A business, such as a manufacturing plant, a farm products company or a distribution center, considers building their facility near an operational railroad track. Management desires to ship their products by rail, but there is no siding. What justifies the construction of a siding? If justified, who pays for the construction of the siding, the company or the railroad?
Thank you J. Edgar
Nick
nicknoyes wrote: A business, such as a manufacturing plant, a farm products company or a distribution center, considers building their facility near an operational railroad track. Management desires to ship their products by rail, but there is no siding. What justifies the construction of a siding? If justified, who pays for the construction of the siding, the company or the railroad?
The Union Pacific website has detailed guidelines on how to request new railroad service at
http://www.uprr.com/customers/attachments/industry_guidelines.pdf
John Timm
Industry generally pays for labor and material costs for signal modifications and trackwork on railroad owned property as well. They might get some of those costs back in the form of rebates based on the number of cars shipped, etc. Signal labor and equipment is not cheap and company labor is expen$sive as well when using Class 1's as opposed to contract labor. The days of just having a track as leverage against trucking costs are all but gone. (IF you do not use the switch in a main line for long periods of time, don't be surprised if the switch and frog get removed and set aside. Use it or lose it. (and industry still fails to maintain their trackage and expects the railroad to inspect and maintain it - Most industries on-site folks are not even aware there is a contract that spells out who is responsible for what.)
UP may not build that track or switch it if it resides out of terminal or yard limits - read carefully.
nicknoyes wrote:A business, such as a manufacturing plant, a farm products company or a distribution center, considers building their facility near an operational railroad track. Management desires to ship their products by rail, but there is no siding. What justifies the construction of a siding? If justified, who pays for the construction of the siding, the company or the railroad?
See Mudchicken's comments.
A siding is a place to meet and pass trains. I think you're referring to an industrial spur.
The industry pays 100% of the cost of the spur, turnout, and any changes to signaling, drainage, access roads, grade-crossing signaling, and anything else that is affected. In addition the industry may be required to pay 100% of the cost of network improvements required to serve the industry. For example, a power plant proposing to receive one train per day will likely be asked to pay for siding extensions, new sidings, signaling upgrades, power crossovers, fueling tracks, staging tracks, inspection tracks and other network facilities between the power plant and the mine, if there is not spare capacity in place already. These costs can easily add up to $50-100 million. A carload shipper of moderate size -- say, 30 carloads per day -- may be asked to pay for 100% of the cost of new classification tracks in a yard, new storage tracks, and anything else that may be required to serve the shipper. These costs can easily add up to $10-20 million.
The shipper may or may not receive a rebate or reduction in the cost of shipping for the value of their improvements to the network. In most cases the answer today is no. However, the railroad recognizes that it the transportation cost and capital costs are too high the shipper will look to a different location, a different railroad, truck or barge, or simply not build anything at all. The railroad will work with the shipper to achieve the best possible outcome for the shipper but is not in the business of investing its capital into the shipper's fixed plant.
All track and signal construction within the railroad right-of-way will usually be done by railroad forces on a force-account basis because the railroad's agreement with its locals requires such. The shipper can use its own contractor outside of the railroad right-of-way.
A shipper located on a lightly used, unsignaled main line or within yard limits might get away with a simple #11 hand-throw turnout at $50-100K up to the edge of railroad right-of-way. A shipper on a high-density congested main line might be required to install a #24 movable-point frog turnout leading to a 10,000 signaled deceleration track, with a control point on each end, costing $8-10 million. That's before the shipper has laid a foot of track on its own property.
The location as Mudchicken points out is not always feasible. I wish I had a dollar for every shipper who optioned or purchased a piece of property next to a main track and then discovered the railroad would not put in a switch at any price. In signalled track a switch cannot be put in just anywhere, and curves, bridges, clearances, grade-crossings, and other features all play a big role. Sometimes a long lead has to be constructed for 1-5 miles to get to a point where it's feasible to install a turnout. I can recall one shipper who discovered to get a spur into their property next to a main line would have required construction of a $50 million bridge -- were they ever aghast!
I do a lot of these things and it's fun but never very easy. The amount of coordination it takes is not for the faint of heart. If, for example, you wanted a spur off a signaled main line to start accepting cars on February 1, 2010, you're almost already too late to get started.
