dakotafredUnfair, Tree. UP kept the "Union" from their road and the "Pacific" from SP.
They also agreed to put gray and red on their locomotives...
On a more serious note, I wonder if fixing Chicago and the other East/West interchange points through transcontinental mergers is worth the costs of mandatory reciprocal switching?
zugmann Paul_D_North_Jr Where does NS connect directly with CP - 1) anyplace ? Schenectady, NY on the east coast.
Paul_D_North_Jr Where does NS connect directly with CP - 1) anyplace ?
Schenectady, NY on the east coast.
Yes. At Mohawk yard.
Also at Buffalo/Niagara Falls, Detroit, Chicago.
I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of.
Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago).
Traffic flow is generally west to east, and the western road want the longest haul they can get. That means Chicago, most often, even when KC, StL, or Memphis might make better sense.
Another example would be chemical traffic from Texas to NJ. Now, most of it goes all the way up to Salem IL, then east through NY and finally down to NJ. The best route would be to interchange the traffic at New Orleans and run directly to NJ through Atlanta. But, that doesn't happen because that would short-haul UP or leave the traffic up for grabs between BNSF and UP.
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
oltmannd zugmann Paul_D_North_Jr Schenectady, NY on the east coast. Yes. At Mohawk yard. Also at Buffalo/Niagara Falls, Detroit, Chicago. I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of. Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago). Traffic flow is generally west to east, and the western road want the longest haul they can get. That means Chicago, most often, even when KC, StL, or Memphis might make better sense. Another example would be chemical traffic from Texas to NJ. Now, most of it goes all the way up to Salem IL, then east through NY and finally down to NJ. The best route would be to interchange the traffic at New Orleans and run directly to NJ through Atlanta. But, that doesn't happen because that would short-haul UP or leave the traffic up for grabs between BNSF and UP.
zugmann Paul_D_North_Jr Schenectady, NY on the east coast.
Paul_D_North_Jr
I know UP routes a 'whole bunch' of chemical traffic through NOLA - mostly in run-through trains on CSX - how much chemical traffic NS gets through NOLA I have no idea. Salem, IL is a CSX connection anyway.
Never too old to have a happy childhood!
Also a CP-NS merger would mean the new entity controls at least 33% of the Belt Railway of Chicago.
BaltACD oltmannd zugmann Paul_D_North_Jr Schenectady, NY on the east coast. Yes. At Mohawk yard. Also at Buffalo/Niagara Falls, Detroit, Chicago. I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of. Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago). Traffic flow is generally west to east, and the western road want the longest haul they can get. That means Chicago, most often, even when KC, StL, or Memphis might make better sense. Another example would be chemical traffic from Texas to NJ. Now, most of it goes all the way up to Salem IL, then east through NY and finally down to NJ. The best route would be to interchange the traffic at New Orleans and run directly to NJ through Atlanta. But, that doesn't happen because that would short-haul UP or leave the traffic up for grabs between BNSF and UP. I know UP routes a 'whole bunch' of chemical traffic through NOLA - mostly in run-through trains on CSX - how much chemical traffic NS gets through NOLA I have no idea. Salem, IL is a CSX connection anyway.
I would bet that none of the chemical traffic over NOLA is headed to the northeast.
Either CSX or NS over NOLA thru Atlanta would be better than UP/CSX over Salem.
oltmannd BaltACD oltmannd zugmann Paul_D_North_Jr Schenectady, NY on the east coast. Yes. At Mohawk yard. Also at Buffalo/Niagara Falls, Detroit, Chicago. I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of. Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago). Traffic flow is generally west to east, and the western road want the longest haul they can get. That means Chicago, most often, even when KC, StL, or Memphis might make better sense. Another example would be chemical traffic from Texas to NJ. Now, most of it goes all the way up to Salem IL, then east through NY and finally down to NJ. The best route would be to interchange the traffic at New Orleans and run directly to NJ through Atlanta. But, that doesn't happen because that would short-haul UP or leave the traffic up for grabs between BNSF and UP. I know UP routes a 'whole bunch' of chemical traffic through NOLA - mostly in run-through trains on CSX - how much chemical traffic NS gets through NOLA I have no idea. Salem, IL is a CSX connection anyway. I would bet that none of the chemical traffic over NOLA is headed to the northeast. Either CSX or NS over NOLA thru Atlanta would be better than UP/CSX over Salem.
