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CSX makes major investment in Canada

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CSX makes major investment in Canada
Posted by Ulrich on Saturday, May 16, 2015 9:44 AM

I haven't seen this make the headlines in the trade press, or maybe I missed it. CSX has opened a 100 million dollar intermodal facility in Valleyfield, Quebec, just outside of Montreal. According to the Globe & Mail, the facility was opened for business earlier this  month. The article went on to state that CN has opposed CSX's yard from the get go, citing that the Railroad would siphon off traffic that until now has gone through the port of Montreal. CSX, of course, says that's not the case, that their new facility will only improve north south trade and will have little affect on CN's mostly east west traffic or loads that currently move through the Port.

I tend to agree with CSX and appreciate their  interest in Canada. Lately all we've been hearing in Canada is how the big US companies have pulled out in favour of greener pastures in Mexico or in America's own heartland. Yet here we have an American company that has made a significant investment in Canada albeit with a little bit of help from the Quebec government. All I can say is thanks CSX and Quebec  for your investment and for creating a few jobs where they're desperately needed. CSX is a true leader in this regard and swimming against the protectionist  tide.

This also represents another milestone: up until now only CN, CP, G&W, Fortress,  and KCS have made any really signifcant foreign investment in their rail operations in the last couple of decades. So much so that CN is the main rail carrier in MS.. So CSX's foray into Canada will balance things out a little and perhaps improve competition and service levels.

 

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Posted by CMStPnP on Saturday, May 16, 2015 11:42 AM

Still murmurring rumors including via Fred Farley in Trains that CP wants to buy CSX via an activist investor and merge with them.

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Posted by Electroliner 1935 on Saturday, May 16, 2015 1:30 PM

How does CSX HHow does CSX serve Valleyfield, Quebec?

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Posted by Ulrich on Saturday, May 16, 2015 2:22 PM

How the mergers play out, if there are to be any more, is anyone's guess. CSX in Valleyfield strengthens north south trade, effectively linking Montreal and most of southern Quebec with the entire Eastern United States via a single rail carrier. Shippers in Quebec can now ship rail to pretty much anywhere east of the Mississippi using a single rail carrier.. that's a big development. In the past that would have required an interline exchange to most major destinations. It will be interesting to see how CSX's presence in Quebec affects intermodal synergies throughout Eastern Canada... how will this play out in Central Canada's manufacturing heartland, Ontario? I guess we'll have to see. Will NS or another US carrier attempt to gain a foothold in Ontario? I'm sure NS isn't sitting on the sidelines... they probably have some grand designs of their own. Should be interestng to watch.   

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Posted by Paul_D_North_Jr on Saturday, May 16, 2015 3:18 PM

Electroliner 1935
How does CSX HHow does CSX serve Valleyfield, Quebec?

CSX calls it the Montreal Subdivision, running northeast from Syracuse - see: http://www.csx.com/index.cfm/customers/maps/csx-system-map/

It used to be a NYC branch, successor to the St. Lawrence & Adirondack.  I don't know what NYC or ConRail called it.  It's close to Larry ("tree 68") here.   See: http://en.wikipedia.org/wiki/Montreal_Subdivision_(CSX_Transportation

How attractive is Montreal as a container port ?  Does Coast Guard Canada ( Smile, Wink & Grin ) keep it ice-free in the winter ?  Is it closer/ shorter to the European ports or cross-Atlantic trade routes than other East Coast US ports ?  See also:

 http://www.csx.com/index.cfm/media/press-releases/csx-plans-new-intermodal-facility-in-quebec/

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Posted by Paul_D_North_Jr on Saturday, May 16, 2015 3:56 PM

Ulrich
[snipped - PDN] ... how will this play out in Central Canada's manufacturing heartland, Ontario? I guess we'll have to see. Will NS or another US carrier attempt to gain a foothold in Ontario? I'm sure NS isn't sitting on the sidelines... they probably have some grand designs of their own. Should be interestng to watch. 

Why not an IM terminal in or around London, Ontario = good access to/ from southwestern Ontario, not too far from Detroit ?  Clearances of the CN tunnel under the St. Clair River from Port Huron to Sarnia are already good for double-stack, and the CP tunnel from Detroit to Windsor is on-track to be expanded soon, when the rest of the funding is in place. 

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Posted by schlimm on Saturday, May 16, 2015 4:43 PM

Paul_D_North_Jr
How attractive is Montreal as a container port ?  Does Coast Guard Canada (  ) keep it ice-free in the winter ?  Is it closer/ shorter to the European ports or cross-Atlantic trade routes than other East Coast US ports ?