RWM
Railway Man wrote: A shipper located on a lightly used, unsignaled main line or within yard limits might get away with a simple #11 hand-throw turnout at $50-100K up to the edge of railroad right-of-way. A shipper on a high-density congested main line might be required to install a #20 movable-point frog turnout leading to a 10,000 signaled deceleration track, with a control point on each end, costing $8-10 million. That's before the shipper has laid a foot of track on its own property.snipI do a lot of these things and it's fun but never very easy. The amount of coordination it takes is not for the faint of heart. If, for example, you wanted a spur off a signaled main line to start accepting cars on February 1, 2010, you're almost already too late to get started. RWM
A shipper located on a lightly used, unsignaled main line or within yard limits might get away with a simple #11 hand-throw turnout at $50-100K up to the edge of railroad right-of-way. A shipper on a high-density congested main line might be required to install a #20 movable-point frog turnout leading to a 10,000 signaled deceleration track, with a control point on each end, costing $8-10 million. That's before the shipper has laid a foot of track on its own property.
snip
RWM,
Are there many such projects underway? I would imagine that such an investment would require a thriving industry and that the lead time requirements would require a fairly stable one as well.
Are Ethanol plants big builders in such projects right now?
-ChrisWest Chicago, ILChristopher May Fine Art Photography"In wisdom gathered over time I have found that every experience is a form of exploration." ~Ansel Adams
CopCarSS wrote:RWM,Are there many such projects underway? I would imagine that such an investment would require a thriving industry and that the lead time requirements would require a fairly stable one as well.Are Ethanol plants big builders in such projects right now?
Q 1. Business is booming. People can figure out a lot of what might happen by paying attention to the boring minutia of numerous public sources such as air emissions and water discharge permit applications, BLM land-use applications, rezoning requests, etc., and have a good idea what's coming 1-5 years in advance. Also, by just thinking through how things are going to get places to build big projects or supply fuel/raw material to big plants, you can figure out a good picture of what will happen to railroad traffic and lines years in advance, too. There are few secrets but neither will anyone tell you anything if they don't have to, either.
Q 2. I thought the ethanol biz had about built-out last year but then Bush and Congress came up with a giant subsidy bill last fall.
Locally a new steel truss fabrication facility is well described by RWM's description of a minimum effort -- single spur off an unsignalled branch line within yard limits. A contractor constructed the in-plant spur up to the UP property line -- including installation of the derail. UP has yet to connect it to the branch line.
dd
Railway Man wrote: CopCarSS wrote: RWM,Are there many such projects underway? I would imagine that such an investment would require a thriving industry and that the lead time requirements would require a fairly stable one as well.Are Ethanol plants big builders in such projects right now?Q 1. Business is booming. People can figure out a lot of what might happen by paying attention to the boring minutia of numerous public sources such as air emissions and water discharge permit applications, BLM land-use applications, rezoning requests, etc., and have a good idea what's coming 1-5 years in advance. Also, by just thinking through how things are going to get places to build big projects or supply fuel/raw material to big plants, you can figure out a good picture of what will happen to railroad traffic and lines years in advance, too. There are few secrets but neither will anyone tell you anything if they don't have to, either. Q 2. I thought the ethanol biz had about built-out last year but then Bush and Congress came up with a giant subsidy bill last fall.RWM
CopCarSS wrote: RWM,Are there many such projects underway? I would imagine that such an investment would require a thriving industry and that the lead time requirements would require a fairly stable one as well.Are Ethanol plants big builders in such projects right now?
Addition to Q2. - RWM (probably) and I have wandered into situations where industry got in far to big a hurry, hired novices and we had to come in and sort out the mess just to keep Brand X Ethanol Plant in business. Sounds like we both are into some serious addition(s) to the initial ethanol boom. (as in, we made it - now where do we go with it?)....and as noted in other threads, Ag Business can do some horribly short sighted things (Fire Ready Aim...AgriDummies..cutting corners) that wind up in disaster.
