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[quote]QUOTE: Originally posted by kenneo * It is the State that forced the $870 surcharge, because the money is delayed for a few years, and WATCO needs it right now. Explain this. What is going on here??[/quote] I think the WATCO rep was just doing a little lobbying for an expedient cash outlay from the State. To blame the State for the surcharge is borderline ridiculous. Remember though, WATCO is a relatively small company without the benefit of deep pockets. They claim to be losing money on these lines even as they now are relieved of certain debt payments and property tax liabilities. It would have been nice if he could have admitted that the lack of car supply from BNSF was the cause of the twice as high variable cost result of P & L traffic, and he did later acknowledge the difficulties of getting car supply, but he did not (or was not willing) to connect the obvious dots. The more ominous statement was his hint that they would need long term contractual commitments from shippers if they wanted WATCO's business, which is another way of saying "Don't you dare truck your grain down to the river". Of course, no one in their right mind would make such contractual commitments as long as BNSF won't supply cars, and there is no reason to ever think BNSF will start supplying cars as needed. Also, it was pointed out that the average truck haul from the Palouse to Ritzville is twice as long as the average truck haul from the Palouse to the river. The whole point of the State taking over these lines is to "keep trucks off State and County roads" as much as possible, and the Ritzville facility is counterintuitive to that end. [quote]QUOTE: * Everyone at the meeting pretty much agreed that BNSF has no business incentive to supply grain cars to the area shortlines since such could detract from the Ritzville facility. This is a surprise?[/quote] No, but it was nice that the railroad folk at least acknowledge this fact. [quote]QUOTE: ***For the record, a four barge tow on the Columbia-Snake river system carries 14,400 tons, basically a unit train equivolence, and they can run the cycle from Pasco to Kalama and back in under 72 hours if need be, whereas the railroads often take a week or more to recycle the Ritzville shuttle. What was it -- about page 1 or 2 of this thread this very point was expounded upon? The simple example of what is happening here is that the barge line can do with "100 cars" what the railroad can not do with even "300 cars". That's 200 cars that could go to another shipper such as the PCC. [/quote] But..........oh never mind. I was going to say that BNSF gets all the revenue from the Ritzville shuttle cycle, but then again most people at the meeting think BNSF is (or was) actually losing money on that operation, because in order to compete with the barge rates they have to charge a rate that may not cover the variable costs of the shuttle itself, and the Templin LLC oufit is scrambling to make their debt payments on that expensive new facility. At least elevators on the PCC are all paid for, except the Fallon 26 car facility, which is still trying to pay off their debt from 20 years ago. It is ironic that BNSF might be better off transloading at Pasco, which would make the Ritzville shuttle turn one of the shortest corridors in the world, around 75 miles. Then again, they are only competing with truck rates on this segment, and could concievably up their rate on the rail portion and still offer a lower overall rate by the rail/barge combo. But they could never accumulate enough business at Ritzville via shorthaul (local) grain deliveries to justify the over capacity of the facilty, e.g. if they stop at Pasco and up rates to match truck rates, they lose business outside a 25 mile radius of Ritzville, because those guys would then probably truck directly to Pasco. In the end, the Ritzville facility may end up being a big waste of money, not because the concept isn't sound, but the realities of the economies of barging, combined with the growing (and apparently unforeseen when the facililty was planned) rail congestion in the Columbia gorge. It should also be noted that with the dredging of the Snake and Columbia rivers finally occuring, the barge lines may be able to lower rates on grain shipments, which could concievably put the Templins out of business. Nah, on second thought, as long as BNSF is willing to subsidize the rate out of Ritzville with their earnings from Montana grain shippers, the facility will probably stick.
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