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Wisconsin to buy 150 new log cars for CN

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Wisconsin to buy 150 new log cars for CN
Posted by CMStPnP on Saturday, June 18, 2016 7:34 PM

So as part of the response of Northeast Wisconsin to get CN to keep operating it's lines up into the North Woods.    They figured out that CN can start carrying logs from the North Woods to the mills of the Paper Valley between Appleton, WI and Green Bay, WI.    CN said it would like to have the cars but so far the business has not proved resilent enough for CN to buy the cars.     So apparently the State or the Communities of NE Wisconsin are going to pool their money and buy 150 new log cars for CN.     Just read about that currently.     Another item they are discussing was opening a TOFC ramp or collection point in Green Bay or Menominee.     They say the closest one otherwise is in Chicago and they feel they could generate some container traffic if CN would open a yard further North.     We'll see what happens with this next initiative.

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Posted by MidlandMike on Saturday, June 18, 2016 9:32 PM

Can I presume log cars are so specialized that no one leases them, or is there some other reason why they can't just lease them?  Might CN have their own idle log cars with the shut down of much of the former BCR Dease Lake line?

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Posted by CMStPnP on Saturday, June 18, 2016 11:19 PM

MidlandMike

Can I presume log cars are so specialized that no one leases them, or is there some other reason why they can't just lease them?  Might CN have their own idle log cars with the shut down of much of the former BCR Dease Lake line? 

From what I understand CN's position is yes they do have their own log cars via WC and long ago purchases but there is currently a shortage of them as CN is also cutting them up for scrap.     The lumber suppliers stated to WisDOT in a survey they could load and ship more freight if they were supplied with more log cars.    

CN is hesitant to buy them itself because it does not see a long-term need or feels this is just a short-term shortage, not sure which.    I looked at some youtube videos   Youtube SEARCH CN Hayward, WI, looks like they have plenty of log cars to me but that is just looking at passing frieghts and they do look pretty old and messed up though...........so maybe they are near retirement?    Also, unsure of the last question.

Kind of weird if you ask me because you think CN with it's deep pockets would just buy them itself.    Then again if the log cars are only going to be used to ship from Michigan UP to central Wisconsin..........it's not a long haul.

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Posted by cx500 on Saturday, June 18, 2016 11:57 PM

Freight cars have long lives, now 50 years permitted, and are not cheap.  It would seem that the shippers themselves are reluctant to make a long term commitment by buying or leasing their own cars, so it is not too surprising that the railway will in turn be averse to buying a fleet of specialized cars for what may be a short lived use.  I presume the existing log cars are coming to the end of their mandated 40 or 50 year life.

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Posted by greyhounds on Sunday, June 19, 2016 12:53 AM

CMStPnP
Kind of weird if you ask me because you think CN with it's deep pockets would just buy them itself.    Then again if the log cars are only going to be used to ship from Michigan UP to central Wisconsin..........it's not a long haul.

It doesn't matter how deep CN's pockets are.  No rational entity will make an investment unless there is a decent opportunity to earn back the money with a good rate of return.  Apparently, CN doesn't figure there is such an opportunity.

Northern Wisconsin has an economic problem.  Paper making was a significant industry there.  But the paper mills have been closing due to a decline in demand for paper.  There's really nothing anyone can do about this.  Acquiring 150 cars to haul logs to still operating paper mills is but a futile gesture.

 

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Posted by CMStPnP on Sunday, June 19, 2016 1:19 AM

OK this is not the article I read but I found this from 2015.    I believe the TIGER grant process failed because they are issuing bonds now and the number of rail cars is up to 150 vs 115........though it could still be 115.     I am sure they are issuing bonds now for them vs TIGER grant.    The article I read said just Wisconsin but below says Michigan as well, not sure if that point has changed.

http://www.centralcorridors.com/wcg/pdfs/GLFR_TIGERVII_2015_Project_Narrative.pdf

 

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Posted by Euclid on Sunday, June 19, 2016 10:10 AM

If CN does not expect sufficient return on investment to purchase the cars, why does Wisconsin expect it to be worth the investment?  Or is this just a public subsidy to the paper industry?  Even a subsidy should have clearly defined economic rationale.  What it is?