Montreal to Rotterdam is 3425 nm.

Baltimore to Rotterdam is 4340 nm.

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Posted by Leo_Ames on Saturday, May 16, 2015 5:02 PM

Electroliner 1935

How does CSX HHow does CSX serve Valleyfield, Quebec?

By way of Canadian National, North of Massena NY, crossing into Canada at Fort Covington. CSX doesn't have any of NYC's old Canadian access.

The river crossing in Massena to Cornwall is long gone (Seaway project led to abandonment in the late 50's), the carferry in Ogdensburg was discontinued over 40 years ago (and the NYC branches to Ogdensburg are both abandoned, now), and trackage rights from Norwood to Malone Junction on the Rutland then NYC to Beauharnois and Adirondack Junction on the Adirondack Division ended with Rutland's abandonment (Was talk back then of the Central buying Norwood to Malone when that happened since they sent so much traffic that way, but it didn't happen). 

The section from Huntingdon on the Adirondack Division's North end, I believe, to Adirondack Junction isn't officially abandoned, as far as I'm aware. But CSX has never ran a train there and it would take millions for that to ever change.

Paul_D_North_Jr
I don't know what NYC or ConRail called it.

I believe that Conrail referred to it as the Montreal Secondary. It was the St. Lawrence Division during NYC days. 

Paul_D_North_Jr
How attractive is Montreal as a container port ? 

I don't think container ships to Montreal are behind this. Montreal is closed during the winter months. I think Sept Iles is the only major port on the St. Lawrence that handles vessels year round [Edit: Looks like Montreal is open year-round].

My impression is that this is to capture North/South traffic that currently are utilizing highways such as I-81.

Paul_D_North_Jr
It used to be a NYC branch, successor to the St. Lawrence & Adirondack.

Secondary mainline is more appropriate than referring to it as a branch line. 

None of the St. Lawrence & Adirondack is used. To the best of my knowledge, that's what Malone Junction to Adirondack Junction was formed as, which is abandoned South of Huntingdon and out of use and largely devoid of trackage North to Adirondack Junction, as I said (Although CSX owns it, it has been many years since it saw a train).

The Rome, Watertown & Ogdensburg is the most prominent of the pre NYC predecessors of today's St. Lawrence Subdivision. 

 

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Posted by Paul_D_North_Jr on Saturday, May 16, 2015 8:37 PM

Thanks for all the information in the above replies - also to "Norm48327", who was kind enough to quickly point out an error in my original post, which led to a little more research, a much better understanding, and edits that improved that post.  Bow

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Posted by cx500 on Sunday, May 17, 2015 1:08 AM

Leo's description needs a bit of correction.  Many years ago when the NYC abandoned from Lake Clear Jct to Malone, they used running rights to reach the isolated northern portion from Massena.  This may at first have been the Rutland, I don't know, but for many years trains used CN's Massena Sub from Massena to regain home rails at Huntingdon.  I believe that segment was bought from CN in the Conrail era, when CN abandoned the eastern portion of the subdivision.  The remainder of the original NYC/PC/CR/CSX north to Adirondack Jct near Montreal is still very much active through Valleyfield as far as Beauharnois.  Beyond there it is out of service but to the best of my knowledge the line is mostly in place with a possibility of a commuter train operation to the Montreal suburb of Chateauguay occasionally proposed.  (The track from Huntingdon south to Malone is also now long abandoned.)  Trains going into Montreal now switch to the CN at Cecile Jct (Valleyfield) to cross the St. Lawrence River and enter CN's Toronto-Montreal main line at Coteau.

Monreal is now indeed a year-round port, courtesy government icebreakers.  Quebec City was another port that used to see a lot of use in winter, but no longer.  Sept Iles' primary role in the past was as a place to transfer bulk cargo from the lakers to ocean going vessels (and of course shipment of iron ore from the mines to the north).

John

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Posted by Leo_Ames on Sunday, May 17, 2015 4:57 AM

Most traffic on today's St. Lawrence Subdivision left the line at Norwood during the 1950's, utilizing trackage rights on the Rutland Railway between Norwood and Malone Junction before rejoining the Central's route in Malone for the short trip North into Canada to Huntingdon. 

As for Canada, it looks like I mispoke and was slightly confused, with the Central's line still active in Huntingdon as you said, rather than CN's line which is gone East of there. But starting about Beauharnois on to Adirondack Junction, is out of service. The former NYC right of way in Chateauguay, owned by CSX but never in service for them, doesn't even have track for an example. This is what I was referring to above.

