This genesis and thesis of this thread is an outgrowth of:
1.) The discussion of the former car-float and other water-borne interchange and delivery to customer methods in the New York City area in the concurrent "PRR- Mis-Application" thread; and,
2.) The observation by RWM in another recent thread (Saint Louis vs. Chicago as a "gateway", etc.) that intermodal interchange in Chicago today is essentially by truck transfer over the streets of Chicago. As most of us know, for regular railcar traffic - both "back in the day" and currently - a lot of that can be accomplished or facilitated by the 2 "belt line" railroads there, the Indiana Harbor Belt, and the Belt Railway of Chicago.
3.) The Houston Belt & Terminal Railway/ Port Terminal Railroad Association's operation there (edblysard, I almost forgot yours !)
What I'm wondering is whether the availability of these common and non-exclusive (= "open access") tools complemented the proprietary nature of the main line long-hauls and so served to optimize the transportation network at these locations, more so than in other "articulation points" without such a well-developed and free interchange capability. Of course, there's a "Which came first - the chicken or the egg ?" aspect to this, as without a large traffic base to start with no one would have cared enough to develop these techniques.
But once these hubs became important, I'm wondering if these "freedom of interchange" or "equal access" methods enhanced the value of the long-haul franchises as well. Once a railroad could reach or connect to water (NYC) or a belt line (Chicago & Houston), that railroad could then reach many other railroads and customers for the "last mile", without being subject to geo-political and competitive blockades from and by other railroads, for competitive domination purposes (or otherwise). Yet, the monopoly value of the long-haul (or other) franchise aspects of all of the railroads to that point would still be preserved, because this limited lowering of those barriers didn't affect the rest of those railroads' lines and points. As such, a "hybrid" model of a mix of exclusive lines and open access terminals may be the best of both worlds for the railroads (certainly the shippers wouldn't object to the open access terminal aspect).
Today, we can see some of this is the comparatively recent (last 10 - 15 years) Los Angeles - Long Beach - Alameda Corridor access arrangements for BNSF and UP, and the ConRail Shared Assets Operation (CSAO) between NS, CSX, and others in the northern NJ "Chemical Coast", Philadelphia, and Detroit areas. (Offhand, though, I can't quickly think of any other significant examples that would either support or refute this thesis - can anyone else ?)
If true, this would mean that the path to financial nirvana and happiness for the Class I's would be to agree to establish an "open access" or competitive "cease fire" cooperation zone at each of their major articulation points. It's a contrarian and counter-intuitive enough approach for me to like it - yes, the path to riches is by giving away what would seem to be a most valuable asset, the restriction of access in the terminal area. Of course, the "terminal" area needs to be defined broadly enough so that this doesn't amount to capitulating and providing a major and only competitior with "open access" to a major shipper and revenue source, unless that is essentially reciprocated. Instead, it would seem to work best where there are many railroads and destination points and the operation is so fragmented that it would be difficult for the individual pieces to work well isolated from each other.
Any thoughts on this, pro or con, or otherwise ?
- Paul North.
Paul, I don't think I am following your premise. Who says that Class 1s do not and did not at any time freely interchange, so long as it does not or did not short-haul themselves?
Also I think there's a conflation in your premise between the "belt line" meant to effect interchange, and the "joint facility" meant to originate or terminate traffic that is not interchanged between the Class I participants. The two are usually exclusive of each other.
There's a second principle at work which may be more important, and that is reciprocal switching. Strong railways with strong positions usually did not participate in reciprocal switching, most famously the PRR. Weak railways in weak positions, which was everyone west of Chicago, usually did. It gets awfully complicated to figure out whether this was a good long-term strategy. It worked for the PRR for about a hundred years. The SP revoked reciprocal switching as a strategy to encourage its acquisition at a premium price, which worked for it, too.
Stepping back to the 100,000-foot range, there's nothing particularly magical about a jointly owned belt railway. It's purpose is not so much to effect interchange between multiple carriers (because the desirability of that is a given), but to do so with less plant than with each carrier having its own trackage to each other carrier, and thus accomplish the goal more cheaply. Note that the belt railway with a substantial amount of industry located upon it is the exception, not the rule. Generally the Class 1s discouraged the location of industry on the belt line because that meant it was open to everyone with ownership in the belt line, and defeated the goal of each Class 1 to enhance the value of its individual franchise. The EJ&E was not a belt railway; it was an extended intraplant railway meant to give USS an initial carrier share of line-haul moves no matter which Class 1 the traffic went to. The Alameda Corridor is also not a belt line, it's a consolidation of multiple high-cost lines to facilities previously accessed by both carriers into one low-cost line; it impartially enhances the transportation efficiency of both carriers while changing the strategic position of neither. The HB&T is a complex, sprawling Alameda Corridor -- it is not a "belt line" that is meant to connect one Class 1 to the other, but also an avoidance of the expense and complication of two Class 1s constructing parallel lines into each major shipper. Sure, there's some overhead interchange that occurs on the HB&T, but that is an accidental convenience not a design.
