Never too old to have a happy childhood!
RRFoose wrote:I'm curious as to how Montana Rail Link continues to exist and make money as a railroad. They connect with BNSF on both ends, and it seems that BNSF runs a large amount of trains over their rails even though they have their own line (ex-GN) through northern Montana. Unless I'm mistaken, didn't BN LEASE the rail-lines to MRL instead of selling them? Why hasn't BNSF just bought back this line if they rely on it so heavily for handling excess/unit traffic? If BNSF didn't route the trains that they do over MRL, would MRL be able to survive on its own? This operation just seems a bit strange to me, as there aren't any others like it around. Most regionals act as terminating roads instead of through-routes nowadays, and only FEC hauls the tonnage MRL does (minus maybe DME/ICE due to their huge size).
The MRL exists and is profitable account the BN thought it was a good idea at the time. It is still the shortest route between TX, OK, CO, KS, WY and NE than any other BNSF route. BN leased the mainline ROW to Washington Corporations account there was a lien in Gold Bonds on these lines. All of the branchlines were sold to the MRL. Rob Krebs tried his darnedest to purchase the lines back but they are so profitable to WashCorp the asking price to buy out the last 50 years of the 60 year lease was just prohibitive. The contract has a traffic guarantee of the 1987 levels which was a slow year in the industry and MRL tries to set a budget at that level which means it is a pretty lean operation.
The BN had a number of reasons for leasing the line. They have been covered in this forum a few times before. So just sit back and wonder what the BN had in mind and know the MRL is doing a nice job for Mr. Washington and it's employees. The also do a very nice job for the BNSF every day.
arbfbe wrote: It is still the shortest route between TX, OK, CO, KS, WY and NE than any other BNSF route. BN leased the mainline ROW to Washington Corporations account there was a lien in Gold Bonds on these lines. All of the branchlines were sold to the MRL. Rob Krebs tried his darnedest to purchase the lines back but they are so profitable to WashCorp the asking price to buy out the last 50 years of the 60 year lease was just prohibitive.
It is still the shortest route between TX, OK, CO, KS, WY and NE than any other BNSF route. BN leased the mainline ROW to Washington Corporations account there was a lien in Gold Bonds on these lines. All of the branchlines were sold to the MRL. Rob Krebs tried his darnedest to purchase the lines back but they are so profitable to WashCorp the asking price to buy out the last 50 years of the 60 year lease was just prohibitive.
There are people in the industry who continue to view grades as paramount determinants of "inferiority". MRL represented their view of this particular, ex-NP, line with its severe grades, abundant curvature, and a toxic tunnel. They misunderstood, by their self-imposed limitations, every business opportunity represented by this transaction, which created a rail system that is more profitable (%), on BN's "worst" line, than the rest of the system.
chefjavier wrote:What about Wisconsin Central ltd. and Kansas City Southern Lines, do they fall in the same equation?
I wouldn't say KCS falls into this category, as it is a Class 1 and owns its lines. WC on the other hand is similar, but then again it's not. WC owned its lines, MRL leases theirs. WC had a scattered web of lines, MRL is pretty much only a through-route. WC has lots of online customers, MRL doesn't have as many (at least what they do have is all located in a few areas). But for similarities - WC was created bc SOO didn't think those lines were profitable (and they were wrong). MRL was created bc BN didn't think those lines were profitable (and they were wrong). WC was eventually bought back up by a Class 1 due to it's growing importance, and so will the MRL when it's 60 year lease is up (which isn't for another 35 years or so).
RRFoose wrote: chefjavier wrote:What about Wisconsin Central ltd. and Kansas City Southern Lines, do they fall in the same equation?I wouldn't say KCS falls into this category, as it is a Class 1 and owns its lines. WC on the other hand is similar, but then again it's not. WC owned its lines, MRL leases theirs. WC had a scattered web of lines, MRL is pretty much only a through-route. WC has lots of online customers, MRL doesn't have as many (at least what they do have is all located in a few areas). But for similarities - WC was created bc SOO didn't think those lines were profitable (and they were wrong). MRL was created bc BN didn't think those lines were profitable (and they were wrong). WC was eventually bought back up by a Class 1 due to it's growing importance, and so will the MRL when it's 60 year lease is up (which isn't for another 35 years or so).