The runthrough trains received from the UP at NOLA are destined to Waycross and Hamlet. Where the traffic goes beyond those major classification yards is the 'great unknown' without knowing specifically what traffic is being handled.
A number of years ago CSX & UP undertook a routing rationalization program to maximize the operating parameters of the traffic that is handled between the carriers. Part of the plan was train blocking as well as changing gateways on some traffic to help the overall operations of both carriers. It is my belief that these kinds of rationalization programs have taken place between all the Class 1 carriers for their mutual benefits.
BaltACD oltmannd BaltACD oltmannd zugmann Paul_D_North_Jr Schenectady, NY on the east coast. Yes. At Mohawk yard. Also at Buffalo/Niagara Falls, Detroit, Chicago. I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of. Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago). Traffic flow is generally west to east, and the western road want the longest haul they can get. That means Chicago, most often, even when KC, StL, or Memphis might make better sense. Another example would be chemical traffic from Texas to NJ. Now, most of it goes all the way up to Salem IL, then east through NY and finally down to NJ. The best route would be to interchange the traffic at New Orleans and run directly to NJ through Atlanta. But, that doesn't happen because that would short-haul UP or leave the traffic up for grabs between BNSF and UP. I know UP routes a 'whole bunch' of chemical traffic through NOLA - mostly in run-through trains on CSX - how much chemical traffic NS gets through NOLA I have no idea. Salem, IL is a CSX connection anyway. I would bet that none of the chemical traffic over NOLA is headed to the northeast. Either CSX or NS over NOLA thru Atlanta would be better than UP/CSX over Salem. The runthrough trains received from the UP at NOLA are destined to Waycross and Hamlet. Where the traffic goes beyond those major classification yards is the 'great unknown' without knowing specifically what traffic is being handled. A number of years ago CSX & UP undertook a routing rationalization program to maximize the operating parameters of the traffic that is handled between the carriers. Part of the plan was train blocking as well as changing gateways on some traffic to help the overall operations of both carriers. It is my belief that these kinds of rationalization programs have taken place between all the Class 1 carriers for their mutual benefits.
Johnny
Deggesty BaltACD oltmannd BaltACD oltmannd zugmann Paul_D_North_Jr Schenectady, NY on the east coast. Yes. At Mohawk yard. Also at Buffalo/Niagara Falls, Detroit, Chicago. I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of. Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago). Traffic flow is generally west to east, and the western road want the longest haul they can get. That means Chicago, most often, even when KC, StL, or Memphis might make better sense. Another example would be chemical traffic from Texas to NJ. Now, most of it goes all the way up to Salem IL, then east through NY and finally down to NJ. The best route would be to interchange the traffic at New Orleans and run directly to NJ through Atlanta. But, that doesn't happen because that would short-haul UP or leave the traffic up for grabs between BNSF and UP. I know UP routes a 'whole bunch' of chemical traffic through NOLA - mostly in run-through trains on CSX - how much chemical traffic NS gets through NOLA I have no idea. Salem, IL is a CSX connection anyway. I would bet that none of the chemical traffic over NOLA is headed to the northeast. Either CSX or NS over NOLA thru Atlanta would be better than UP/CSX over Salem. The runthrough trains received from the UP at NOLA are destined to Waycross and Hamlet. Where the traffic goes beyond those major classification yards is the 'great unknown' without knowing specifically what traffic is being handled. A number of years ago CSX & UP undertook a routing rationalization program to maximize the operating parameters of the traffic that is handled between the carriers. Part of the plan was train blocking as well as changing gateways on some traffic to help the overall operations of both carriers. It is my belief that these kinds of rationalization programs have taken place between all the Class 1 carriers for their mutual benefits. Balt, do these runthroughs go by way of Pensacola and Baldwin and then take what is left of the Baldwin Cutoff up to Callahan?
Balt, do these runthroughs go by way of Pensacola and Baldwin and then take what is left of the Baldwin Cutoff up to Callahan?
Some do.
Quoting BaltACD: "Balt, do these runthroughs go by way of Pensacola and Baldwin and then take what is left of the Baldwin Cutoff up to Callahan?
Some do."
How do the others run, especially to Waycross? Up to Montgomery and then either directly to Waycross or via the West Point Route to the junction with the former AB&C and thence to Waycross?
