FD-36744 at Surface Transportation Board. The thing is being handled as a voting trust agreement as opposed to a merger or acquisition. Somewhere in December the 12/6/23 filing eventually appeared. Two private individuals, one a former Mayor of Johnson IA and the other an off-line local Ames resident have filed protests, that's all.
jeffhergert We just had discussions on CN and pulpwood business in Wisconsin. A press release said there are 20 on-line elevators. I imagine few can load a unit train. Will CN be willing to form trains from small blocks (10 or 20) of cars? There's a few relatively big fish to interest CN, but I think the small fry will lose out.
We just had discussions on CN and pulpwood business in Wisconsin. A press release said there are 20 on-line elevators. I imagine few can load a unit train. Will CN be willing to form trains from small blocks (10 or 20) of cars? There's a few relatively big fish to interest CN, but I think the small fry will lose out.
I have witnessed the re-aquistion of a couple of short lines by a Class 1 from the Class 1 side. One of them sounds a little bit like the IANR in terms of traffic mix. The main thing driving the sale was that the Class 1 and the short line couldn't agree on terms for developing and serving online unit train facilities. It makes some sense why different parties would have different priorities. Without having any inside info, my bet is that some customers - the ones who had the volume and the capital to convert to unit trains - were very excited, and that others probably weren't.
The line got major capital investment (bridge replacements and speed upgrades) in the years following the acquisition. That's something the short line had not been able to do, and it will likely keep the line viable for decades to come.
Dan
GrampMakes me wonder what the US would look like if railroads were broken up into smaller competing pieces with people who want to develop business by serving customers well. These productive short lines are castoffs. Just think what routes with lots of economic activity could create.
Remember - after WW II there were something like 130 Class 1 railroads in existence. With that being said, the kinds of industrial production that allowed those companies to operate with subsistence level revenues, no longer exists. Over the nearly 80 years since the end of the War, the companies have undertaken mergers, acquisitions and the abandoning of parallel lines as defense mechanisms to stave off bankruptcies. Bankruptcies that claimed Penn Central, Rock Island and Milwaukee Road among the major financial casualties and many others too numerous to recite from memory.
Until the Staggers Act of 1980 the railroads were under the economic thumb of the Interstate Commerce Commission who viewed the carriers as the same Robber Barons whose business practices occasioned the ICC in the first place, however, in the 20th Century the business dynamics were totally different and the carriers, as a industry had serious trouble in attracting investments into improving the various aspects of the companies to attract and meet customers desires.
Subsequent to Staggers the carriers could divest themselves of line segments that did not meet the economic standards necessary for their continued operation by the carriers. Once those lines were identified they were turned into money - either by selling or leasing the lines to short line operators or by abandoning the lines and selling the reclaimed track materials for scrap.
Many of the locations I worked in the early years of my career have become history in all three of those financial vehicles. Some locations are on lines that have been sold, some are on locations that have been leased, some locations have been on lines that have been abandoned and sold for their scrap value. Some are also in a fourth category - removed from operation by the carrier but still owned by the carrier.
The industrial character of the USA has changed drastically in the near 80 years since the end of the War.
Never too old to have a happy childhood!
Makes me wonder what the US would look like if railroads were broken up into smaller competing pieces with people who want to develop business by serving customers well. These productive short lines are castoffs. Just think what routes with lots of economic activity could create.
(1) As of today 12-12-23, CN-IC has not filed with the STB to acquire IANR. This is unusually tardy to even post the notice of intent to acquire. (No finance docket number assigned yet)
(2) Wonder what this does to the leases of remnants of non-core CRIP lines currently in the hopper at STB ? Do those line owners re-think what they are doing?
jeffhergertIt makes me wonder if the class ones only see the total numbers of revenue that the short line/regional has developed, but not how that revenue is actually made. Once the class one reacquires a line, it starts shedding some lines of business. Business that added to the independent short line/regional's revenue numbers.
My Brother in Law worked in the Auto-Industry and told me tales about how Norfolk Southern would turn away auto parts business hauls from Detroit to Southern Ohio or Northern Kentucky as not being long enough distance wise for the railroad to make as much money as they could hauling other business or something of that nature. So I have heard that as well. I would think that was sufficient enough distance for auto-parts to make money. They used to haul auto frames from Milwaukee to the Detroit area and Twin Cities auto plants.
