Metropolitan Transportation Authority

Long Island Rail Road: Freight Department Operations

In addition to commuter rail service, the LIRR also provides freight service. These freight operations have consistently incurred an operating deficit. We examined the LIRR's efforts to make the freight operations financially self-sustaining.

We found that freight operating costs were understated on the LIRR's 1992 income statement by $781,000, mainly because some of the costs incurred in providing freight operations were not allocated to the operations. We also found that special rail cars for transporting loaded tractor trailers had been idle since 1991, because customers for this service had not been found. The rail cars, along with related equipment, were purchased at a cost of $924,000. We concluded that, while progress had been made in reducing the deficits incurred by the freight operations, the progress was much less than had been expected by the LIRR. We recommended that LIRR officials closely monitor freight operations and consider discontinuing the operations if they did not soon become self-sustaining. 93-S-90