I presume that the line through Pensacola is still dark west of Chattahoochee, and the Montgomery-Waycross line is also dark.
They make you a Hamlet. Interesting. Good chance some of that goes to the Northeast, then. We get a solid train from the UP each day but I think it's Birminghams and Chattanoogas...
From oltmannd above: "I think CP is the worst fit for NS compared to UP, BNSF and CN. It doesn't fix any interchange issues or smooth traffic flow anywhere that I can think of.
Where I think EHH has a point is that mergers can be beneficial is fixing some of the stupid traffic routes that exist (and help clog up Chicago)."
BaltACD [snipped- PDN] . . . A number of years ago CSX & UP undertook a routing rationalization program to maximize the operating parameters of the traffic that is handled between the carriers. Part of the plan was train blocking as well as changing gateways on some traffic to help the overall operations of both carriers. It is my belief that these kinds of rationalization programs have taken place between all the Class 1 carriers for their mutual benefits.
It's always popular for CEOs and hedge funds to claim that efficiencies can be achieved, etc., as EHH has done in the past. But without an independent assessment of that, it's not credible. To me, it's misleading and deceptive and ought to be subject to a "put up or shut up" challenge and burden of proof. Failure to simultaneously back up those kinds of claims with substantial evidence should lead to heavy civil penalties and jail as securities manipulation and fraud. Won't see that in my lifetime, though.
- Paul North.
Paul-
A study would give the magnitude of the benefit, but I can tell you the problem is that the RRs really don't play all that well together. There's a lot of "we're going to do this our way because that's how we do it and you can just adjust." Just on the operations side, each RR, to some degree tries to optimize their own network which may be to the detriment of the whole. On the marketing side. any change to an interchange location means having to split the revenue differently, which always will impact one party's revenue goals.
Let's say you figure out it would be better overall to have UP give you a North Platte block for Bellevue at Kansas City intead of Chicago and in return, you'd give them a North Platte built at Bellevue. UP has to figure out what that means in terms of crews and locomotives - and the change in rate split. If it comes out a wash, they won't do the change. Only obvious "win-wins" have a chance. Otherwise there is suspicion the other guy is trying to get one over on you.
A merger would stop all this nonsense. But, so could some good leadership.
OK, why can't the STB tell the railroads for example the UP/NS interchange at bellbue is better overall so do it?
What would Robert Young say about a freight car crossing the country without changing railroads?
caldreamer OK, why can't the STB tell the railroads for example the UP/NS interchange at bellbue is better overall so do it?
How would the STB know? Even if they did, how would it be fair to take money from UP and give it to NS?
Victrola1 What would Robert Young say about a freight car crossing the country without changing railroads?
Well;he apparently thought that a freight car that changed railroads was good enough for the hog...
"I Often Dream of Trains"-From the Album of the Same Name by Robyn Hitchcock
Victrola1
US carriers demonstrated that multiple roads could cooperate in operating long distance trains over multiple carriers (California Zephyr, UP 'City' streamliners etc.).
The question becomes, why they did not cooperate in operating long distance trains transcontinentally over the Mississippi River - with nominally, Chicago, St. Louis, Memphis and New Orleans being terminal gateways between East and West.
BaltACD Victrola1 US carriers demonstrated that multiple roads could cooperate in operating long distance trains over multiple carriers (California Zephyr, UP 'City' streamliners etc.). The question becomes, why they did not cooperate in operating long distance trains transcontinentally over the Mississippi River - with nominally, Chicago, St. Louis, Memphis and New Orleans being terminal gateways between East and West.
Before the inauguration of the Canadian and the Super Continental, seldom were there more than two through sleepers between either Montreal or Toronto and Vancouver on either road.
ChessieCat123 Control of a major piece of national infrastucture by a foreign corperation that is essentional to our national defence does not sit well with many people.
Control of a major piece of national infrastucture by a foreign corperation that is essentional to our national defence does not sit well with many people.
Better a private corporation with HQ in our friendly neighbor to the north than nationalization. Which is not in any way to suggest that nationalization (a la PC) is an option. I'm just saying that there are many things worse than having a Canadian corporation control a major US company.