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Posted by BaltACD on Sunday, June 19, 2016 10:59 AM

Euclid

If CN does not expect sufficient return on investment to purchase the cars, why does Wisconsin expect it to be worth the investment?  Or is this just a public subsidy to the paper industry?  Even a subsidy should have clearly defined economic rationale.  What it is?

Keeping what paper industry that currently exists in Wisconsin continuing to operate in Wisconsin, continuing employment of Wisconsin residents and continuing tax revenues from the paper industry.  If the paper industry leaves, former employees instead of paying taxes (state income) go on the unemployment rolls (state out go) and there are no taxes collected from the industry.

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Posted by CMStPnP on Sunday, June 19, 2016 4:30 PM

Euclid

If CN does not expect sufficient return on investment to purchase the cars, why does Wisconsin expect it to be worth the investment?  Or is this just a public subsidy to the paper industry?  Even a subsidy should have clearly defined economic rationale.  What it is?

Not being a CN rail guy my presumption is most Class I railroads would rather haul privately owned cars vs railroad cars #1.    I think the #2 reason is risk, if the railroad cannot find anyone else that wants to put skin the game, why would it do so. #3 I think the rail haul in most cases is so short it probably takes the rail car 15-20 years to repay it's original cost.

I don't think there is a mass movement to shut down paper mills in Wisconsin or that the industry is in much decline.    I could accept gradual decline.    Paper Mills are a huge consumer of Engineering students from both UW-Madison as well was UW-Milwaukee, they seem to have very deep pockets still.    One of the largest firms is Kimberly-Clark which has extensive operations in Wisconsin just to support the Manufacture of Huggies disposable diapers..........pretty sure and as a stockholder, that Company and that product is going to be consumming pulp wood for a long time to come in Wisconsin.    Anyways, this isn't the Northeast and the same Economic pardigms do not apply, in my opinion.

Why the paper mills do not fund the railcars is another question but I think the answer is they are not in and do not view themselves in the transportation business, if nobody buys the railcars they will just shift over to trucks more.     More logs on trucks is something Wisconsin does not want because of the damage to roads and how hard it is becomming to find log truck drivers when they are being sucked up by the Baaken Oil fields of North Dakota..........which pays more.

If sourcing logs becomes a problem in Wisconsin compared to other states I think there is also a risk the large companies could shift production to other states which would cost jobs.   Still I do not see them shutting down completely.    Wisconsin also mentioned that if the state does not harvest all the timber available in a year due to lack of transportation it increases the risk of Forest Fire over several years as the wood is not cut back and the wood left in the forest is revenue left on the table.

 

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Posted by MidlandMike on Sunday, June 19, 2016 9:46 PM

During Soo Line days in the Mich. UP, they used gondolas with end hight extensions to carry 8' pulpwood.  They could be loaded with the pulp truck claws, and I guess they would probably have to have been unloaded also with a claw.  I see the new design would be more efficient unloading with a fork lift.  The study quotd also answered my initial question, that there are no log cars for lease.  The study also answered another poster's question, that the economic benefit to the public in the area would more than compensate for the cost of the cars.

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Posted by rdamon on Monday, June 20, 2016 9:29 AM
Seems this this would be a good opportunity to make a “intermodal” log carrier that could be used on a flat or even a well car. 
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Posted by Euclid on Monday, June 20, 2016 9:38 AM

rdamon
Seems this this would be a good opportunity to make a “intermodal” log carrier that could be used on a flat or even a well car. 
 

That sounds like a good idea.  Fabricate a log rack that could ride on existing rolling stock.  There is probably plenty of idle manufacturing capacity in Wisconsin to build them locally.  Would there be any obstacle to that approach? 