There is no fun in telling a client or railroad that you can't get a railcar from here to there after they built a monster project that is now doomed to be inefficient or non-functional in a rail sense. (and you have wracked your brains for days trying to undo the damage)
..If Chris were to look up in Windsor, Golden, North Yard, Byers, Hudson, SLV and a few places around him he would see new track or serious re-arrangements of track.
Scary stuff is the build it first and talk to the railroad later crowd. (Especially the developers - been around the GM Parts warehouse project east of town? )
mudchicken wrote: Railway Man wrote: CopCarSS wrote: RWM,Are there many such projects underway? I would imagine that such an investment would require a thriving industry and that the lead time requirements would require a fairly stable one as well.Are Ethanol plants big builders in such projects right now?Q 1. Business is booming. People can figure out a lot of what might happen by paying attention to the boring minutia of numerous public sources such as air emissions and water discharge permit applications, BLM land-use applications, rezoning requests, etc., and have a good idea what's coming 1-5 years in advance. Also, by just thinking through how things are going to get places to build big projects or supply fuel/raw material to big plants, you can figure out a good picture of what will happen to railroad traffic and lines years in advance, too. There are few secrets but neither will anyone tell you anything if they don't have to, either. Q 2. I thought the ethanol biz had about built-out last year but then Bush and Congress came up with a giant subsidy bill last fall.RWM Addition to Q2. - RWM (probably) and I have wandered into situations where industry got in far to big a hurry, hired novices and we had to come in and sort out the mess just to keep Brand X Ethanol Plant in business. Sounds like we both are into some serious addition(s) to the initial ethanol boom. (as in, we made it - now where do we go with it?)....and as noted in other threads, Ag Business can do some horribly short sighted things (Fire Ready Aim...AgriDummies..cutting corners) that wind up in disaster.There is no fun in telling a client or railroad that you can't get a railcar from here to there after they built a monster project that is now doomed to be inefficient or non-functional in a rail sense. (and you have wracked your brains for days trying to undo the damage)..If Chris were to look up in Windsor, Golden, North Yard, Byers, Hudson, SLV and a few places around him he would see new track or serious re-arrangements of track.Scary stuff is the build it first and talk to the railroad later crowd. (Especially the developers - been around the GM Parts warehouse project east of town? )
I see your tracks in the snow every time I'm in Denver. Mine were those long-eared jackrabbit tracks.
Some of the track arrangements I've seen that actually got built are breathtaking in their imperviousness to common sense, experience, and feasibility. Sort of like a bad model railroad built by a teenager hopped up on crystal meth. The shipper stands there, wringing their hands, almost in tears, wondering why the Class I won't serve them ...
Ya know you're in trouble when they whip out the plans and the curves are shown in DEGREES RADIUS and the tail track beyond the last turnout is about 80 feet long. I got handed one in a corn state where they'd bought a hill-and-dale property, started building the plant, and then realized the only possible place for their yard was right through a hill where they needed a 200' foot deep cut, but at least it was balanced by the 200' fill right next to it! I can only imagine what that yard will look like when the wind starts to howl and drop the snow in on all those covered hoppers down there in that cut, turning them into an iceberg until next May. I just handed the plans back and said, "I think it's a little late for me to help you, so good luck with all that."
Thank you to mudchicken, Railway Man and all of you for your answers. You were all very helpful.
Another great thread. The economics of railroading never fails to amaze me. So, there is a 2 year backlog on building a spur. What is the normal backlog?
What is pushing the backlog out? Lack of capacity for building such project? Materials? Other factors?
I watched such a project, very small, last fall in East Chicago off of the EJE. As it turned out it was a locomotive rebuilding company that is setting up shop. With that kind of investment, the overhead cost for running a locomotive in their shop will be pretty high.
