OK, I don't know when the UP decided that they needed to get into Chicago. But I do know that they took action on the issue when I was 12, and IIRC was in the 7th grade. They decided the line they wanted was the Rock Island.
The stupid government regulators at the ICC finally issued a decision allowing the UP to acquire the CRI&P line when I was in grad school. In the time it took for the ICC to even reach a decision I personally graduated Jr. High, High School, the University of Illinois, did two years in the Army, and was back in college.
By then the Rock Island had deteriorated to the point where the UP didn't want it. It was all a very bad joke. When the RI folded the other railroads in Chicago were "encouraged" by the government to hire their displaced employees. We picked up a few. We had our own problems. God knows what happened to the rest of them.
MichaelSol wrote: MILW might have considered one option -- the sale of its Omaha line to Union Pacific.
MILW might have considered one option -- the sale of its Omaha line to Union Pacific.
(slightly OT) That's another intesting point to ponder. Perhaps Milwaukee could have made a "trade" with UP to the betterment of both roads - UP gets Milwaukee's Omaha to Chicago line (either via trackage rights or outright purchase), and in return the Milwaukee gets overhead rights into Portland via the "Washy" and the Gorge lines.
Wouldn't that have been a fair trade?
Was the Union Pacific better off using standard financial indicators after it reached Chicago?
If I presume correctly that UP wasn't necessarily better off after the CNW takeover, are you then suggesting UP had it better with multiple connection options into Chicago, e.g. the ability to play one against the other to keep costs down?
futuremodal wrote: (slightly OT) That's another intesting point to ponder. Perhaps Milwaukee could have made a "trade" with UP to the betterment of both roads - UP gets Milwaukee's Omaha to Chicago line (either via trackage rights or outright purchase), and in return the Milwaukee gets overhead rights into Portland via the "Washy" and the Gorge lines.Wouldn't that have been a fair trade?
Well, I don't think UP was in it to play fair, but one way around the log-jam would have been for MILW and Rock Island to spin off their Omaha lines into a Joint Venture with Union Pacific. UP receives a degree of control, and 1) the Rock Island and Milwaukee lines are set for consolidation into a unified operation, 2) costs go down, 3) efficiency goes up, 4) the Joint Venture provides access to liquidity for MILW and RI because instead of "a line" they have instead marketeable stock certificates.
If you want to play with the concept a little, propose a "Midwest Joint Operating Authority." It operates the trains within its authority district, whether they be UP, MILW, or RI. It operates any train delivered to it. Illinois Central and others could still maintain Omaha access through the authority, and abandon its money-losing line -- simply pay the MJOA to operate its trains into Omaha over MJOA trackage. UP maintains its "connections" and the "connections" cut their costs substantially -- and share the profits. Gosh, this almost sounds like ...
MichaelSol wrote: MP173 wrote: I believe in the mid 50's UP changed routings on the trains from CNW to MILW. Ok...that tells me they CONTROLLED the trains from Omaha to Chicago. Were there ICC hearings to change the routing or did UP have control to do so? I sort of compare it to contract carrier vs common carrier in trucking. CNW carried the UP passenger trains under a contract into Chicago. That wasn't an ICC matter as the ICC couldn't order UP to provide passenger service over another railroad. The trains were encountering increasing problems over CNW. Repeated threats by UP were unavailing. UP approached MILW to see if MILW was interested in the contract. MILW said sure, spent some money upgrading the line and on October 30, 1955, began operating the Cities trains between Omaha and Chicago. The advantages for the Milwaukee was that it got all of the pro-rated passenger revenue over the distance, it permitted some cost cutting through consolidation of some of its own trains with UP trains, and permitted continued utilization through per diem, of equipment coming off of discontinued MILW passenger trains elsewhere. Indeed, MILW was able to offer transcontinental service over UP to Tacoma and Seattle -- where UP and MILW already jointly operated the passenger station -- justifying its efforts to abandon its own expensive long haul passenger fleet to those cities. About $4 million in extra revenue for MILW. UP got better service and schedules for its flagship fleet, a reliable operator, and MILW was able to avoid writedowns on a good deal of equipment that might otherwise have been scrapped.
MP173 wrote: I believe in the mid 50's UP changed routings on the trains from CNW to MILW. Ok...that tells me they CONTROLLED the trains from Omaha to Chicago. Were there ICC hearings to change the routing or did UP have control to do so? I sort of compare it to contract carrier vs common carrier in trucking.
I believe in the mid 50's UP changed routings on the trains from CNW to MILW. Ok...that tells me they CONTROLLED the trains from Omaha to Chicago. Were there ICC hearings to change the routing or did UP have control to do so? I sort of compare it to contract carrier vs common carrier in trucking.
CNW carried the UP passenger trains under a contract into Chicago. That wasn't an ICC matter as the ICC couldn't order UP to provide passenger service over another railroad. The trains were encountering increasing problems over CNW. Repeated threats by UP were unavailing. UP approached MILW to see if MILW was interested in the contract. MILW said sure, spent some money upgrading the line and on October 30, 1955, began operating the Cities trains between Omaha and Chicago.