Could somebody post a photo of one of these 150 new log cars?

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Posted by Paul of Covington on Monday, June 20, 2016 10:51 AM

   How specialized are these cars?   Couldn't bulkhead or regular flatcars be used for this?   Or is the problem just that there are not enough cars of any type available?

   (edit):  I just re-read earlier comments on this thread and realized that Mike had posed essentially the same question.   Don't railroads or other owners regularly modify or re-configure cars?   If these new cars don't work out it shouldn't be a total loss.

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Posted by PNWRMNM on Monday, June 20, 2016 2:05 PM

If you looked at the WI document you would see that these are purpose built cars. That is typically the case for new cars where the objective is to minimize tare and maximize tare within gross weight limit.

To reconfigure cars, you have to have something reasonable to start with.

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Posted by CMStPnP on Monday, June 20, 2016 3:52 PM

The new cars have not been ordered yet they are getting approval for the bond issuance to fund them.      Here is a video of a CN train with the log cars in it, towards the end of the video it shows them being loaded with a rather large backlog of lumber waiting...........the second half of the video seems to imply car shortage.

https://www.youtube.com/watch?v=0yN2E4ABp0M

Another train carrying loads South and showing some of the light density traffic on the Northern Lines going into the UP which they are trying to fix with help from Wisconsin & Michigan........

https://www.youtube.com/watch?v=VsKFwz2RaTg

 

 

 

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Posted by MidlandMike on Monday, June 20, 2016 8:04 PM

rdamon
Seems this this would be a good opportunity to make a “intermodal” log carrier that could be used on a flat or even a well car. 
 

Pulpwood trucks got to get into the woods, banging between trees, right up to where the iron mules drag up the logs.  Pulpwood trucks are often owner-operated and maintain their own rigs.  IM Log carriers would get really banged up, and trying to coordinate the IM racks supply with the independent pulpers would be a challange.  The truck to train reload presently is done with typical logging equipment.  Specialized IM loaders and pad would be a prohibitive investment for these backwoods log yards.  Some of the transloads are simply a siding or two and the loading might be done directly from self-unloading pulptruck to railcar.

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Posted by Deggesty on Monday, June 20, 2016 8:31 PM

I had been wondering what "log cars" are--and now, I have the impression that they are what I knew as "pulpwood racks"--cars with bulkhead ends and floors that slope from the sides to the middle. I have watched them being loaded by hand from the trucks that brought the logs out of the woods.

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Posted by kgbw49 on Monday, June 20, 2016 8:49 PM

A typical self unloading pulpwood truck in the process of unloading...

A typical pulpwood truck coming out of the woods - note logging "road"...

Soo Line bulkhead pulpwood gondola...

Typical pulpwood load-out siding...

Soo Line pulpwood train in Upper Michigan...

Wisconsin Central pulpwood car - note ability to unload with a wheel loader with grapple claw... 

Wheel loader with claw attachment unloading from the side - this is unloading a truck...

 

 

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Posted by MidlandMike on Monday, June 20, 2016 9:28 PM

Deggesty

I had been wondering what "log cars" are--and now, I have the impression that they are what I knew as "pulpwood racks"--cars with bulkhead ends and floors that slope from the sides to the middle. I have watched them being loaded by hand from the trucks that brought the logs out of the woods.

 

The car you describe sounds like ones I have seen reference to down south.  It seems the bottom was sloped toward the center so they could load 4' pulpwood on both sides, sloping together in the center.  In the Mich-Wis area they cut 8' pulpwood, which filled the width of the car such as the Soo bulkhead gondolas pictured above.  The new cars pictured in the gov't study are bulkhead flats with side racks so the 8' pulpwood can be loaded between the rack uprights, for easer unloading with big claws or fork lifts that fit between the uprights.

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Posted by kgbw49 on Monday, June 20, 2016 10:17 PM

Here is a pulpwood load out siding on Kansas City Southern...