CN is gradually scaling back and probably will dump many lines of the WC other than the mainline from Superior to Chicago. There will be no winter Taconite Pellet trains from Virginia, MN to Escanaba, MI this year. CN would like to dump the line east of Ladysmith, WI. The Empire Mine in the UP will be closing, which is the only mine that CN serves directly. Just this past Friday it was announced that the Domtar paper mill at Port Edwards, WI will close in the Spring of 2008. The mill will be dismantled and the property sold.
CN is better situated to make money from shipments originating in Wisconsin than the Soo Line was, as it owns the GTW and IC which means that it can move shipments a greater distance and get a better revenue split. CN is continuing to downsize its Wisconsin operations and I can see the day when all they will keep is the mainline, plus the former MILW Valley line.
Thanks to Chris / CopCarSS for my avatar.
BaltACD wrote:Short line carriers, such as MRL and BBR, despite leasing trackage of Class 1 carriers, do not inherit the workforce or work rules that were in effect when the lines were operated by the Class 1 carriers. The Short lines implement their own work rules and pay schedules, which are signifigantly different than those the previously existed.
Which you are basically saying the MRL doesn't have union workers. Its the same thing that CPR did with the lines that they are "buying back" from the ICE.
CPRguy wrote: Which you are basically saying the MRL doesn't have union workers. Its the same thing that CPR did with the lines that they are "buying back" from the ICE.
I don't know if the MRL has union workers or not . However many, if not most, shortlines set up in the last 25 years have union workers. What they don't have are the legacy work rule restrants the Class I operate under due to craft lines and decades of an advisary relationship with their union members.
bobwilcox wrote: CPRguy wrote: Which you are basically saying the MRL doesn't have union workers. Its the same thing that CPR did with the lines that they are "buying back" from the ICE.I don't know if the MRL has union workers or not . However many, if not most, shortlines set up in the last 25 years have union workers. What they don't have are the legacy work rule restrants the Class I operate under due to craft lines and decades of an advisary relationship with their union members.
MRL does have union workers. The furry-backed engineer can vouch for it.
The MRL is a union shop. The point made earlier about the railroads divesting lines and letting someone else run them and they make a go of it is typical of most large corporations. The CEO's and COO's and other acronym's at the top tend to have a very dim view of others in the corporations running their piece of the pie, they tend to use this line or place, makes x profit margin, so every other place must make the same profit margin.
I always thought that even a small margin bussiness is better than no bussiness at all. If the rails pay their way, why sell them off, typical short sided view. Make the money now, let the younger generation worry about how to keep making money.
Reminds me of the commercial where the guy buys a painting at auction and as soon as he wins the auction wants to put it right back up for auction. That doesnt make any sense and selling an even low profit line doesnt make sense for the future.
The article in Trains a couple of months ago about the tanker trains of petroleum was a very interesting article of how the regional attitude makes it work.
ed
MP173 wrote: The article in Trains a couple of months ago about the tanker trains of petroleum was a very interesting article of how the regional attitude makes it work.ed
I sit on an advisory board of the biggest shipper on the line. Once a month we meet to talk over how things are going, including transportation service. The GM comes from a railroad family, worked for one in his early career, and knows what they can do and not do.
This is a company with a $35 million transportation budget and sophisticated enough to know what good rail service is and isn't.
In general, the company has not been happy at all with the quality of rail service since the Milwaukee left. I am not referring to price, I am referring to service. And the problems long predate the current excuses of congestion, lack of capacity etc. Rather, the problems reflect an ongoing attitude about railroading, by railroads. However, the company gives very high marks to MRL for service and making it work, notwithstanding the obstacles placed in the path of continuing rail utilization by the connecting Class I carrier that ultimately carries most of the traffic to their ultimate destinations. Indeed, the GM phrases his observations with the preamble, "if it wasn't for MRL ...".
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The terms of the MRL sale/lease obligate BN (and now BNSF) to move a specified number of cars on the MRL in a specific time period. When the quota is not met, BNSF pays the difference; When the quota is exceeded, BNSF pays extra for handling the additional traffic. When you say "there aren't any others like it around," that is appropriate, with regard to the traffic guarantee.
Mark Meyer
MichaelSol wrote: There are people in the industry who continue to view grades as paramount determinants of "inferiority". MRL represented their view of this particular, ex-NP, line with its severe grades, abundant curvature, and a toxic tunnel. They misunderstood, by their self-imposed limitations, every business opportunity represented by this transaction, which created a rail system that is more profitable (%), on BN's "worst" line, than the rest of the system.