ChuckAllen, TX
cefinkjr ChessieCat123 Control of a major piece of national infrastucture by a foreign corperation that is essentional to our national defence does not sit well with many people. Better a private corporation with HQ in our friendly neighbor to the north than nationalization. Which is not in any way to suggest that nationalization (a la PC) is an option. I'm just saying that there are many things worse than having a Canadian corporation control a major US company.
Well! Seems likw the " Cat" is officially out of the bag
Today's TRAINS Newsdwire carries the Headline " CP confirms merger offer "
FTA"...“We think eventually, it’s going to happen,” [Mr. Keith] Creel,[ COO] says. "...An end-to-end merger that would improve service and boost competition would be a recipe for success at the U.S. Surface Transportation Board, Creel says. But for a deal to make sense, Creel says shippers would have to be on board and CP would have to have a friendly merger partner so the railroads would speak with a common voice. The railroad used similar language in its news release. CP is taking the lead in promoting consolidation because it’s the right thing to do, Creel says, and because the railway’s service model and lower costs help shippers win in their end markets. “That’s compelling,” he says. Creel says that the merger process will not be easy but that regulatory hurdles can be overcome..."
Will be an intersting circumstance to follow.... Wonder How Long it may take?
"Paging Mr. Buffett. Mr. Warren Buffett. Paging Mr. Warren Buffett. Please see the concierge regarding a large black and white package that has been delivered to your attention."
For some time I have hoped that CP and KCS would tie the knot. Forming a multi-national railroad (CP/KCS/KCSdeM) should give Hunter Harrison a nice legacy and provide CN with a formidable competitor.
http://www.cpr.ca/en/investors/cp-discloses-full-details-of-offer-letter-to-norfolk-southern
CP puts out their offer in a press release. Is CP serious, or just more hype?
If the CP - NS merger falls through, will it still scare others to merger?
Is there an 'under story' with Ackman's railroad forays - "moneyball" among the super rich?
http://www.usatoday.com/story/money/2015/11/18/bill-ackman-right-warren-buffett-and-coca-cola/75994220/
EHH and Creel talk about synergies; if this merger occurs, based on their history at CN & CP, expect massive job cuts at NS. The operating ratio is mainly reduced by reducing employee costs.
Beats Canadian Pacific and CSX. I didn't like the thoughts of that one, since I don't see them needing two US gateways to Montreal. At least if this happens, the CN/CSX traffic is likely to stay on the St. Lawrence Subdivision while the status quo largely would stay the same on the D&H.
That said, I don't think it will happen. I see little strategic value in this or opportunities for cost-cutting. I think it's a weak attempt at inflating share prices and perhaps testing the waters for an unlikely further round of mergers that actually makes some sense.
And while the railfan in me shares the concern about the steam program and the heritage paintschemes, the fate of Altoona & Roanoke is even more important. CPR under Harrison isn't likely to see the sense in maintaining these two valuable assets when he can instead see short-term gains by eliminating at least one of them.
Unlike the heritage locomotives that have no noticeable effect on the bottom line, these resources seem like they're only a positive for NS's finances. Would be a shame to see a lot of jobs and a resource like that be eliminated for some weak short-term effects that will soon cost the combined company more than they ever saved.
Hopefully it doesn't happen. Beyond perhaps KCS, Class 1 mergers have gone about as far as they make any sense to go. Any further than this is only going to hurt competition and offer few opportunities to realize significant savings.
Efforts would be better spent joining forces to solve congestion in an area like Chicago, which could benefit every stakeholder. If any major aquisitions happen, I would instead expect it to be a large regional like MRL rejoining the Class 1 fold.
Hopefully the government does the right thing for a change if this ends up actually being serious.
Had an investment person say that he found it ironic that NS buys a CP line with money that CP will use to buy some of NS.
C&NW, CA&E, MILW, CGW and IC fan
The part I don't understand is CP eagerness to give away the store with reciprocal switching.
1. Why should this even be necessary in what is billed as an end-to-end deal?
2. If the shippers and gummint are going to insist, shouldn't the concession be withheld, as a bargaining chip, until a lot later on in the process?
dakotafred The part I don't understand is CP eagerness to give away the store with reciprocal switching. 1. Why should this even be necessary in what is billed as an end-to-end deal? 2. If the shippers and gummint are going to insist, shouldn't the concession be withheld, as a bargaining chip, until a lot later on in the process?
We may learn more tomorrow as EHH is an interviewee on Bloomberg GO sometime between 7-9 CST.
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