The question of whether a belt railway existed or not is fairly easily understood when one looks at the articulation point from a high altitude. If all the carriers terminated there, e.g., Chicago or St. Louis, and there were carriers approaching the terminal from multiple directions, there may have been physical advantage to it. If most of the carriers ran through, there was much less reason to have one.
RWM
RWM, I think you're following my premise just fine. I very well may have mixed a couple of concepts together into the same stew - but I'm also seeing aspects of my thought in your response. I've got to go tend to some other things for a while - that highly over-rated "day job" thing, you know - so let me chew on your response and maybe break this down a bit further as you suggest, later on. In the meantime, thanks for the insights, though.
- PDN.
Several things.
First. When Conrail was being formed it was stated that there was no profit in moving traffic within a 40 or so mile limit from New York CIty; rails lost if they were terminating the traffic or cars had to be delivered somewhere other than at an interchange.
Second. Likewise, Class Ones didn't like anything less than trainloads from one terminal to the end terminal. The likes of EL and PC did a lot to get rid of traffic originating/terminating branch lines plus intermeidate or smaller cities and towns lost "local" service as was known up to that time.
Third. The real downfall of float operations in NY was PC not needing it as long as everything could go via Selkirk and the EL had the Poughkeepsie Bridge connection at Maybrook. (Again, when that was lost, PC had a monopoly via Selkirk. Thus the costly and time consuming marine operations could be eliminated and PC go the long haul via Selkirk to the City and Long Island.
Fourth. With Wall Street investors running railroads to push for only the highest profit margin traffic and operations, terminating, originating, and transfer operations were considerd unwanted overhead costs to be eliminated by being sold off or otherwise dealt with via belt lines and switching lines. Short lines took on a new form, too, with large corporations owning many lines.
Just a few comments that come to mind reading your premise, Paul.
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I'm sure that railroads are like most businesses. At our business, we will work with our competitors toward a common interest..........after we've exhausted every other option.
Seems to me, that it would be difficult to say that what you have described increased the value of one franchise over another. Wouldn't the *value* would be the same for all the railroads involved in some sort of switching agreement? All would save money, but the rising tide would raise all the boats?
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding I'm sure that railroads are like most businesses. At our business, we will work with our competitors toward a common interest..........after we've exhausted every other option. Seems to me, that it would be difficult to say that what you have described increased the value of one franchise over another. Wouldn't the *value* would be the same for all the railroads involved in some sort of switching agreement? All would save money, but the rising tide would raise all the boats?
Murph: There are two types of belt lines, one cooperative, the other basically a device to enrich one at the expense of many.
Houston is a cooperative example. This big city that is not the end-point terminus for the two major line-haul railways in the region, SP and MP. There is very large quantities of traffic that originates or terminates here, as opposed to passing through, and relatively little interchange occurs between the line-haul roads. Here the belt line is constructed to reduce the cost to its owning railways of building parallel, redundant tracks to each of the industries, and industries are encouraged to locate onto the belt line
Chicago (prior to deregulation) is a non-cooperative example. This big city that is the end-point terminus for virtually all of its line-haul railways. Much of the traffic passes through the city, from one line-haul carrier to another line-haul carrier. Here a belt line is constructed to reduce the cost of each railway effecting interchange with all the other railways through parallel redundant tracks owned by and operated by the individual railways. Industries are not encouraged to locate onto the belt line.
The non-cooperative example is more interesting. It comes about because a powerful, rich railway like the PRR wants to encourage industries to locate onto its lines only. Ideally the traffic flows are 100% consisting of local (not interline) moves from Industry A captive to one end of its system (say, Chicago) to Receiver B captive to the other end of its system (say, Philadelphia). When all traffic is local, the rich railway need treat with no one and it can engage in measured, predictible, development of its territory that enriches both its territory and itself. It agrees to no reciprocal switching agreements and so keeps its impecunious rivals depressed. Because its rivals have few captive industry-receiver pairs, they are never able to offer the transportation economies of scale or the market reach for their customers unlike the big railway, and their industries are never able to grow as fast or develop as many new receivers. It becomes a self-reinforcing cycle where the rich get richer and the poor stay poor.
