw IHRC services
until 1991 when Eastern Illinois Railroad took over; a group of former
Penn Central branches in eastern Ohio acquired from Conrail in 1982 were
sold; and finally the company leased the ex-Monon main line between
Indianapolis and Sheridan from Seaboard System from 1985 to 1987 until the Class
I wanted too much for the property and the IHRC backed out of the deal
to continue operations (prompting the trackage to be abandoned).
Despite its peak size of 461 miles, thirteen different districts it operated at one time or another, and achieving regional, Class
II status the Hi-Rail had underlying problems; its relatively poor
track was resulting in increasing shipper dissatisfaction which was
caused not only in slow transit times but also numerous derailments on
the frail infrastructure (this was the primary cause of some shippers
ending their contracts with the IHRC). By 1993 debt was mounting with
almost daily derailments and unpaid bills for trackage rights over CSX
and NS. Then, things worsened in 1994 when the railroad attempted to
restructure by creating a subsidiary, the Sagamore National Corporation
that would purchase most of the Hi-Rail trackage (398 miles) and spread its debt
load. The new company created two subsidiaries, the Wabash & Ohio
and the Wabash & Erie to operate the various districts.
Indiana Hi-Rail Corporation Locomotive Roster
Ex-Santa Fe, Built 1951.
Ex-LIRR, Built 1953.
342, 343, 345
Ex-Santa Fe, Built 1949-1951.
216, 221, 223, 234
Ex-B&O, Ex-TRRA, Built 1955-1957.
Ex-GN, Built 1960.
310-312, 315, 323, 332, 334, 365
Ex-LV, Ex-Monon, Ex-L&N, Ex-SAL, Built 1964-1967.
Ex-SAL, Built 1960.
Ex-SP&S, Built 1965-166.
Ex-DT&I, Ex-GN, Ex-CB&Q, Built 1964-1965.
Ex-Santa Fe, Built 1958.
(A big thanks to "A Fitting Epitaph" by author Scott Muskopf from the June, 2011 issue of Trains as well as "It's Highball For Indiana Hi-Rail" by author Paul Schneider from May, 1993 issue as primary references for this article.)
Unfortunately, the ICC found a conflict of interest as Sagamore
and Hi-Rail used the same address and managers, breaking up the
operation and returning the new shortlines back to the Indiana Hi-Rail
Corporation. While the company was very customer friendly and always
willing to go out of its way to please shippers without millions in
needed track upgrades it was fighting a losing battle. On November 15,
1994 Hi-Rail filed for bankruptcy and unfortunately, the trustee
overseeing the case was not kind to its properties selling off assets
and abandoning/liquidating others to repay creditors. By then about 283
miles remained of the original IHRC system. The Indiana Hi-Rail
Corporation disappeared forever on December 22, 1997 and by then about
half of the mileage left had been ripped up (virtually all of it is gone
in southern Indiana and Illinois) with the rest picked up by various