This is an "apples-to-oranges" comparison. Assuming the intent is to suggest MRL is more profitable than BNSF (or whatever "the rest of the system" means), it's not valid. MRL is about 900 miles with no major terminals in a rural area. BNSF is a system of 32,000 miles with a vast variety of operating situations and conditions. All BNSF trains operate with BNSF power (or power leased by BNSF or through horsepower hours compensation); Most trains operating across MRL do NOT operate with MRL power (but are BNSF trains with BNSF power, except for helpers). BNSF operates trains as they are warranted on their system. MRL is guaranteed a quota of traffic from BNSF. In this aspect of the "comparison," it would be most appropriate to ask what the profitability of MRL would be without a guaranteed traffic base.
Guaranteed traffic clouds the viability of the MRL routing. In other words: How much traffic (which is tied to profit) would BNSF route via the MRL if it was not obligated to do so? I'm not privy to this information, but what is known is that the MRL was once the former Northern Pacific route from the Twin Cities / Upper Midwest to the Pacific Northwest, and for traffic routed in this service lane today, just about zero traffic is scheduled by BNSF to operate on MRL, using the preferred shorter, less steep route through Havre and Whitefish in preference. We also know that about 10 years ago, BNSF saw fit to improve the physical plant on its line from Mossmain (Laurel) to Shelby, installing or lengthening four sidings, adding power switches and new crossover at Mossmain, significantly improved yard capacity at Shelby (staging point to/from Laurel, via Great Falls), and added numerous failed equipment detectors. This has created a high capacity route for traffic from Laurel to Spokane bypassing MRL that BNSF has and does use on occasion. Logic would dictate that there was some economic justification for this from the point of view of BNSF, whether it be a potential bargaining chip in the future or that the route through Great Falls would be preferred if there were no restrictions. Personally, I don't know which it is.
And, there are people who continue to view grades as not important, even though there are just about no examples of this being the case on the operations side of the railroad. However, in the vast majority of cases, grade matters with regard to how trains are routed. Even Montana Rail Link will route heavy trains along the Clark Fork River via St. Regis rather than over Evaro Hill because it can be cheaper to do so. From Saluda Hill to Tennessee Pass to Raton Pass, there are lots of examples of routes that are mothballed or see little traffic solely because there is another route with a better profile. Then there are routes such as the ex-D&RGW route (now UP) through Moffat Tunnel in Colorado. Well known for its steep grades, the route continues very busy, but not with through trains between Denver and Salt Lake City. With the exception of maybe one through UP train, Amtrak, and BNSF trackage rights trains, Denver-Salt Lake City UP traffic goes across Wyoming due to the lesser grade. It is coal (originating near Craig and Southeast of Grand Junction) that has no other way to get over the Continental Divide that makes up the bulk of the traffic through Moffat Tunnel.
Is it safe to assume it is mainly coal which travels from Laurel to Shelby on the upgraded line?
Ed:
Mostly grain. At present there are only four significant westward moves of PRB coal in unit-train volumes, three via BNSF-MRL and the other all-UP:
1. Portland General Electric's (PGE) 584 MW Boardman Plant near Hinkle, Oregon, routed BNSF-Laurel, MRL-Spokane, UP-Boardman.
2. Spot shipments to Roberts Bank, B.C., for export to China, routed BNSF-MRL-BNSF (movements this summer and fall). Movement of loads is via Pasco and Vancouver, Wash.; the empties appear to be coming back that way too.
3. Newmont Nevada Energy Investment's (Newmont Mining) 200 MW TS Power Plant near Dunphy, Nevada, routed UP (new start up this fall). Movement is via the Yoder Sub to Egbert, Wyoming, thence west on the Overland Route to Ogden, across the lake, up Montello Hill to Wells, Paired Track to Dunphy.
4. TransAlta's 1,404 MW Centralia Coal Plant near Centralia, Wash., routed BNSF-MRL-BNSF via Pasco and Vancouver, Wash. This plant dates to 1971 as a mine-mouth power plant; the Centralia Mine closed in November 2006 and the plant switched to PRB coal. It's been reported that some of these trains have been routed via Mossmain and Shelby but apparently none are at present. (Note -- I had totally forgotten about this earlier, so edited to add.)