The advantages for the Milwaukee was that it got all of the pro-rated passenger revenue over the distance, it permitted some cost cutting through consolidation of some of its own trains with UP trains, and permitted continued utilization through per diem, of equipment coming off of discontinued MILW passenger trains elsewhere. Indeed, MILW was able to offer transcontinental service over UP to Tacoma and Seattle -- where UP and MILW already jointly operated the passenger station -- justifying its efforts to abandon its own expensive long haul passenger fleet to those cities. About $4 million in extra revenue for MILW. UP got better service and schedules for its flagship fleet, a reliable operator, and MILW was able to avoid writedowns on a good deal of equipment that might otherwise have been scrapped.
How does this jive with your earlier thesis of competition between MILW and UP?
gabe wrote: How does this jive with your earlier thesis of competition between MILW and UP?
It probably wasn't clear -- they didn't compete on passenger services. They competed on freight traffic.
And ... what were UP's options on this one?
MichaelSol wrote: Gosh, this almost sounds like ...
...FarmRail, the 1978 Rock Island proposal of itself, certain CMSP&P lines, ICG's corn lines, and perhaps MKT and/or KCS ?
nanaimo73 wrote: MichaelSol wrote: Gosh, this almost sounds like ... ...FarmRail, the 1978 Rock Island proposal of itself, certain CMSP&P lines, ICG's corn lines, and perhaps MKT and/or KCS ?
By the mid 70's, perhaps a year or two earlier, it should have became obvious to MILW that the Omaha line was absolutely nothing to them. The UPRock merger was dead and by then CNW was beginning to ramp up as the Falcons and other trains began to take off. At that time, it certainly should have considered the option for selling the Omaha line to UP.
The timing was there. Coal was still a few years away for CNW. They were dependent on UP for survival, the Fremont connect was their life line. A sale of the Omaha line to UP (by MILW) would have completely changed the landscape of western railroading. First of all, UP would have had access to Chicago and the lifeline to CNW would have disappeared. Thus, the ability to leverage their coal would have been reduced. CNWwould have probably dried up and gone away.
The more I think about it, the failure of MILW to sell their line, or perhaps to consider selling it, sealed their doom a few years later. As has been previously discussed, MILW seemed to be much too concerned with the Midwestern lines rather than the entire big picture.
Michael, the comment about the ICC examiner stating UP needed 5 lines to reach Chicago had to be one of the most ridiculous statements ever made. As you previously stated, roughly 700 cars per day were interchanged going east. That is 7 to 10 trains daily.
Finally, is there a source of the Western Mergers study on line anywhere? Would make good reading.
ed
MP173 wrote: By the mid 70's, perhaps The more I think about it, the failure of MILW to sell their line, or perhaps to consider selling it, sealed their doom a few years later. As has been previously discussed, MILW seemed to be much too concerned with the Midwestern lines rather than the entire big picture.
By the mid 70's, perhaps The more I think about it, the failure of MILW to sell their line, or perhaps to consider selling it, sealed their doom a few years later. As has been previously discussed, MILW seemed to be much too concerned with the Midwestern lines rather than the entire big picture.
This may overstate the importance of the Omaha Gateway to Milwaukee Road.
In 1965, MILW interchanged 111,742 cars at Council Bluffs. But MILW's bigger Gateway was 115,400 carloads at Kansas City.
Comparing Train #262 blocks with a discussion with a UP Traffic Officer, I was surprised to learn that MILW #262 eastbound from Portland/Seattle had a KC block amounting to about 25% of each train. MILW had a faster time to Kansas City from the PNW than either UP or BN. Stuff you can't see on a map, and can't know without knowledgeable people comparing notes.
Tonnage through both Council Bluffs and Kansas City was replaced to some extent by Milwaukee's longer hauls obtained at its Louisville Gateway -- 49,000 carloads, and through Portland -- traffic going over MILW's long haul transcon rather than through Council Bluffs -- 31,500 carloads.
By 1977, MILW's share of Omaha traffic was down to 62,000 carloads -- but if it was carrying most of that loss out of Portland for the long haul, it was a huge net gain from a revenue perspective. Yes, MILW lost short haul traffic at Omaha -- traffic it had picked up long haul in Portland. There is some evidence that MILW had picked up UP traffic at Tacoma and Seattle as well. It may be that MILW lost no traffic -- it simply traded the short haul for the long haul. And this was something that CNW had no options for.
At Kansas City, MILW handled 85,000 carloads in 1977, but at $625/carload -- substantially more than the typical CNW revenue share of traffic at Omaha -- a revenue equivalent to Omaha of 110,000 carloads. I understand, but do not have numbers for, that when MILW closed its Omaha Gateway in 1980 or so, that traffic was routed through Kansas City. MILW didn't "lose" Omaha, MILW closed out UP at Omaha and required the traffic to go through Kansas City.
MILW was looking to an efficiency increase, and whether the final Gateway was callled Omaha or Kansas City depended, I believe, on traffic that would be lost at Kansas City if Kansas City was closed. There wasn't much loss if Omaha was closed -- from a traffic perspective, the Milwaukee's Omaha line didn't cease -- it was simply consolidated elsewhere. Another option CNW did not have in that instance.