I believe these might be some of the cars that Mr. Deggesty is referring to - these are in Mississippi and it appears that the pulp is slanting inward in the manner previously described...

Here is a Southern car being hand loaded with pulp and one can see the inward slant of the pulp wood...

 

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Posted by SD70M-2Dude on Tuesday, June 21, 2016 12:44 AM

CMStPnP

Another item they are discussing was opening a TOFC ramp or collection point in Green Bay or Menominee.     They say the closest one otherwise is in Chicago and they feel they could generate some container traffic if CN would open a yard further North.     We'll see what happens with this next initiative.

Didn't they try something similar with the E&LS a few years ago, how did that work out?

I find this topic on subsidized log/pulpwood cars rather intriguing, as not only does CN have more than enough money to buy the cars themselves they actually loosened the purse strings a couple years ago and bought some.  They are numbered in the DWC 200000 series and were ordered for drilling pipe service, but with the option of using them to haul logs/pulpwood too.  With the downturn in oilfield activity one would think there is a surplus of those cars (and indeed other flatcars and gondolas) that could be used to fill this shortage. 

Also those AC & Soo pulpwood gondolas and WC bulkheads are a common sight in Western Canada only they aren't hauling pulpwood, rather scrap metal, new ties/spikes/other O.C.S. material, steel pipe/beams/rebar or logs in northern B.C. (despite the end of log trains on the Dease Lake line there is still a healthy log business in and out of the Prince George area).  Almost seems like CN is playing the state for a fool to get some new cars on the cheap.  I would hope that the state will retain ownership of the cars and lease them to CN so the taxpayers get at least some money back over time.

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Posted by kgbw49 on Tuesday, June 21, 2016 7:06 AM

Wisconsin Central had a trailer ramp in the former Milwaukee Road yard in southwest Green Bay for many years.

However, it slowly dwindled and was finally closed.

That was before CN bought WC and the EJ&E.

At the same time, the Chippewa Falls ramp is not that far of a dray from the upper Wisconsin River valley for traffic heading west on CN, and Chicago is not all that far of a dray for traffic to other points.

One geographical reality is that Northern Wisconsin and Upper Michigan are really a big peninsula from a rail traffic standpoint, isolated by Lake Superior and Lake Michigan, bypassed by transcontinental mains to the north and then to the west-southwest.

Basically, everything to the east and north of the CN main line through Wisconsin is part of this de facto transportation peninsula. (Yes, CN does cross to Canada at Sault St Marie, but the traffic density is extremely light.)

Unlike the Florida peninsula, where the population density supports significant rail traffic on the FEC "container shuttle", the population density for northern WI and Upper Michigan is also very light.

Green Bay, home of the 13-time NFL Champion Packers, had a population of just under 105,000 at the 2010 census. And that is the largest city in the region.

I am actually surprised that CN has not spun off everything to the east and north of their Wisconsin main line between Superior and Appleton to a Genessee & Wyoming or Watco type of operation.

 

 

 

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Posted by Deggesty on Tuesday, June 21, 2016 9:45 AM

That loading on the KCS looks awfully messy to me; that on the Southern is just like what I saw in the Southern in South Caroloina and on the AT&N in Alabama.

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Posted by CMStPnP on Tuesday, June 21, 2016 10:45 AM

kgbw49
I am actually surprised that CN has not spun off everything to the east and north of their Wisconsin main line between Superior and Appleton to a Genessee & Wyoming or Watco type of operation.

They are attempting segment by segment abandonments instead of spin off.    Note that in Northwestern Wisconsin where the Frac Sand Boom is taking place, CN was attempting to sell a 45 mile line segment to Wisconsin and Northern but instead cancelled the sale once it learned how well financially Wisconsin and Northern was doing with just the new Sand Mining operations (very stupid, IMO as CN does not have the labor agreements to compete but fairly typical self-destructive rail competition).     