RWM
VerMontanan wrote: MichaelSol wrote: There are people in the industry who continue to view grades as paramount determinants of "inferiority". MRL represented their view of this particular, ex-NP, line with its severe grades, abundant curvature, and a toxic tunnel. They misunderstood, by their self-imposed limitations, every business opportunity represented by this transaction, which created a rail system that is more profitable (%), on BN's "worst" line, than the rest of the system.This is an "apples-to-oranges" comparison. Assuming the intent is to suggest MRL is more profitable than BNSF (or whatever "the rest of the system" means), it's not valid. MRL is about 900 miles with no major terminals in a rural area.
This is an "apples-to-oranges" comparison. Assuming the intent is to suggest MRL is more profitable than BNSF (or whatever "the rest of the system" means), it's not valid. MRL is about 900 miles with no major terminals in a rural area.
No, what it is designed to suggest is that the opposite contention is not necessarily true because, surprise surprise, contracts control and business "arrangements" do not always follow grade and alignment. And few railroads do have "major terminals" in a rural area, whatever that means, and doesn't terminate therefore the bulk of its traffic.
And yes, it was meant to suggest that MRL is more profitable than BNSF at least for the time periods I am familiar with it. Can't speak to the present.
chefjavier wrote:We need to look at Florida East Coast. They operate the same as MRL. The bottom line they take care their customer.
This is why I think the cn should hire some of the original wc mananagement team. Were back to tearing up rail and poor service. All that hard work to make so called failed lines back to life. This is why class 1 buy outs should be stopped. All the CN cared about was the main line to chicago. What would be cool if the lines were spun off to a new short line called the WISCONSIN CENTRAL! CN should go back to canada and stay there!
Murphy Siding wrote: chefjavier wrote:We need to look at Florida East Coast. They operate the same as MRL. The bottom line they take care their customer. ? FEC is not tied to a single Class 1 railroad at each end, like MRL is tied to BNSF. Nor was FEC spun off from said railroad. I don't see them as being remotely alike.
Murphy:
FEC is tied with CSX from Jacksonville. FEC is trying to haul to Atlanta but I guest CSX is not letting them to get the rights. Trains Magazine wrote a great article on FEC. I think it was August or September issue.
chefjavier wrote: Murphy Siding wrote: chefjavier wrote:We need to look at Florida East Coast. They operate the same as MRL. The bottom line they take care their customer. ? FEC is not tied to a single Class 1 railroad at each end, like MRL is tied to BNSF. Nor was FEC spun off from said railroad. I don't see them as being remotely alike.]Murphy:FEC is tied with CSX from Jacksonville. FEC is trying to haul to Atlanta but I guest CSX is not letting them to get the rights. Trains Magazine wrote a great article on FEC. I think it was August or September issue.
According to the ORER, FEC has connections with CSXT at Jacksonville, Lake Harbor, Marcy, Miami, and West Palm Beach; and with NS at Jacksonville.
Also according to the ORER MRL has the following freight connections and junction points: Garrison, MT (BNSF); Laurel, MT (BNSF); Spokane, WA (BNSF); and Sandpoint, ID (UP).
"No soup for you!" - Yev Kassem (from Seinfeld)
arbfbe wrote: BN leased the mainline ROW to Washington Corporations account there was a lien in Gold Bonds on these lines.
BN leased the mainline ROW to Washington Corporations account there was a lien in Gold Bonds on these lines.
I thought all domestic contracts specifing payment in gold were voided by the government as part of the New Deal. Obviously, that is not true here, or only partially true. Could someone explain what it is in these bonds that was a problem for the BN?
ericsp wrote: chefjavier wrote: Murphy Siding wrote: chefjavier wrote:We need to look at Florida East Coast. They operate the same as MRL. The bottom line they take care their customer. ? FEC is not tied to a single Class 1 railroad at each end, like MRL is tied to BNSF. Nor was FEC spun off from said railroad. I don't see them as being remotely alike.]Murphy:FEC is tied with CSX from Jacksonville. FEC is trying to haul to Atlanta but I guest CSX is not letting them to get the rights. Trains Magazine wrote a great article on FEC. I think it was August or September issue. According to the ORER, FEC has connections with CSXT at Jacksonville, Lake Harbor, Marcy, Miami, and West Palm Beach; and with NS at Jacksonville.Also according to the ORER MRL has the following freight connections and junction points: Garrison, MT (BNSF); Laurel, MT (BNSF); Spokane, WA (BNSF); and Sandpoint, ID (UP).
Both Railroads are same size and experience the same problems.
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