DETROIT NEWS: Second Canada-US rail tunnel plan touts trade

[Saturnalia]

Chances are, if a CP-CSX deal goes down for Michigan Routes, we will not hear anything until the press release. No rumors. One day we'll find a STB filing and a Press Reease on Railway Age or whatever.

[Michael]

No mention of why they couldn't lower the floor of one of the existing tunnels? I suppose if that was possible it would have already been done, but I haven't heard an explanation of why not.

I wondered the same thing but last time this topic came up someone mentioned that the tunnels are sunken tubes and so there is a finite amount of space to work with and apparently they have already reached the point where they can safely heighten the tunnel any more.

[AARR]

No mention of why they couldn't lower the floor of one of the existing tunnels? I suppose if that was possible it would have already been done, but I haven't heard an explanation of why not.

I wondered the same thing but last time this topic came up someone mentioned that the tunnels are sunken tubes and so there is a finite amount of space to work with and apparently they have already reached the point where they can safely heighten the tunnel any more.

Correct, sunken tubes, cannot lower the floor.

[CSX_CO]

Chances are, if a CP-CSX deal goes down for Michigan Routes, we will not hear anything until the press release. No rumors. One day we'll find a STB filing and a Press Reease on Railway Age or whatever.

Except in something like that, they'll have to allow for airing of shippers concerns, labor concerns, other railroad concerns, etc. It won't just be a STB release and that's the end of it.

Plus, you can't keep a secret like that quiet, too big of a bombshell.

Why am I even replying? CP has no interest in their own route, especially with EHH at the helm.

Practice Safe CSX

[David Lang]

CP has no interest in their own route, especially with EHH at the helm.

My question here is why? Here is a possible answer that I have and you guys tell me what you think. Since CP allows NS to run on the D&H and since NS allows the CP to run on the Wabash, they would rather have agreements like this as opposed to buying another line (like CSX) because that would require a large capital investment whereas the 2 agreements above is a wash and not really costing them money. Another words, CP collects from NS for use of the D&H, then turns around that gives that money back to NS for use of the Wabash, which doesn't hurt nearly as much as buying a new line.

But I can really see the benefits of buying a line like CSX - your own route, not being held up by another railroads trains, a TRUE route to Chicago from Canada that is OWNED by you, potentially lower shipping costs for you customers due to the use of one railroad and not two, etc. Don't these agruments make SOME sense as well? Thanks.

David Lang

[Saturnalia]

Chances are, if a CP-CSX deal goes down for Michigan Routes, we will not hear anything until the press release. No rumors. One day we'll find a STB filing and a Press Reease on Railway Age or whatever.

Except in something like that, they'll have to allow for airing of shippers concerns, labor concerns, other railroad concerns, etc. It won't just be a STB release and that's the end of it.

Plus, you can't keep a secret like that quiet, too big of a bombshell.

Did I say a STB filing would be the end of it? And notice the "chances are"...

[MagnumForce]

My question here is why? Here is a possible answer that I have and you guys tell me what you think.

But I can really see the benefits of buying a line like CSX - your own route, not being held up by another railroads trains, a TRUE route to Chicago from Canada that is OWNED by you, potentially lower shipping costs for you customers due to the use of one railroad and not two, etc. Don't these agruments make SOME sense as well? Thanks.

David Lang

But adding all the overhead associated with that line would add more costs than paying to use someone elses line would.
NS treats the CP trains just as they would NS trains, I am not familiar with any situations where the CP trains have been hit at the expense of NS ones. CP runs their own crews on these trains so crew issues should not be a problem. The line is also shorter and considerably quicker than a route through GR. Another tidbit is the work being done between Elkhart and Goshen to help alleviate a bottleneck and add even more capacity to the line, the connection at Butler is also used ONLY by CP trains. Customers ARE using only one railroad as well as these are CP trains, not NS trains that are handed off to them by CP in Detroit. Just because you want your own line does nothing when it ends up costing twice as much. On top of all this even if you got the PM what would you do when you hit Porter? Get dumped back onto the biggest bottleneck of them all and right back on NS again.