This rich railway does participates in a belt line, but only to enable traffic moving from points well outside of its system to enter and depart its system without discrimination among any of its connections. In other words, the rich railway uses the belt line to play all of its connections against each other. Suppose the rich railway has a brass foundry captive to it in Philadelphia. The foundry consumes matte copper. Matte copper isn't produced anywhere on the rich railway's system, but it does come from places such as Butte, Montana, Magna, Utah, and Superior, Arizona, served respectively by NP/GN/MILW, UP/D&RGW, and SP. At Chicago the rich railway does not want any one of these carriers or their forwarding connections to have the only connection to it, because that would enable that carrier to charge a higher rate and protect its copper smelter at the expense of the copper foundry. So by having a belt railway that connects with all the western lines, the rich railway in effect forces all to deal with it on equal terms -- the least advantageous terms to them that is possible -- while the rich railway, by virtue of its sole control of the customer, enables that customer to beat down the price of all the western lines and their smelters because it has source options among them, while they have no advantage over each other. The rich railway gets a disproportionate percentage of the through rate because it has no competition.
Thus, the belt line is not necessarily a "lifts all boats" device. More like a "depresses many of the boats" device. The IHB, for example, owned 60% NYC, 20% C&NW, 20% Milwaukee Road. The NYC is playing the largely parallel C&NW and MILW against each other, and making them "buy in" to the belt line's ownership just to have the privilege to be starved! The BRC, similarly, is owned by PRR and five western carriers. The poor C&O also has a piece, but as it is not a competitor to PRR in the overwhelming preponderance of PRR's territory it advantages the C&O little and disadvantages the PRR not at all. The IHB and BRC are basically NYC's and PRR's respective devices to force the western roads to cut each other's throats on the rates.
A synonymous example was UP Transfer Yard in Council Bluffs, Iowa, where all the Iowa roads terminated and fought for the crumbs that fell from the king's table. Because of the compact geography no belt line was needed, but by design the outcome was identical: every day the UP got richer and the Iowa roads got poorer. Only CB&Q of the Iowa roads was wealthy, and it is not coincidental that CB&Q ran through the terminal to substantial traffic generation locations beyond.
RWM:I never realized the BRC was PRR's Chicago belt railroad. It sure makes sense when looking at the CORA map. NYC flowed directly into the IHB while PRR branched off at 95th street.
Did the size of Clearing Yd vs Blue Island Yd (IHB) reflect the difference of interchange of PRR/western rr's vs NYC/western rr's? Or did NYC simply outgrow Blue Island and then built Elkhart to handle the growing interchange?
What was the role of B&OCT? Was that simply a paper railroad for other purposes?
It is interesting how US Steel simply took matters into their own hands and built the J.
BTW, do you know of a construction which is occuring as we speak in Gary? It is between the Indiana Toll Road and the CSX line. I noticed it this morning...track was being laid, but it was not possible at 55mph and the line of vision to determine from where to where. It might be connecting the former J runner to the South Shore with something.
ed
RWM: You point out that PRR was pretty good at being the 800 # gorilla, as far making the switching situation be whatever was best for PRR. Was it just PRR that did that, or was that the norm for every bigger railroad that had the upper hand over a smaller road? The Northern Lines verses the Milwaukee Road, for example.
Murphy Siding RWM: You point out that PRR was pretty good at being the 800 # gorilla, as far making the switching situation be whatever was best for PRR. Was it just PRR that did that, or was that the norm for every bigger railroad that had the upper hand over a smaller road? The Northern Lines verses the Milwaukee Road, for example.
Well ... weak roads always struggled. But no one enjoyed a level of dominance like the PRR did.
MP173RWM:I never realized the BRC was PRR's Chicago belt railroad. It sure makes sense when looking at the CORA map. NYC flowed directly into the IHB while PRR branched off at 95th street. Did the size of Clearing Yd vs Blue Island Yd (IHB) reflect the difference of interchange of PRR/western rr's vs NYC/western rr's? Or did NYC simply outgrow Blue Island and then built Elkhart to handle the growing interchange? What was the role of B&OCT? Was that simply a paper railroad for other purposes? It is interesting how US Steel simply took matters into their own hands and built the J. BTW, do you know of a construction which is occuring as we speak in Gary? It is between the Indiana Toll Road and the CSX line. I noticed it this morning...track was being laid, but it was not possible at 55mph and the line of vision to determine from where to where. It might be connecting the former J runner to the South Shore with something. ed
Remember that the J was built not to be a belt railroad, but only to make sure that USS was an originating carrier no matter where its carloads went. In effect, the connecting roads we're hauling USS Chicago District steel for less money than they were hauling anyone else's Chicago District steel -- which meant that USS's competitors were in effect subsidizing USS. Ugly, huh?
That the J looked on the map like a belt was only because of geographic idiosyncracy. It did not operate as a belt line.
I'm pretty much helpless to answer your other questions, perhaps Jay or Ken can do so.
RWM:Hang with me on this one.
US Steel looked at the EJE as an investment. Other steel companies could have (yes, I know could have is a very big COULD HAVE) built similar investments but did not. Someone was going to split that thru rate from Gary, Indiana to ________(fill in the blank). EJE no doubt received a high proportion of that rate, but that is factored in on the interline splits, based on high expenses for originating/terminating carloads.