A second Northern Indiana project should begin soon, the Sysco Food's DC at Hamlet, In is due to come off of the CF&E. Should be good news for CF&E.
ed
MP173 wrote:Another great thread. The economics of railroading never fails to amaze me. So, there is a 2 year backlog on building a spur. What is the normal backlog?What is pushing the backlog out? Lack of capacity for building such project? Materials? Other factors?I watched such a project, very small, last fall in East Chicago off of the EJE. As it turned out it was a locomotive rebuilding company that is setting up shop. With that kind of investment, the overhead cost for running a locomotive in their shop will be pretty high.A second Northern Indiana project should begin soon, the Sysco Food's DC at Hamlet, In is due to come off of the CF&E. Should be good news for CF&E.ed
That's two years without a backlog. It takes a while to do the survey and geotech, do the design, coordinate the design with all the people who have input (engineering standards, track, signal, structures, local operating, regional operating, national operating, marketing, sales, industrial development, and the shipper), get the permits, order the materials, wire the instrument houses, schedule the construction forces, and then start moving dirt. Materials shortages, particularly rail, can drive that out farther. 115 lb. rail is always in short supply because of the demand from transit construction so often it's faster and cheaper to buy 136 lb. Big projects that break loose can use up all the rail and signal material for months. Specialty track, particularly frogs for diamonds, take a long, long time to order and receive. Ties can be a factor too. Sometimes it's easier to get concrete, other times easier to get wood.
I never even considered the regulatory and environmental stuff.
Thanks to Chris / CopCarSS for my avatar.
Murphy Siding wrote: The company I work for has a long range goal of building a new lumber (distibution) yard south of town. The new site is to have a railroad spur. I'm not involved in the process, but I know it's moving very slowly. At one point, someone came to look at our existing siding, to see about harvesting(?) the rails. That must have been a fun visit for someone. The siding, off the Milwaukee Road, is 100+ years old, and probably hasn't seen a car since Ike was president.
Hope they don't leave the railroad work down on the priority list or wait till the last minute. (new facility w/o rail service is part of what I hinted about above.)...Lease & contract negotiations with the railroads can take 6+ months alone.
Salvaging rail and cascading it into a new project may not even be an option if the rail is too light, corroded, Open Hearth, oddball, torchcut, worn or a host of other things. Grading secondhand rail is something that RWM and I have probably gotten into on occasion. Not always as simple as it would appear.
Why is it easy to abandon something very fast and so hard to raise up new track?
Thinking further, Im dumbfounded to learn it takes so long to build, activate and operate on a new spur. It is easier to whistle MOW out and point to a broken section of Mainline. Faster too.
.....and just how do you abandon railroad in a hurry? (usually even a more long drawn-out process in most cases)
Railroads were not born yesterday or last week. Experience and legal compliance dictate that you take a steady approach, you can't play favorites (Elkins Act et. al) and you make sure all the bases are covered. It might go faster if you had more people to service the requests, but the beancounters and operating head bubba's are solely into running trains - everything else is considered a nuisance expense.
Falls Valley RR wrote: Why is it easy to abandon something very fast and so hard to raise up new track?Thinking further, Im dumbfounded to learn it takes so long to build, activate and operate on a new spur. It is easier to whistle MOW out and point to a broken section of Mainline. Faster too.
Simple. It is NOT easy to abandon a track subject to STB jurisdiction (which is anything except a yard track or industrial spur, anything serving more than one customer is not considered an industrial spur). The abandonment process can take 2-3 years or more depending upon a number of factors and that doesn't include the removal of track or sale of the property and ROW.
LC
Well around here in Niagara, Ontario; I see a lot of industries that try and pop up, attempt to tap into Trillium Railways which is a shortline that uses existing tracks usually ex CN branch lines. Also, the odd one will attempt to add a new switch but it is very rare. Recently in St. Catharines, Niagara Structural Steel/ Niagara Erectors, has add a new switch for incoming steel I believe. I find most of the industries that pop up here, are those where the previous industry that had a rail siding/s has move away or gone out of business and then a new industry has simply moved in and either taken over the rail siding and continued the contract under a new name such as Foster-Wheeler to Trenegy (still same product) or they have modified an existing aggreement but have added new rails from the spur and service schedules such as M.J Jones in Dain City (used to be Dain City Intermodal). There is a couple of projects where there will be significant costs involved such as a new line to Interlake Paper via usage on an old N,S&T right of way and I am guessing some blasting of rock to connect to the Canal Subdivision? At any rate, that I believe may be paid for by Interlake Paper but the government might help out with the costs via a grant.
The only major spur addition that I am aware of is at the new Toyota plant in Woodstock, Ontario which I am guessing will be CN?
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