BaltACD CMStPnP Interesting when a Class I buys a short line. In my view it says some of the earlier abandonments or line sales were made in haste and not well thought out. At the time the lines were sold off, there wasn't sufficient business to warrant their retention. However, over thirty to forty years, business enviornments change coupled with the entrapnural actions of the new owners can totally change the business potential of a line. The bigger question is will the 'new' owners continue the business accumen that brought about the resurgance of the line.
CMStPnP Interesting when a Class I buys a short line. In my view it says some of the earlier abandonments or line sales were made in haste and not well thought out.
At the time the lines were sold off, there wasn't sufficient business to warrant their retention. However, over thirty to forty years, business enviornments change coupled with the entrapnural actions of the new owners can totally change the business potential of a line. The bigger question is will the 'new' owners continue the business accumen that brought about the resurgance of the line.
Shortly after the IC bought back the Chicago Central I talked with a guy who had done some consulting work for some shippers on that line. He said once IC had reacquired it, some of the small shippers were beginning to have trouble getting service. It was business that the original IC/ICG had let whither away and the CC&P had been able to get back.
It makes me wonder if the class ones only see the total numbers of revenue that the short line/regional has developed, but not how that revenue is actually made. Once the class one reacquires a line, it starts shedding some lines of business. Business that added to the independent short line/regional's revenue numbers.
Jeff
jeffhergert Reading some of the articles about Sabin and/or IANR, it sounds like there has been a lot of grain movement from on-line elevators to ADM and/or Cargil in Cedar Rapids. I get the impression it's in the form of picking up 10 or so cars here and there. Would CN be interested in providing a service like this?
Reading some of the articles about Sabin and/or IANR, it sounds like there has been a lot of grain movement from on-line elevators to ADM and/or Cargil in Cedar Rapids. I get the impression it's in the form of picking up 10 or so cars here and there. Would CN be interested in providing a service like this?
CN will do short haul moves when it suits them. The gypsum trains around Halifax are a good example and they also do shorter cuts (about 25 cars at a time) of gravel in the Grande Prairie, Alberta area and have been moving rock in gondolas for the Site C dam project in northeastern British Columbia. But I'm guessing the customers get charged a premium for this sort of service.
I agree that it is likely that the IANR will be allowed to continue operating at arms length from the rest of CN, at least initially. We'll see what happens in the long term.
Greetings from Alberta
-an Articulate Malcontent
CMStPnPInteresting when a Class I buys a short line. In my view it says some of the earlier abandonments or line sales were made in haste and not well thought out.
Interesting when a Class I buys a short line. In my view it says some of the earlier abandonments or line sales were made in haste and not well thought out.
A typical grain flow would utilize 53' trailers from field to a truck serviced elevator, and then trucked on to a local processing plant or a rail/barge transload. This catchment is too close to the river for (regular and profitable) outbound unit grain. The product flows out of the big ag processing plants drove the deal. IANR has a solid portfolio of transload and terminal service facilities and the CN branch apparently does not.
Viewing the Manchester line using Google there are a couple of sidings - one in Ryan next to a grain co-op but no loading facilities and appears to have cars stored, and another in Central City that looks like it may be used to bring in ammonia and such for fertilizer but certainly it is not used for grain.
Quite sparse between Manchester and Cedar Rapids.
Los Angeles Rams GuyI personally don't think that CN's secondary mainline from Manchester down to Cedar Rapids is in any danger because (1) there's still a good chunk of traffic that comes from Canada (specifically oats for Quaker Oats) and other eastern origination points that gets re-classified at Kirk Yard that's destined for Cedar Rapids and I don't think CN wants to plug up Waterloo Yard just to shove it all down the IANR.
Well, I don't know. If a railroad has two low density lines going to the same place it's usually going to be money ahead if it can concentrate all the business on one line and abandon the 2nd line.
How is the Cedar Rapids business out of Chicago handled now? Does Kirk Yard make a set out block for Manchester, IA that would include the Cedar Rapids cars? Or, do they just run the CR business into Waterloo, sort it out, and have a local take it back to Manchester? Or something else?
Waterloo is kind of a hub for the CN in Iowa. They run one merchandise train per day from Kirk Yard to Waterloo. Then they sort out the cars and send them west, north, or to Waterloo customers. The Iowa Northern can add "South" to the destination list.
We'll see what they do. In any event, it's good to see the CN expanding its presence in Iowa. First, they go after the Gulfport banana business. Now they expand in Iowa. I love it.