Look, the only people even talking about this pipe dream are railfans in Michigan who long to see trains back on the PM. I am not going to say that it won't happen but I think the chances of it happening are somewhere between winning the lotto and picking a perfect NCAA Backetball Championship bracket.

[MDH]

NS treats the CP trains just as they would NS trains, I am not familiar with any situations where the CP trains have been hit at the expense of NS ones.

Hah, well, maybe they treat them like low priority NS trains, but they get stabbed all the time for "hotter" NS traffic and I know a CP engineer who runs that line who would readily back up my comment. Heck, even the last time I was in Indiana CP 143 got stabbed behind a NS junk manifest that was being held waaay out from Elkhart to go into the yard rather than get run around it. Lord knows how long they ended up sitting waiting for congestion getting in & out of Elkhart to clear when they (possibly) could have just been run around it all.

Otherwise, I pretty much agree with everything else you said and even if their trains don't get priority it's still a better deal for them because they're still doing it. We don't know the inside cost details to be able to do anything more than idlely speculate anyway.

[MagnumForce]

NS treats the CP trains just as they would NS trains, I am not familiar with any situations where the CP trains have been hit at the expense of NS ones.

Hah, well, maybe they treat them like low priority NS trains, but they get stabbed all the time for "hotter" NS traffic and I know a CP engineer who runs that line who would readily back up my comment. Heck, even the last time I was in Indiana CP 143 got stabbed behind a NS junk manifest that was being held waaay out from Elkhart to go into the yard rather than get run around it. Lord knows how long they ended up sitting waiting for congestion getting in & out of Elkhart to clear when they (possibly) could have just been run around it all.

And now I am familiar with situations

[MagnumForce]

So you go get dumped off on the IHB? That isn't a bottleneck at all, also a line I am not so sure CSX would want to part with. I am sure NS would hit them severely with delays at that diamond as well.

[MSchwiebert]

Here's a few ways to look at it, lets say the CP runs 10 trains a day over the Wabash and the NS runs 10 trains a day as well. As a result the fixed costs for upkeep on the line "should" be equal and spread across those 20 trains a day (now the contract may split things a little differently in actuality). Likewise there would also be a split that would be even more beneficial on the Water level route piece - yes there would be more fixed costs because of more "infrastructure" but there are also far more trains to allocate those costs to. Another thing to consider is that currently CP only has Conductors & Engineers hired to operate the train over this route.
Compare this to if CP owned their line - all the fixed costs would have to be covered by just those 10 trains a day. Not only that, they would have to hire MofW crews etc. for the day to day upkeep & programmed maintenance of the line.

Regarding the "shipping costs", under a trackage rights agreement such as this, NS just provides the route (for a trackage rights fee) - the end customer is billed by CP for sending their product from point "a" to point "b". The end customer may not know (or even care) that CP didn't physically own the route that got their goods to where they need to go.

At what point does it become financial viable for CP to go hunting for a route they can buy? that is the big question, almost assurredly in the almost 30 years that CP has been going across Michigan there has been an opportunity or two for them to pick trackage of their own that would get them "almost" all the way to Chicago - or at least to Porter, but they apparently ran the numbers and couldn't make it work as well as staying the course that they had.
One other thing to consider is how good is the margin on the business they do have? Maybe the current model is the only way they can make money on what they haul?

CP has no interest in their own route, especially with EHH at the helm.

My question here is why? Here is a possible answer that I have and you guys tell me what you think. Since CP allows NS to run on the D&H and since NS allows the CP to run on the Wabash, they would rather have agreements like this as opposed to buying another line (like CSX) because that would require a large capital investment whereas the 2 agreements above is a wash and not really costing them money. Another words, CP collects from NS for use of the D&H, then turns around that gives that money back to NS for use of the Wabash, which doesn't hurt nearly as much as buying a new line.

