The of the Albany-Lebanon mainline were built by the newly founded Albany and Lebanon Railroad in 1880. The A&L was shortly thereafter bought by the
Oregon and California Railroad, which ran from Portland to the Oregon-California border. In turn, the O&C was bought by
Southern Pacific in 1887. The Albany-Lebanon line became one of several branches off the main route from San Francisco to Portland, which went through Albany. New branches were also constructed as the Willamette Valley industrialized, including a route northeast from Lebanon to the booming lumber town of Mill City built in 1910. SP leased both branch lines to the
Willamette Valley Railway in 1993, and sold them outright to WVR in 1996 shortly before its acquisition by Union Pacific. The Lebanon-Sweet Home branch was built by the
Spokane, Portland, and Seattle Railway in 1930 as a spur of their passenger
Oregon Electric Railway, and eventually acquired by BNSF. The railroad spun it off into the Albany and Eastern in May 1998. Five years later, in 2003, AERC bought the Albany-Lebanon and Lebanon-Mill City lines from WVR, completing the current network. In 2007 a revamping of its aging infrastructure began, with new rails, ties, and rebuilt crossings. By 2011 all three lines had been refurbished. Starting in 2014, the railroad has offered excursion and charter trains, the
Santiam Excursion Trains, particularly with
Santa Maria Valley Railroad 205 and
Southern Pacific 5399.
Polson Logging Co. 2 may join after its lease to the
Oregon Rail Heritage Center. ==Fleet==