All of NYC's own gateways into Canada for this line are gone. Only the old Canadian National connection remains for today's St. Lawrence Subdivision, answering the original question of how CSX gets into Canada with this line. 

cx500

 

I believe that segment was bought from CN in the Conrail era, when CN abandoned the eastern portion of the subdivision. 

That appears to be the case. Thanks for the correction since I was under the mistaken impression that it remained a trackage rights agreement to this day.

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Posted by cx500 on Sunday, May 17, 2015 9:08 AM

Exactly.  Since I am now living about 2,000 miles west to the west I was not entirely sure about the physical status of the line east of Beauharnois.  I am aware the rails were not completely intact but had the impression it was only partially lifted, and not necessarily by the railroad.

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Posted by Electroliner 1935 on Sunday, May 17, 2015 6:05 PM

What speed is the Montreal "Secondary" maintained for? Intermodal would want better than 20 mph. Does CSX have "enough" traffic to justify class 4 track?

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Posted by Leo_Ames on Sunday, May 17, 2015 7:23 PM

It's Class 3, like the Delaware & Hudson to the East seems to be [Edit: Or at least that's the speed that CSX runs trains at on the St. Lawrence Subdivision. I suppose that it doesn't necessarily mean that they're not in good enough shape where Class 4 speeds could easily be reached if they desired to run faster].

This is much more than a meandering, slow speed, poorly maintained branch line. No sign of upgrades past that being contemplated at this time though. They've spent a lot of money repairing years of deferred maintenance and building this intermodal yard.

It's time now to start building the traffic that hopefully someday will create the need for further upgrades to increase capacity and enhance the route further in the coming years.

What they have is adequate for the need's of today and for the coming few years. Plus, I don't think speed is too terribly important for this relatively short corridor. The bigger goal of eliminating the many speed restrictions that had existed is to once again reliably allow a single crew to go the length of the line.

Outlawing had gotten pretty much to be the rule, rather than the exception, until the last couple of years. Two crews doing the job that one should be able to do is a significant extra expense, not to mention the operational constraints it was placing since this single tracked route isn't blessed with an abundance of sidings.

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Posted by MidlandMike on Sunday, May 17, 2015 9:15 PM

cx500

...

Monreal is now indeed a year-round port, courtesy government icebreakers.  Quebec City was another port that used to see a lot of use in winter, but no longer.  Sept Iles' primary role in the past was as a place to transfer bulk cargo from the lakers to ocean going vessels (and of course shipment of iron ore from the mines to the north).

John

 

Did Quebec City port fall out of favor since Montreal became an all season port?  Is that also why GT sold off the Portland line?

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Posted by Ulrich on Monday, May 18, 2015 8:32 AM

Mike, you bring up an interesting point. Port of Quebec never fell out of favour in comparison to Montreal; Quebec is located on the "wrong" side of the River, making access to major markets in the United States difficult. Really, the port should have been built directly across the River in Levis, QC. In fact, there was a significant port operation there back in the late 1800s to early part of the 20th century. Why Levis fell out of favour is a mystery to me... I've asked people and have tried to read about it, but no real answer. Levis offered a straight shot to  major US markets via the Quebec Central as well as direct routes to Central Canada. Port of Quebec is small today because it doesn't offer intermodal shipping (another mystery to me as to why they don't) and due to the aforementioned inconvenient location.  Montreal is also closer to major markets than Quebec is, offering better access to road and rail connections.

About GT's Portland line, it's fortunes were heavily dependent on Portland, ME's status as an international port. Over the years other ports (for whatever reasons) surpassed Portland, and the GT's role as an important bridge route and competitor with Port of Montreal steadily declined. Moreover, when Montreal became an all season port Portland's raison etre pretty much went to nothing as the whole idea behind that port was its all season capability relative to Montreal. The GT line was also an important connection for Sherbrooke, QC and other communities along its line that had significant manufacturing..  as manufacturing in Quebec declined so did the on line traffic, and CN eventually made the decision to pull out. Now manufacturing is making a bit of a comeback in that region and G&W's entrepreneurial approach to transportation has given the line some vestige of hope for the future. Only time will tell. 

There's also someone (Sartigan Railway) who is trying to bring the old Quebec Central back to life, and best of luck to them.  I'm sure they see the same thing a few others see: namely the most direct rail route to the United States from North Central Quebec.  They have a long ways to go to bring it back to vitality, although they're making progress with one RS-18 and a few cars.  