The other steel companies, in my opinion, were not subsidizing US Steel. That rate would have been paid. The fact that US Steel invested in a railroad, entitled them to the earnings of that carload of steel (or coal, coke, etc). With the investment came the risk and the rewards, or lack of.
I do not know what percentage of the entire steel cost that transportation was. But, with the efficiencies that US Steel developed over the years in its logistics and that EJE participated in, it was probably significant. But, remember too that when US Steel closed down the South Chicago Works, there was an investment in the EJE which did not return the same yields. So, it would have cut both ways.
Whether or not by design, EJE became a very desired railroad for inbound coal for the electrical producers in Chicago/NW Indiana. I doubt if it were by coincidence. ComEd and others probably figured it out that it was much better to have a shortline or regional connect with the line haul carriers in order to keep the rates open to negotiation.
Ed:
Look at it this way.
In the regulated era, a carload of steel moving on a commodity rate from a Chicago District mill to any point paid the same rate to get to that point regardless of which Chicago District mill originated the car and which route the car took. Suppose the rate was $1000 to Council Bluffs for 50 tons of wide-flange beams. Suppose the steel could originate at Wisconsin Steel, and move single-line on Rock Island from Deering to Council Bluffs. Or, suppose a carload of identical steel could originate at Gary and move EJ&E-Rock Island to Council Bluffs via Joliet. As originating carrier, EJ&E would be entitled to about $150 of the $1,000 move. But did EJ&E provide $150 worth of value? Not hardly. More like $70 of cost to switch the mill, assemble the car into a train, and move the car about 20 miles. The other $80 was profit to EJ&E, less its cost to build the railway, which, amortized over every carload of steel moved over 50 years, was a couple of pennies. Thus for every $1000 worth of steel USS sold FOB customer's dock, its real sales price was $1080 to USS while its Chicago competitors such as Wisconsin Steel or J&L realized only $1000 for the same product delivered FOB the same customer's dock.
In effect, what USS did by building the J was an legal end-around on the rebate practices rendered illegal by the ICC Act and the Hepburn Act.
As for the railroads, they needed a certain income to pay their bills and have something for their owners at the end of the day. So they had to set their overall rates to accomplish that. But now we have a customer who is contributing less to that revenue stream than other customers shipping the same commodity in the same equipment to the same places. Thus one class of customers is contributing disproportionately more to the railroad's net income than one of their competitors. If that isn't a subsidy by USS's competitors of USS's freight bills, what is it?
Sure, USS took the "risk" of building the J, though the risk was that (1) the ICC wouldn't force severance of the J or force it to take only a handling charge instead of an interline rate, thus wiping out the unearned profit, and (2) that the steel mill enterprise itself wouldn't fail. And, yes, the other steel mills could have partaken of the same practice but they didn't have the volume to develop similar quantity of traffic to force the same interline settlement agreement. It's important to note that most steelmakers built a common-carrier switching carrier to originate and terminate their carloads to create a legal de facto rebate on their traffic. Only USS had the volume to do so on such a vast scale, however.
The J was never a belt railway of any consequence until very recently. The J actively discouraged belt traffic because it did not want it. With the advent of demand for western coal east of Chicago, and because there simply was no room whatsoever on the Belt and Harbor to take the unit coal from the western carriers around Chicago, the J agreed to be a belt line (of a sort) for an exorbitant price. The western carriers paid dearly including paying the J for the new and repaired sidings, connection tracks, and main track it took to accommodate the coal trains. That new role for the J was not by design but a lucky happenstance.
As for the J keeping the western carriers honest for the benefit of ComEd -- no way. The J was only a handling line carrier in the coal moves, not an interline carrier. The J didn't care which line the coal came to Chicago on; it was going to charge the same high price either way. The J did not participate in the contract negotiations between the utilities and the line-haul carriers, and why should it? That would just slice its own throat. It quoted identical high rates to all comers, knowing that it was a bottleneck whose price would be paid. As far as I know there is only one coal utility that is semi-captive to the J, Midwest Generation. It's Will County, Joliet, Fisk, and Crawford plants were originally designed to receive coal from southern Illinois via barge. Now the Joliet and Will County plants receive PRB coal by rail, and Will County transfers inbound coal arriving by rail to barges that travel a short distance to supply Fisk and Crawford.
I always wondered how Fisk received it's coal. Thanks for the info.
Interesting regarding the J's handling of PRB coal. It appears the J really used their "pricing power" on several fronts.
Regarding the J/USS relationship...
1. I am a little surprized the J's portion of the rate to Council Bluffs would have been $150. Perhaps that is an estimate on your behalf, I would have thought it to be a little more. The LTL interline settlements were based on established railroad rates (from long ago). Say a shipment moved from Gary to Council Bluffs over Chicago. One would look up in the book the factor for Gary/Chicago and then Chicago/Council Bluffs. It usually favored the short haul, based on the building of rates. Typically such an LTL movement would have been about 20-22% for the short haul. Perhaps I am splitting hairs here.