BaltACD Victrola1 Check out the Iowa DOT tonnage map. Compare the CN from Manchester to Cedar Rapids to the Iowa Northern from Waterloo to Cedar Rapids. Also compare the Iowa Northern from Cedar Falls north to the CN north from Waterloo. The lines are not far apart. https://iowadot.gov/iowarail/railroads/maps/Rail_TonnageMap.pdf Are the customers the same on both lines? I doubt it. Is CN seeking IAGN to shut it down or to shut down the CN lines between the points.
Victrola1 Check out the Iowa DOT tonnage map. Compare the CN from Manchester to Cedar Rapids to the Iowa Northern from Waterloo to Cedar Rapids. Also compare the Iowa Northern from Cedar Falls north to the CN north from Waterloo. The lines are not far apart. https://iowadot.gov/iowarail/railroads/maps/Rail_TonnageMap.pdf
Also compare the Iowa Northern from Cedar Falls north to the CN north from Waterloo. The lines are not far apart.
https://iowadot.gov/iowarail/railroads/maps/Rail_TonnageMap.pdf
Are the customers the same on both lines? I doubt it. Is CN seeking IAGN to shut it down or to shut down the CN lines between the points.
Except for Manchester to Cedar Rapids and the Belmond to Forrest City line, I doubt CN will abandon or give up either the old IC or IANR trackage.
IANR has some ethanol plants, a re-load terminal and an intermodal terminal. I don't know if any of the ethanol plants have shipped a unit train, either from by a single plant or going together to build a unit train. Some of the traffic is in conjunction with UP.
The CN line from Cedar Falls to the northwest up towards Minnesota is a wholly owned subsidiary, the Cedar River Railroad. It uses CN equipment but has it's own employees. It's possible that IANR will be operated in the same manner so it may have some autonomy in decision making about such types of traffic. Time will tell.
Victrola1Check out the Iowa DOT tonnage map. Compare the CN from Manchester to Cedar Rapids to the Iowa Northern from Waterloo to Cedar Rapids. Also compare the Iowa Northern from Cedar Falls north to the CN north from Waterloo. The lines are not far apart. https://iowadot.gov/iowarail/railroads/maps/Rail_TonnageMap.pdf
Check out the Iowa DOT tonnage map. Compare the CN from Manchester to Cedar Rapids to the Iowa Northern from Waterloo to Cedar Rapids.
Revenues and profits are way down across the board.. 2023 has been a sufferfest for just about everyone involved in transportation. My guess is that the short lines and regionals weren't spared, and perhaps the few stand alones like IN hurt more than most due to their relatively high fixed cost structure. That there are some like CN who can still go out and buy up properties does portend hope for better days ahead.
According to Iowa DOT's 2018 Rail Traffic Density map the Belmond to Forest City line accounted for only 0.03 million gross tons. Yeah, its probably toast. Perhaps it should be toast. That's only 82 gross tons per day. And for all that little traffic, IANR probably has to pay a cut of the revenue to line owner UP and CPKC for trackage rights to access the line.
Here's an extensive bio I found about Dan Sabin from 2011: https://www.progressiverailroading.com/short_lines_regionals/article/Profile-Dan-Sabin-Iowa-Northern-Railway--28779
Sounds like IANR has had some close calls with its infrastructure funding over the years. At one point they had to sell all the rails and then lease them back. Perhaps its best for the long term viability of the Cedar Rapids-Manly main stem to come under the umbrella of a larger carrier with deeper pockets. I must say, though, that I would prefer it to be G&W or one of the other shortline conglomerates.
jeffhergert If I was a small volume shipper, I'd be worried about getting service. Dan Sabin went after business. I expect his acquiring (I think thru lease, but am not sure) of the Forest City to Belmond line will be given up. I expect that one of the two lines to Cedar Rapids to be given up. I think most likely the old IC from Manchester because the IANR is direct to Waterloo and probably has (for know) more on-line business. We just had discussions on CN and pulpwood business in Wisconsin. A press release said there are 20 on-line elevators. I imagine few can load a unit train. Will CN be willing to form trains from small blocks (10 or 20) of cars? There's a few relatively big fish to interest CN, but I think the small fry will lose out. I always wondered what would happen when Dan Sabin retired. Now we know. Jeff
If I was a small volume shipper, I'd be worried about getting service. Dan Sabin went after business. I expect his acquiring (I think thru lease, but am not sure) of the Forest City to Belmond line will be given up. I expect that one of the two lines to Cedar Rapids to be given up. I think most likely the old IC from Manchester because the IANR is direct to Waterloo and probably has (for know) more on-line business.