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Posted by MarknLisa on Monday, May 18, 2015 5:16 PM

Used to be that domestic intermodal from Montreal to GA & FL was not a viable option. Now the Valleyfield ramp services thoses lanes nicely. 

As far as CSX moving into the Toronto market..  That area is already easliy served by the CSX & NS ramps in Buffalo.

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Posted by Ulrich on Monday, May 18, 2015 6:59 PM

Good point MarknLisa, Buffalo has impressive rail access. but its still a 90 mile drive form Toronto along the busy QEW. A facility on the outskirts of Toronto (like the one CN is contemplating in Milton) would  give whoever owns it a significant and sustainable competitive advantage. Land in Southern Ontario isn't getting any cheaper, and there's less of it available for such purposes with each passing year.  Trucking containers to Buffalo is prohitively expensive and would add upwards of  $550.00 to each move, not to mention the additional service variability that is part and parcel of crossing trucks at one of the busiest international border points in the world.

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Posted by BaltACD on Tuesday, May 19, 2015 12:08 PM

Toronto's location, virtually in the middle of the North shore of Lake Erie, effectively closes off the Southeastern US as a viable market for Toronto.  E-W&N for all of Canada is fine.  Access to the Mid-West and Western US is good.  Access to the extreme Northeast of the US is OK. 

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Posted by MidlandMike on Tuesday, May 19, 2015 7:42 PM

Toronto is actually rather close to the west end of Lake Ontario, and the west end (Hamilton) is within the commuter train district.  A southeastern CSX train that came up thru the NY/NJ area would have to jog from Selkirk to Syracuse.  From there it is equidistant to either Montreal or Toronto.  If the train came up thru Ohio, then Toronto would be closer.

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Posted by tree68 on Tuesday, May 19, 2015 8:29 PM

Thanks to Leo for covering the specifics of the St Lawrence Sub.  I was out of the mix for a bit.

After substantial work, the St Lawrence Sub was brought back up to 40 MPH from the 25 MPH CSX had allowed the sub to deteriorate to.  CSX has had the line on the block for some time, with no takers.  The possibility of the intermodal traffic apparently changed their mind.

While there are no solid IM trains yet, there is a lot of IM in the trains that are running.  I suspect said IM goes to the IM yard at Dewitt for further handling.  From there it's an easy shot east or west.

Old aerial photos show a diamond at Syracuse where the current SL Sub  enters the Chicago Line (CP291).  One wonders what might have been if that diamond were still in place and IM traffic could continue to follow I-81 through Binghamton and on to points south.

A lot of the Central's Montreal traffic (including the "Banana Train") travelled up the old Mohawk and Malone (NYC Adirondack Division) until the portion north of Lake Clear was abandoned in the 1950's.

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Posted by MidlandMike on Tuesday, May 19, 2015 9:15 PM

Tree, I was wondering why we had not heard from you.

I am guessing that other than the diamond, NYS&W is still intact Syracuse to Binghamton.  Of course NS now owns south of there.  If CSX has sucess with Montreal IM, I wonder if NS will buy the rest of D&H north of Albany to get in on the action.

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Posted by daveklepper on Wednesday, May 20, 2015 3:06 AM

But CP still needs the D&H north of Schenectady to reach the New York area market. They are still running their own trains to and from Fresh Pond Junction, Long Island, via trackage rights on the CSX`and Metro North Hudson River Line and over the Hell Gate Bridge.   They may host NS trains, though.

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Posted by tree68 on Wednesday, May 20, 2015 7:54 AM

MidlandMike
...NYS&W is still intact Syracuse to Binghamton.

And it is.  The Suzie Q runs on the former Erie Lackawanna from Syracuse to Binghampton.  I think CP has the line south to Scranton (over Tunkahannock Viaduct).

Unless there's track (or lack thereof) I'm not aware of, it might still be possible to get a container from Montreal as far as Scranton with little problem.  South of Scranton, I have no idea.

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Posted by Paul_D_North_Jr on Wednesday, May 20, 2015 8:27 PM

CP Rail map (caution - big file - 39" x 27" size, 13.7 MB):

http://www.cpr.ca/en/choose-rail-site/Documents/cp-network-map.pdf 

South of Scranton, CP's 'own' track goes only to Sunbury, PA, via the ex-PRR Northumberland - Wilkes-Barre branch. 