2. I look at what USS did as vertical intergration of their business. Not much different than purchasing a coal mine or ore deposits. They certain took the "captive shipper" issue in their own hands.
3. Do you know what the rail construction is in Gary now? It doesnt appear to be a big project.
I'm just taking a guess at the split. But regardless, the interline portion for a rail originating carrier during the regulated era was generous to the originating carrier, to say the least.
You could look at the J, or the DM&IR, or any of the steel-mill roads, as vertical integration. But typically vertical integration only affects the business model of the integrator, lowering its costs independently of any effects on any other competitor or any other business. If a coal mine produces all my coal for my steel mill, and one day I buy the coal mine, that doesn't necessarily make the cost of coal at all the other mines go up, because each of those coal mines has independent utility. Whereas in this case, the vertical integration had an effect on the business model of all other shippers and raised their costs, because rail shipments do not have independent utility. If I buy the switching railway that serves my mill, and use the law to force all the line-haul roads to give me a portion of the through rate, that does necessarily make the cost of shipping for all the other shippers go up. (I've also created redundant railway plant and jobs, too.) This law was meant to protect rural communities served by a single short line that had no other transportation choice. It wasn't meant to protect steel mills that could have five Class 1s fight for their business.
What I'm trying to get across is that during the regulated era there was much more incentive for a rail shipper to own a rail line than simply to gain control over its switching and the managerial efficiencies of vertical integration. That was all well and good, but when you owned your originating carrier, you got additional wealth, too. In other words, you're underestimating the business acumen of Judge Gary.
From an economic efficiency point of view, the steel mill railway was pretty ugly. It's primary purpose was not to create operational efficiencies (and it actually was operationally inefficient) but to create a reduction of rail rates for its owner that reflected not any reduction of costs (quite the contrary!) but a shortcoming in the law. And of course, the moment railways were deregulated, this purpose evaporated. Most have been sold off to third-party operators and are now handling-line carriers with no intraline rates, and a great deal of redundant physical plant has been eliminated.
As far as what's going on in Gary, I'd have to go call someone. Where specifically is it and what does it appear to be doing?
Just popping in to say that I appreciate how all of you have kept this discussion going with the questions and examples while I've been busy elsewhere - although not quite where I intended (I didn't submit the EJ&E as an example of a belt line because I never thought of it as one - but that's OK anyway). It's all pretty dense thought to me, but the places where I do most of my deep thinking - in the shower and while driving - don't lend themselves to reading from either a computer or a print-out. So I haven't abandoned the thread - you're just getting ahead of my ability to keep up and respond. So keep going anyway. Thanks.
P.S. - Murphy was concerned that my use of "Open Acess" in the caption of the Original Post would lead to the oft-seen "flame war" over that topic here. Glad to see that it hasn't (so far) - so I don't owe him the proverbial "cold one" for that (although maybe for some others . . . ). - PDN.
One minor point to be raised here: How did you consider BRC to be PRR's belt line in the Chicago area other than by analogy to IHB and NYC? NYC was a majority owner of IHB, PRR only had a 1/12 interest in BRC. Also, BRC was an outgrowth of the Chicago & Western Indiana, a terminal railroad for C&EI, WAB, MON, Erie and GTW. In fact, until 1962, BRC leased its lines from CWI. BRC had a fair number of industrial customers on its own lines, mostly adjacent to Clearing Yard and in the South Chicago area.
RWM:So the deregulation pretty much closed the loophole for USS and the J. Did they (until earlier this year) charge USS for their freight portion? They have a daily train that is interchanged with the NS at Van Loon. The NS runs empties to the J and they exchange cars around 2pm daily. The train can have 70 cars of steel and I have heard it with less than 10. Tightly scheduled operation. I am very curious how it will now operated with the CN owning the line to Van Loon.
Regarding the construction in Gary...
Just east of downtown Gary there is an EJE track which is between the Indiana Toll Road and theCSX tracks. This line runs under the toll road and interchanges to the South Shore. It is primarily used for interchange of NIPSCO coal trains off of the UP and usually has UP power. There is a track which seems to be running from the J, angling parallel with the CSX then turning south, as if to cross the J.
It was difficult for me to see, as I was on the toll road and it showed up quickly. Perhaps I will return and go down and check it out.
I am just curious if this has anything to do with the CN purchase of the J, either by the CN or the surviving carrier.
CSSHEGEWISCHOne minor point to be raised here: How did you consider BRC to be PRR's belt line in the Chicago area other than by analogy to IHB and NYC? NYC was a majority owner of IHB, PRR only had a 1/12 interest in BRC. Also, BRC was an outgrowth of the Chicago & Western Indiana, a terminal railroad for C&EI, WAB, MON, Erie and GTW. In fact, until 1962, BRC leased its lines from CWI. BRC had a fair number of industrial customers on its own lines, mostly adjacent to Clearing Yard and in the South Chicago area.