Anyways it was the abandonment applications and taking the line segments out of operation that Wisconsin saw and stepped in with offers to attempt to assist CN's marketing department lure more business to the NE Wisconsin lines and stop the line retrenchment.     My view is that CN will abandon them regardless and is just trying to see how much money they can shake down Wisconsin for.      There is no way when you look at the mileage of rail in the UP and Northern Wisconsin that Wisconsin will be able to preserve even 50% of it unless it has a Gold Rush of some type.     CN has a line that runs the full length of the UP and then one that runs crosswise.     There is nothing up there but forest and bears.    Those lines would work well as a bridge line if Canada built a new major city West of Toronto (call it Metropolis) and placed that new city just above Wisconsin and Michigan.     Thats not going to happen though.

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Posted by MidlandMike on Tuesday, June 21, 2016 3:43 PM

Deggesty

That loading on the KCS looks awfully messy to me; that on the Southern is just like what I saw in the Southern in South Caroloina and on the AT&N in Alabama.

 

I would guess that the Southern type pulpwood car would have to be loaded neatly with both side's piles leaning toward one another so they don't lose the load from those open-sided cars.  The KCS cars have side risers to hold the logs good enough for mechanical loading.  On the Southern you see a 4 man crew unloading that tiny truck and stacking the railcar.  On the modern KCS type operation, an equipment operator with a double claw hook makes quick work of a mountain of logs too heavy for hand loading.  

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Posted by MidlandMike on Tuesday, June 21, 2016 4:22 PM

CMStPnP

... There is no way when you look at the mileage of rail in the UP and Northern Wisconsin that Wisconsin will be able to preserve even 50% of it unless it has a Gold Rush of some type.     CN has a line that runs the full length of the UP and then one that runs crosswise.     There is nothing up there but forest and bears. ...

 

Well there is the remaining Tilden mine in the Marquette iron range on the line north from the Escanaba ore docks.  The ex-C&NW line became isolated from their other lines when they sold the surrounding lines to the WC.  The lines south of there would get all-rail winter moves.  Speaking of gold mines, a failed gold mine processing mill was converted to a concentrator mill for a new nickel mine just north of the iron range.  A couple of miles of rails-to-trails was re-railed to connect the mill back to the rail system.  I believe the concentrate cars are headed to Sudbury, so the original Soo line across the UP would be the most direct line for that.  Last I knew there were paper mills still at L'anse, Munising, Manistique, Escanaba, and Kingsford.

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Posted by CMStPnP on Wednesday, June 22, 2016 12:45 AM

There is a link on one of the above links that shows all the online lumber gathering points as well as the paper mills.     CN has almost an absolute monopoly on all of them.    I think there is only one on E&LS.

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Posted by CShaveRR on Wednesday, June 22, 2016 10:42 AM

What surprises me is that apparently CN won't lease log cars from TTX (they are a member company, right?).  TTX deals in log cars, reporting marks LTTX, which may be suitable for pulpwood business as well as actual logs (out in Oregon and Washington, I've seen plenty of these lately).  If they're suitable (a big "if", I guess), CN could save a bit of money by going this route (or perhaps come up with a modification that would work).

A new-built log car would probably have no ends, no floor, and just U-shaped supports spaced properly for handling six-foot pulpwood logs.

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Posted by rdamon on Wednesday, June 22, 2016 12:05 PM

There is no getting taxpayer money from doing a lease!!

Form the 2015 paper..

$4.2 Million State of Wisconsin

$3.0 Million State of Michigan

$1.2 Million Canadian National

$4.8 Million requested TIGER VII Grant Funding

 

For CN $1.2M is a good price for 115 railcars ($10,500 each).

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Posted by MidlandMike on Wednesday, June 22, 2016 9:08 PM

The study done for the TIGER grant, that was cited by CMStPnP near the start of this thread, has a sentence that said no lease log cars were available.  They gave no further explaination.

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