But I can really see the benefits of buying a line like CSX - your own route, not being held up by another railroads trains, a TRUE route to Chicago from Canada that is OWNED by you, potentially lower shipping costs for you customers due to the use of one railroad and not two, etc. Don't these agruments make SOME sense as well? Thanks.

David Lang

[Saturnalia]

Don't forget that if they bought the PM, then they'd get the traffic that already exists, like the coal trains. And coming from this route, CSX seems to be content with their PM routes (at least the GR & Plymouth Subs), so they're likely making a profit at just that. Adding 10 trains per day operated by the same carrier, then the profit would likely increase.

I'm not putting forth another "I want the CP trains back" argument, just looking at it as a practical issue

[MSchwiebert]

Which is also why one doesn't see a class 1 sell a line segment to another class one very often either.

Don't forget that if they bought the PM, then they'd get the traffic that already exists, like the coal trains. And coming from this route, CSX seems to be content with their PM routes (at least the GR & Plymouth Subs), so they're likely making a profit at just that. Adding 10 trains per day operated by the same carrier, then the profit would likely increase.

I'm not putting forth another "I want the CP trains back" argument, just looking at it as a practical issue

[CSX_CO]

Don't forget that if they bought the PM, then they'd get the traffic that already exists, like the coal trains. And coming from this route, CSX seems to be content with their PM routes (at least the GR & Plymouth Subs), so they're likely making a profit at just that. Adding 10 trains per day operated by the same carrier, then the profit would likely increase.

Except when traffic can be re-routed on said carrier around the portion CP picks up. No reason the GR trains (Coal for Saginaw/Flint/Whereever) can't run on CSX going Chicago-Toledo-Detroit and bypass the CP altogether either. Only cars destined to points on the PM would be affected. CSX is probably making a profit for the duration of the haul. I know we end up with cars out of Michigan here in Avon, and send them further on. At best, CP would take it to Chicago or Detroit and have to hand it off. A lot of work for so short of a haulage.

So, even then, the loose car revenues would be split with whomever else has their hands in the haulage. Unit train (Grain out of Grand Ledge for example) revenues would have to be split also, and with the short haul over the PM, CP wouldn't be getting that much in terms of the haul. Makes sense for CSX to keep the business because they get the lions share of the haul.

Practice Safe CSX

[barnstormer]

Just in case no one had seemed to notice or comment the existing tube does accomodate double stacks. Just not two DOMESTIC double stacks. Two international or one domestic and one international.
New tunnel would be good for the state and CP among others.

Actually, if you are refering to domestic as 9' 6", and International as 8' 6", then you are partly right. The north tube will not accommodate any domestic stacked with either a domestic or an international container. All 9' 6" containers (which have a yellow/black strip on the corners as warnings) must be handled singly, and not stacked, as they are restricted, due to clearance issues for the north tube. The south tube cannot handle ANY dbl-stacked equipment, due to not having been reworked, and causes issues with loading/routing of COFC trains. As a once qualified engineer handling trains thru the tubes, I remember several trains being forced to set out cars due to crews spotting a train with 9' 6" containers stacked mistakenly.

-barny

ps. We had paperwork that told us if we were required to go thru the north tube only.

[bctrainfan]

I believe that the theory is that a more direct route from Canada's less crowded eastern ports would greatly increase the container traffic thru Detroit and that a portion of that traffic would be siphoned off at intermodal facilities in Detroit instead of going all the way thru to crowded facilities in Chicago, therefore adding jobs in RR/intermodal facilities, trucking, warehousing, etc., in Detroit. However, I'm not sure how that would play out in the real world.

[azimmer]

If they need more money to get the project rolling, I would suggest that they divert funds from the ridiculous mass transit rail systems that are being proposed.

An expansion of freight rail infrastructure would be the wiser investment. A new tunnel may not reap all of the projected benefits, but money spent on mass transit rail would be an almost certain total loss.

[Saturnalia]

Work could start in 2014:

http://www2.canada.com/windsorstar/news ... 0cdd6152b6