That's the problem with railways and categories, they never fit neatly. And you'd be correct in saying that as a defense of the points I brought up previously, that's a weak one. The point I'm trying to make, if I can restate it, is that belt lines were usually not conceived as a "cooperative venture" among railways in the sense that "if we all play nicely together we all are the better off for it." Railways never play nicely together if they can help it. Instead, belt lines were conceived as:
No belt line fits any one definition perfectly, they're all blurred to greater or lesser degree. The only value to coming up with categories is to try and bring rank and order to phenomena and historic events. Categories are like a road map -- at 1:1 scale it's 100% accurate but completely useless; at 1:100,000 scale it's quite inaccurate but now is at least small enough to fit into your glovebox. So long as we understand the limitations of the categories they may be useful.
MP173RWM:So the deregulation pretty much closed the loophole for USS and the J. Did they (until earlier this year) charge USS for their freight portion?
RWM:So the deregulation pretty much closed the loophole for USS and the J. Did they (until earlier this year) charge USS for their freight portion?
Of course. They always did. But rates might have been excessively high when the J was owned by USS. When you're vertically integrated, it matters not which pocket you put your profit into, but it matters a great deal if anyone else is paying into that pocket at the same time.
Railway Man [snips] The only value to coming up with categories is to try and bring rank and order to phenomena and historic events. Categories are like a road map -- at 1:1 scale it's 100% accurate but completely useless; at 1:100,000 scale it's quite inaccurate but now is at least small enough to fit into your glovebox. So long as we understand the limitations of the categories they may be useful. RWM
[emphasis added - PDN.]
Wow - a key principle of analysis that is well and succintly said, and not always fully appreciated and understood. It has application to many fields of study, situations, and people - not all of them here. Thanks much (as always !) for that formulation.
A little side note to this...
HB&T has been gone for 10+ years now.
Divided by the last two owners, UP and BNSF, its real purpose was no longer necessary.
And please don't confuse the HB&T and the PTRA, they are two completely different animals.
Back in the day, when you said railroad in Houston, you meant one of two, either the SP, or the any of the other guys....SP just about owned this town.
The HB&T was formed by 4 roads in an attempt to gain some inroads into Houston...and it formed a real belt around Houston, just follow Loop 610 on a map and you pretty much have the route.
As pointed out by RWM, Houston is one of those places that both originate and receive a lot of rail traffic, and it is also a bridge route for through movements.
SP had its Western Division Headquarters here.
So you either dealt with the SP, or the HB&T...the Katy was here also, but only in a small interchange capacity and as a passenger carrier.
As RWM points out, belt lines are often an attempt by a big strong road to keep weaker competition out, or the opposite, an attempt by weaker roads to gain access...the HB&T is one of the latter.
The HB&T hauled everything...from reefers and boxcars out to Groceries Row to pipe and oil riggings out to the Baytown refineries...petroleum products from there went out on its owner's lines, but in no where near the volume the SP moved.
Santa Fe, the MoPac, (as IGN) and the Rock, along with the CB&Q, (latter as BN) were pretty much at SPs mercy, they could get into the city, but had to hand the traffic off to SP, or use the HB&T as a way around the SP.
By bringing trains into Settegast, New South Yard and Old South Yard, then using the Belt and the PTRA, they gained access to customers along the ship channel, and through out the city.
Of course, the heavy industry moved away from the downtown area and outside the loop, and customers on the Belt dwindled, to the point there was no longer any financial reason for the last two owners, Santa Fe and IGN (MOPac or UP) to keep it running...the last transfer run they made to us was 4 cars, and as part of the SP UP merger, dividing the remaining track and yards up between the BNSF and UP removed the HB&T from everything but the old maps.
In a round about way, UP finally got as much of the traffic as it wanted...BNSF has New and Old South Yards, UP got Englewood and Settegast, and you can pretty much slice the city along a north east to southwest line, everything north of the line is UP, the rest is BNSF.
The PTRA survives because we are a terminal road, the Class 1s bring the work to us, and we do all the "ground" work, from switching out the trains to working the industries along the channel, and because we are a neutral Association as opposed to an owned belt line, we can offer our customers the choice to receive from or ship out on any of our member lines...again, as RWM pointed out, for our member lines to each build tracks into the channel area would be impossible, the real estate is simply not there, and the cost, even back in 1924 when the PTRA was formed, would be outrageous.
Even the mighty SP had to deal with us for access to the major petrochemical producers along the ship channel...
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Ed -
That's no mere "side note" - instead, that's a major contribution to the discussion with some well-described observations and history. I don't even mind that I didn't have the HB&T part quite right, because in clearing that up you also added some more to the general understanding (or at least mine), as I hoped you would.
