The , known as the '''Erie-Lackawanna Railroad''' until
1968 , was formed from the
1960 merger of the
Erie Railroad and the
Delaware, Lackawanna And Western Railroad . The official motto of the line was "The Friendly Service Route".
The EL struggled for most of the 16 years it existed. The two railroads that created it were steadily losing passengers, freight traffic and money, and were heavily burdened by years of accumulated debt. These two historic lines, the Erie and the DL&W, started to consolidate facilities on the Hudson River waterfront and across southern New York State in 1956, four years before formal corporate merger. The Lackawanna route was severely affected by the decline of
Anthracite and
Cement traffic from Pennsylvania by the 1940s. The Erie was burdened by the continuing loss of high-tariff fruit and vegetable traffic from the western states into the
New York City region as highways improved in the 1950s. Both lines were also impacted by the opening of the
Saint Lawrence Seaway in 1959, which allowed ocean-going cargo ships to travel between European, African and South American ports and cities on the
Great Lakes , such as Buffalo, Cleveland, Detroit, Chicago, etc. The DL&W had previously carried much traffic to and from ocean ships, having its own port facilities on the Hudson River in
Hoboken , New Jersey.
The northeast's railroads, including the EL, were all beginning to decline because of over-regulation, subsidized highway and waterway competition, high rates of urban property taxation, and market saturation (i.e., too many railroad lines competing for what market was remaining). The closure in the 1960s of old multi-story factories in the eastern cities, followed by the decline of the domestic
Automobile and
Steel industry in the 1970s, eroded much of the EL's traditional traffic base. Also, due to
Government Regulation Policy formulated in the late 19th Century, the EL and other railroads could not immediately abandon long-distance passenger runs, despite the fact that competition from
Airline s,
Bus Lines and the private
Automobile made them unprofitable.
However, the EL did post profits in the mid and late sixties through heavy cost-cutting (reduction of parallel services), equipment modernization, suburban industrial development, increased
Piggyback trailer traffic, and steady reduction of long-distance passenger train service, which ended in early 1970. Also, additional rail traffic was temporarily diverted to the EL because of service problems on the troubled
Penn Central lines, which the EL largely paralleled. The EL built a state of the art diesel engine repair facility in
Marion, Ohio , and upgraded a large car repair shop in
Meadville, Pennsylvania . As to its money-losing suburban passenger train services in the
New York City metropolitan region, the EL had come to terms with the State of New Jersey during the late 1960s for adequate subsidy and for the purchase of new engines and coaches. The EL also gained a lucrative contract with
United Parcel Service in 1970, which led to the operation of five dedicated
Intermodal trains daily between New Jersey and Chicago.
The EL was purchased by the
Norfolk And Western Railway through its
Holding Company Dereco in
1968 , as a condition of the proposed but never consummated merger between the N&W and
Chesapeake And Ohio Railway .
In
1972 ,
Hurricane Agnes destroyed many miles of track and related assets, especially in southwestern New York State. The costs of repairs and the effect of lost revenues forced the company into
Bankruptcy , filing for
Chapter 77 on
June 26 . The completion of the
Interstate 80 highway across Pennsylvania and New Jersey by
1971 added to the Erie Lackawanna's financial problems, as it diverted piggyback traffic previously garnered from
Less Than Truckload shipping companies such as Navajo and Cooper-Jarrett.
After its 1972 bankruptcy, EL management attempted to plot an independent course, anticipating financial reorganization without a heavy debt burden. Therefore, it initially declined interest in joining the Consolidated Rail (
Conrail ) takeover of the other major bankrupt eastern lines. The preliminary (PSP) and final (FSP) system plans for Conrail showed the EL being merged into the
Chessie System . However, the operating unions could not reach a compromise. Also, by 1975 the economy in the eastern United States was gravely affected by the
1973 Oil Crisis , quashing any hopes of the EL being able to independently compete with government-rehabilitated Conrail lines. Therefore, the EL petitioned and was accepted into Conrail at the last minute.
In
1976 much of the company's railroad assets were thus purchased by the federal government and combined with other companies' railroad assets to form
Conrail . An independent Erie Lackawanna Estate continued in existence for several years thereafter. This Estate liquidated the EL's marginal non-railroad assets and distributed the railroad purchase funds as to satisfy much of the large
Debt burden that the EL and its predecessors had accumulated. The EL's
Creditor s gained more by selling the line's assets than by continuing its traditional business operations. Thus, the EL was an example of a business enterprise that became worth more dead than alive.
In the east, much of the EL remains, as commuter railroad routes in
New Jersey (see
NJ Transit ), and as freight lines in
New York (north of the last still-active passenger station at
Port Jervis ),
Pennsylvania , and
Ohio . West of
Youngstown, Ohio , however, the route is gone, having been abandoned and removed before 1980 in favor of parallel former
Penn Central lines.
The
Interstate Commerce Commission approved the merger on
September 13 ,
1960 , and on
October 17 the
Erie Railroad and
Delaware, Lackawanna And Western Railroad merged to form the . The '''Erie Lackawanna Railway''' was formed
March 1 ,
1968 as a subsidiary of
Dereco , the
Holding Company of the
Norfolk And Western Railway , and on
April 1 the assets were transferred. It was merged into the
Consolidated Rail Corporation on
April 1 ,
1976 .
- Grant, H. Roger. ''Erie Lackawanna: Death of an American Railroad.'' Stanford, CA: Stanford Univ. Press, 1994
- PRR Chronology