I always wondered what would happen when Dan Sabin retired. Now we know.
I personally don't think that CN's secondary mainline from Manchester down to Cedar Rapids is in any danger because (1) there's still a good chunk of traffic that comes from Canada (specifically oats for Quaker Oats) and other eastern origination points that gets re-classified at Kirk Yard that's destined for Cedar Rapids and I don't think CN wants to plug up Waterloo Yard just to shove it all down the IANR. Plus, you've got a wye at Manchester and I don't think CN would want to cut one of its routes out of Cedar Rapids out of the equation. And I don't think that IDOT or STB would be too thrilled with that kind of proposition either - especially when that might translate into higher costs for shippers.
But, like you, I do worry about that segment from Belmond up to Forest City.
To my recollection Dan Sabin also ran CP's Sherbrooke (Quebec) sub back in the 70s..thus, perhaps, the CP inspired paint scheme at Iowa Northern. Like all business owners, Sabin, needed a succession or exit plan..in his case it was to sell the business to another operator. Were there other suitors, i.e G&W, Watco, other class 1s? Maybe..Will CN divest itself of the smaller retail accounts? I doubt it. If those accounts are profitable then keeping them makes sense.
jeffhergertIf I was a small volume shipper, I'd be worried about getting service. Dan Sabin went after business. I expect his acquiring (I think thru lease, but am not sure) of the Forest City to Belmond line will be given up. I expect that one of the two lines to Cedar Rapids to be given up. I think most likely the old IC from Manchester because the IANR is direct to Waterloo and probably has (for know) more on-line business. We just had discussions on CN and pulpwood business in Wisconsin. A press release said there are 20 on-line elevators. I imagine few can load a unit train. Will CN be willing to form trains from small blocks (10 or 20) of cars? There's a few relatively big fish to interest CN, but I think the small fry will lose out. I always wondered what would happen when Dan Sabin retired. Now we know. Jeff
The name Dan Sabin rang some bells in my mind - was involved with him when he was working in Operations Planning for CSX in the early 1980's
To me, the IANR seems to be a fine addition to CN's existing ex-CC&P lines across Iowa. These lines are already solid secondaries that feed well into the rest of the CN network. If CN wants to grow traffic on these lines, why not buy more?
It has been reported in newswire that INAR hauls around 60,000 carloads a year. Not an insignificant amount. There is lots of grain and ethanol traffic, along with a small intermodal/transload facility in Butler, Iowa. (UP was interested in running intermodal trains to/from there a few years ago. I wonder if that service is still around.)
I wonder who else bid? Is one of the reasons why CN bought IANR because they didn't want, say, CPKC to get it? (CPKC doesn't represent an existential threat to CN; however, I think it has motivated CN to proactively expand its network through agreements with other railroads or outright acquisitions.)
For future possible mergers and acquisitions, I'd look at the remaining independent shortline and regional railroads with a decent chunk of traffic.
Somebody on Facebook posted a spoof about them buying the W&LE, so that they can have a connection with the Bessemer. They better not! (From a railfan POV).
Los Angeles Rams Guy Needless to say, there's a lot not to like about this. I was totally taken by surprise by this news late yesterday afternoon because (1) I always thought that if CN were going to make some type of move on the acquisition front, that they'd have bigger fish to fry and (2) I had no idea that IANR owner Dan Sabin had even considered selling. I think it goes without saying that there's going to be considerable opposition from not only us (CPKC) but also - and probably more so - from UP. And there's going to be a lot of shippers that I would think that would oppose this as well. I suspect that we'll hear a lot more about this in the days and weeks to come.
Needless to say, there's a lot not to like about this. I was totally taken by surprise by this news late yesterday afternoon because (1) I always thought that if CN were going to make some type of move on the acquisition front, that they'd have bigger fish to fry and (2) I had no idea that IANR owner Dan Sabin had even considered selling.
I think it goes without saying that there's going to be considerable opposition from not only us (CPKC) but also - and probably more so - from UP. And there's going to be a lot of shippers that I would think that would oppose this as well. I suspect that we'll hear a lot more about this in the days and weeks to come.
The bigger fish are mostly fried at this point. Growing the business by purchasing smaller carriers makes sense... not all bad news. CN is a good carrier with a presence in Iowa already.. this acquisition (subject to regulatory approval) simply adds to their capabilities in the US midwest market.
Montreal-based rail carrier Canadian National on Thursday announced it has bought Iowa Northern Railway, which operates approximately 275 track miles in Iowa.
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