Thanks much !
Paul_D_North_Jr (Offhand, though, I can't quickly think of any other significant examples that would either support or refute this thesis - can anyone else ? - Paul North.
(Offhand, though, I can't quickly think of any other significant examples that would either support or refute this thesis - can anyone else ?
How about Illinois Terminal, during the last part of it's existence?
I am reading James Lewnard's excellent Monon, In Color. This is the 2nd "In Color" book I have read and it is a very interesting format with very extended captians which give a very detailed overview of operations. The books seem to be organized by division and mileposts, so you literally have a tour of the facilities.
Anyway, the Monon utilized three belt type carriers in their terminal operations (perhaps four as I havent reached Indy yet)...Chicago and Western Indiana and the BRC in Chicago and the Kentucky and Indiana Terminal in Louisville.
K&IT seems very interesting in that their main asset was the bridge spanning the Ohio River. Granted they had other assets, such as Youngstown Yard, but without the bridge, would they have existed?
With the mergers of member lines - Monon and B&O into Family Lines (with L&N) there was no need for the belt line to remain in joint ownership and Southern purchased it for $30million in 1981.
Does this occur often in the belt type operations, particularly east or west of the Mississippi River/Chicago terminal cities? At those points, ownership would be between existing carriers (western and eastern railroads), but at other points ownership could dissolve due to mergers? Are there other examples of this?
As mentioned above by Ed, Houston Belt & Terminal was dissolved for just that reason. Chicago & Western Indiana was abandoned in part and other parts were sold to Metra, UP and NS.
Wasn't C&WI just a track facility connecting C&O, ERIE, MONON to Chicago Terminals and not an operating entity as such?
henry6 Wasn't C&WI just a track facility connecting C&O, ERIE, MONON to Chicago Terminals and not an operating entity as such?
It certainly was an operating entity. After WW2 it used Alco RS1's to switch the passenger trains of its owners at Dearborn station. In fact it even operated a commuter train. Sante Fe, as a tenant, did it's own switching.
Railway Man MP173 RWM:I never realized the BRC was PRR's Chicago belt railroad. It sure makes sense when looking at the CORA map. NYC flowed directly into the IHB while PRR branched off at 95th street. Did the size of Clearing Yd vs Blue Island Yd (IHB) reflect the difference of interchange of PRR/western rr's vs NYC/western rr's? Or did NYC simply outgrow Blue Island and then built Elkhart to handle the growing interchange? What was the role of B&OCT? Was that simply a paper railroad for other purposes? It is interesting how US Steel simply took matters into their own hands and built the J. BTW, do you know of a construction which is occuring as we speak in Gary? It is between the Indiana Toll Road and the CSX line. I noticed it this morning...track was being laid, but it was not possible at 55mph and the line of vision to determine from where to where. It might be connecting the former J runner to the South Shore with something. ed Remember that the J was built not to be a belt railroad, but only to make sure that USS was an originating carrier no matter where its carloads went. In effect, the connecting roads we're hauling USS Chicago District steel for less money than they were hauling anyone else's Chicago District steel -- which meant that USS's competitors were in effect subsidizing USS. Ugly, huh? That the J looked on the map like a belt was only because of geographic idiosyncracy. It did not operate as a belt line. I'm pretty much helpless to answer your other questions, perhaps Jay or Ken can do so. RWM
MP173 RWM:I never realized the BRC was PRR's Chicago belt railroad. It sure makes sense when looking at the CORA map. NYC flowed directly into the IHB while PRR branched off at 95th street. Did the size of Clearing Yd vs Blue Island Yd (IHB) reflect the difference of interchange of PRR/western rr's vs NYC/western rr's? Or did NYC simply outgrow Blue Island and then built Elkhart to handle the growing interchange? What was the role of B&OCT? Was that simply a paper railroad for other purposes? It is interesting how US Steel simply took matters into their own hands and built the J. BTW, do you know of a construction which is occuring as we speak in Gary? It is between the Indiana Toll Road and the CSX line. I noticed it this morning...track was being laid, but it was not possible at 55mph and the line of vision to determine from where to where. It might be connecting the former J runner to the South Shore with something. ed
Actually, the EJ&E was built to be a belt railway -- witness its tag line, "Chicago Outer Belt." The idea was that shippers could route shipments passing through, but not originating or terminating in the Chicago Switching District, around the the District and not get hung up therein in transit for days on end. In this, the J was strategically as well plugged-in as one could imagine, because it interchanged with every trunk line railroad that entered Chicago -- plus all the other switching roads.
The J extended its lines into the steel producing district along the southern end of Lake Michigan after it had become a belt -- in 1894, to be exact. A few years afterwards, when JP Morgan et al founded US Steel, the J was acquired and tossed, and not so casually, into the collection of companies that would collectively become US Steel. And it did get 100 percent of inbound and outbound shipments into all USS mills in and around Chicago, but the two biggies were clearly Gary and South Works.