So, let me get this straight. Appx 25% of the EB traffic out of PNW was then turned at Bensenville and taken to Kansas City for interchange.
Who did most of that traffic go to? Frisco? That 25% would amount to about 10,000 carloads per year. What was the typical carload revenue from PNW to Kansas City, as compared to Chicago? It would have to be less per carload to KC than Chicago, with considerable more handling.
The Louisville gateway has always been intriguing to me. On the map it looked great. Of course I remember reading that Southern wanted to place an Atlanta - Chicago train with Milw and it called for a 24 hour transit, less than 30mph, but MILW told them they couldnt guarantee 24 hours from the 'ville to Chicago. I think Southern then turned to Mopac for interchange at Mt. Vernon....lots of 90% turns in that routing.
MP173 wrote: So, let me get this straight. Appx 25% of the EB traffic out of PNW was then turned at Bensenville and taken to Kansas City for interchange.
No, the KC block was taken off at Pig's Eye. Happened to mention the specific % typical to one fast freight. Not the figure for the whole EB off the PCE.
Who did most of that traffic go to? Frisco? That 25% would amount to about 10,000 carloads per year.
Yes, but only if you assume all the KC traffic went on one section of #262, none on the second section of #262, and none on #264 or #266.
In 1965, 26,000 MoPac, 26,000 Santa Fe, 18,00 KCS, 12,000 SLSF, 11,000 RI, six other roads.
Michael:Didnt think of the Mississippi River line. That is one of the more scenic routes in the Midwest. Thanks for the numbers. Was most of it lumber out of PNW or also intermodal?
MP173 wrote: Michael:Didnt think of the Mississippi River line. That is one of the more scenic routes in the Midwest. Thanks for the numbers. Was most of it lumber out of PNW or also intermodal?ed
Good question. I will ask the intermodal manager.
That Mississippi line was one of the iconic railroad routes along an iconic river.
Instrumental, I vaguely understand, in getting Wisconsin and Minnesota supplies and troops quickly south to the Siege of Vicksburg, ensuring Grant's victory.
Dont know if I would have described it quite that way, but it makes sense.
I have been to Marquette, Iowa several times and always enjoyed the drive. It was always neat to see the railroad paralleling the river.
MichaelSol wrote: MP173 wrote: Michael:Didnt think of the Mississippi River line. That is one of the more scenic routes in the Midwest. Thanks for the numbers. Was most of it lumber out of PNW or also intermodal?edGood question. I will ask the intermodal manager.
Looking at some train reports provided by Dick Eisefeller (Big "E" Productions), and interpreted by Rob Leachman, second section Train #262 carried the import COFC/TOFC. Almost 60% was destined for points east of Chicago. Nearly 25% went through Kansas City with a number of loads to Houston and Dallas. Lumber on Train #264 through Kansas City also appears to have been about 20-25% of the carloads on 264 at Aberdeen.
On the day examined, 2-16-73, the two trains together handled 121 loads and 56 empties eastbound from Aberdeen, and on another day, 10-15-72, 188 loads and 34 empties -- 85%/15%.
MP173 wrote: By the mid 70's, perhaps a year or two earlier, it should have became obvious to MILW that the Omaha line was absolutely nothing to them. The UPRock merger was dead and by then CNW was beginning to ramp up as the Falcons and other trains began to take off. At that time, it certainly should have considered the option for selling the Omaha line to UP. The timing was there. Coal was still a few years away for CNW. They were dependent on UP for survival, the Fremont connect was their life line. A sale of the Omaha line to UP (by MILW) would have completely changed the landscape of western railroading. First of all, UP would have had access to Chicago and the lifeline to CNW would have disappeared. Thus, the ability to leverage their coal would have been reduced. CNWwould have probably dried up and gone away.The more I think about it, the failure of MILW to sell their line, or perhaps to consider selling it, sealed their doom a few years later. As has been previously discussed, MILW seemed to be much too concerned with the Midwestern lines rather than the entire big picture.Michael, the comment about the ICC examiner stating UP needed 5 lines to reach Chicago had to be one of the most ridiculous statements ever made. As you previously stated, roughly 700 cars per day were interchanged going east. That is 7 to 10 trains daily.Finally, is there a source of the Western Mergers study on line anywhere? Would make good reading.ed
Regarding Bob's comments that, given the perpetual objection delays of the UP-RI deal by the other grangers that effectively killed that deal (thus a UP-Milwaukee deal for the Omaha line would have suffered a similar fate), I wonder just what difference might have been made if Milwaukee had simply granted trackage rights over the line as opposed to selling the line? Could the other railroads have thrown up similar roadblocks to a trackage rights deal as they could to a line sale?
Or for that matter, could they have similarly delayed a line sale as much as an outright merger? UP-RI was a merger deal, an entire takeover of a railroad, thus a much bigger regulatory deal than a single line sale.
What about the idea of trading trackage rights (AKA UP gives Milwaukee rights from Marengo WA to Portland OR, and Milwaukee reciprocates by giving UP rights from Omaha to Chicago)? How much potential regulatory interference could the other grangers have mustered over that type of deal?
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