However, starting at Dupont, PA (just southwest of Scranton), CP apparently does (did ?) have trackage rights over NS to Philadelphia - a major CSX town, esp. in the South and Southwestern portions - via 2 different routes:  

  • To Allentown/ Bethlehem via the Lehigh Line, then to Reading via the Reading Line, thence to Philly (CP units are often seen 'laying over' on a stub track east of the Allentown Yard, near downtown Bethlehem);
  • To Sunbury as above, then to Harrisburg, then back to the southeast to Reading, thence to Philly (I have no idea how often this route is used, or whether it could be used to reach CSX tracks that come up from Maryland a few miles to the southwest). 

However, I've read that a few years back, CP pulled out of Philadelphia. 

See: http://en.wikipedia.org/wiki/Philadelphia_Belt_Line_Railroad 

http://www.trainweb.org/phillynrhs/PBL.html (about 1/3 and 1/2 of the way down the page)

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Posted by MidlandMike on Wednesday, May 20, 2015 10:13 PM
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Posted by daveklepper on Thursday, May 21, 2015 1:09 PM

CP trraffic to the southern states has generally been interchanged with CSX in the Al;bany - Schenectidy area, and I imagine that CP units are seen at Selkirk. Now it will also be interchanged with NS in that area, probably using a yard jointly l used by CP (ex-D&H) amd NS.   The several-times-a-week CP train to and from Fresh Pond Yard in Long Island is mostly Long Island traffic, and there is both industry and farming on Long Island, with the New York and Atlantic handling the traffic to and from Fresh Pond Yard.   I do not believe any of CP's traffic is car floated to New Jersey. But I could be surprised.   In addition to the CP trackage rights to Fresh Pond Yard, Providence and Worcester also has them, and then of course CSX uses its track as well.

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Posted by CNSF on Wednesday, May 27, 2015 7:25 PM

Regarding some of the earlier comments: NS had an intermodal facility in Welland, ON (near Niagara Falls) for many years before eventually closing it as part of their overall 'walk-away' from their old Wabash route between Buffalo and Detroit (most of which has now been pulled up). I think they may still have some sort of trackage or haulage rights via CN's remaining route but am not sure whether they utilize it to run through trains.

Buffalo is definitely close enough to the greater Toronto/Hamilton area to serve markets to the south and east. For a time CN and CSX ran a through joint intermodal service between one of the ports at NY/NJ and CN's Toronto ramp but I believe CN lost interest (short haul) and it's all being trucked from Buffalo again now. From the western US, a lot of southern Ontario intermodal traffic is trucked from Detroit or even all the way from Chicago. This is due to the lack of enough concentration to drive through steel-wheel service to Toronto. I know it seems strange, but once the unit has been grounded at Chicago, it's no longer a 2,000-mile haul, you're now looking at the economics of a 500-mile intermodal haul versus truck - and truck usually wins those. So I don't foresee NS building in London or anywhere else in southern Ontario. (CN grabbed the land for their newly-announced Milton terminal at least 12-15 years ago - I doubt it would be possible to find a parcel like that now - at least not a prices low enough to support a rail operation).

As for CN's objections to CSX's ramp at Montreal, that's an interesting one. On paper, you would think CSX's facility opens up the very substantial Quebec - southeast US market, which is almost purely trucked today, to intermodal competition. But does CSX actually run a truck-competitive north-south intermodal service between former NYC territory and former Seaboard territory? The last time I checked, they hadn't bridged the Mason-Dixon line yet, and all their intermodal traffic flow on the northern tier ran east-west. Admittedly, it was more than 10 years ago when I was last active in the game, so perhaps that's changed?

Meanwhile, the port of Montreal doesn't only serve the substantial Quebec/Ontario market, it's also popular for US Midwest traffic. Historically, CP dominated CN at Montreal (maybe that's changed too?) and they did a very brisk intermodal business between the port of Montreal, Detroit, and Chicago. So I'm betting at least a portion of CSX's business out of the new ramp will simply be diverted from CP and/or CN.

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Posted by Ulrich on Wednesday, May 27, 2015 9:03 PM

I think CSX is probably more interested in the inbound volumes to Quebec than on the outbounds. Quebec is much like Florida: the Province's manufacturing sector is much diminished over what it was even 10 years ago, and there's nothing on the horizon to suggest that the current trend will be reversed. Thus outbound longhaul loads that are rail competitive  are very cheap while inbound rates are quite high. Shorthaul rates are also quite high, but CSX is not going after those, so they're out of the mix as far as this discussion goes.

Basically what CSX has now is a direct route INTO Quebec from all points east of the Mississippi. Quebec is Canada's second most populous province and as such is an important consumer of American products. In a way its a perfect market for a railway due to this lane imbalance.  Any outbound intermodal traffic is, I think, incidental, and secondary to the primary objective of reaching Quebec's consumer market.

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