Despite the obvious focus of its new owner, for the next 70 years, the J actually remained in the overhead business, handling carload traffic around -- not through -- the Chicago Switching District. By the early to mid-1970s, with the advent of consolidations and, one suspects, the rise of piggyback traffic, which had to have diverted much carload traffic to intermodal ramps, overhead volumes began to drop precipitously, along with profits, and J management made a conscious, dollars-and-cents decision to drop out of the business. Accordingly, J salesmen began the tedious task of de-soliciting shippers who favored a J routing, and, in effect, de-marketing the Outer Belt. By oh, 1975 or so, this task was substantially complete. However, the J still ooked like a belt because it was built to be a belt, for a long time was a belt, not a mere idiosyncracy. Nor did "the Corporation" build the J; it acquired the property.
The J's original management saw a gold mine when they expanded the property into ALL the steel mills then ringing the southern Lake Michigan shoreline (Bethlehem would construct its Burns Harbor Mill in the early to mid-1960s, much later, outside the reach of the J). So when US Steel acquired the J it also purchased the right to serve its competitors. Collectively, they knew very well who owned the J (I'm thinking principally of Inland, J&L and Republic, the latter two would combine into LTV), even though they also ALL received switching service from the Indiana Harbor Belt. The Harbor, incidently, was for decades owned 60 percent by New Your Central and 20 percent each by CNW and MILW. The statement that "the connecting roads...[by which I assume is meant not the terminal switching roads but the trunk lines]...we're [sic] hauling USS Chicago District Steel for less money than they were hauling anybody else's..." ignores the fact that they [the connecting roads] still had to pay the origin/terminating division to whomever of the two switching line got into the others' mills -- they had to pay the Harbor or the J. If you paid the Harbor, 60 percent of any positive margin went to NYC (later PC/Conrail) -- which conveniently passed by mills anyway. So in paying for the right to haul steel products to and from Chicago District mills, you either paid a "switching toll" to either USS or NYC -- take your pick. In either case, the tolls were equal -- if they weren't, either the railroads or the mills would have a strong economic incentive to solicit the "other carrier" or a USS competitor. Moreover, Chicago District mills used "base point pricing" to equalize the price of steel products FOB mill of origin, meaning the price of a ton of a given steel product being shipped to, say, Buffalo was the same, regardless of whether it originated from USS or Inland. so there was no wiggle room for originating mills to absorb extra switching charges. From the foregoing, I fail to see how the connecting roads (except maybe NYC) were hauling steel "for less money" than for Steel's competitors, and I scarcely think USS got rich by bleeding its competitors with switching charges. If any railroad had cause to foam in anger over this, one might think it would be PRR, which had to pay its archrival NYC to haul Chicago District steel if it didn't pay USS. Whether it was at all mollified by the fact that all competing trunklines also had to pay one of these two pipers is not recorded anywhere I've seen. Finally, why (in the 1970s) did the non-USS mills commit more than half of their outbound product to the J? Because the J provided much better service!
So were USS competitors subsidizing USS? Not by much, I'd wager. And if they were, then the benefits of vertical integration are great, but hardly ugly. Incidently, as a J fan, I'm delighted that CN plans to use the J for the purpose for which it was originally intended -- as an outer beltline.
Incidentally, I never realized the BRC was the PRR's Belt -- at least, not in the sense that PRR owned it. The Belt's original ownership consisted of five roads -- L&N, Erie, C&EI, Wabash, and Grand Trunk. This was circa 1882-84, well before the turn of the twentieth century. Later (1912), the Belt expanded and seven more roads entered into ownership -- Soo Line, ATSF, CB&Q, , IC, the Rock, PRR and C&O. Still later (1924), the Pere Marquette took a seat at the table. Each property owned an equal share -- one/thirteenth -- of the Belt. Years ago, as a trainee, I recall looking up ownership of the BRC in Moody's, and discovering Belt ownership by the thirteen.
One can see that of its owners, PRR probably poured a lot more traffic onto the Belt than any other, and unquestionably, among Belt owners, PRR was the 800-pound gorilla, but at BRC managerial councils that muct have occasionally taken place through proxy, its vote counted no more than CE&I's. And less than C&O, which after its control of Pere Marquette controlled twice as much of the belt as PRR or any other owner.
Minor correction on BRC ownership, C&O did not become an owner of BRC until it absorbed the Pere Marquette so it did not have two shares in BRC ownership. On the other hand, L&N became the thirteenth owner of BRC when C&EI was divided between MP and L&N, all owners had an equal share (1/13) until L&N absorbed Monon and its share in BRC, giving L&N a 2/13 share in BRC.
Thanks for the update, CSS Hegewisch, once the locale for US Steel Supply and scene of the famous -- or infamous -- "Hegewisch Headcount."
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