CN Purchased BC Rail

[Anonymous]

This is not news - However after reading your forum back in 2003 and watching every ones opinions on what should happen and why - here we sit 2 years later BC Rail is now owned By CN and we are watching our Provinces Industry crippled by lack of service lack of trains and lack of alternative - Why hasnt this caught any ones interest. The North is being held hostage by this company with no alternative.

I am interested in your thoughts in this matter no that teh sale is completed and implimented


Krista

[tatans]

Say, how long have you lived in Canada, 1 airline, 1 big brewery, a couple of banks(soon to be 2) no railway passenger service etc. etc. We really do hate competiton don't we? and , by the way, have you noticed, no one cares.

[selector]

We don't even have any competition in parliament, AND NO ONE CARES!!

[greyhounds]

I think "You Canadian Types" left out Your most important thingy; The National Hockey League is Shut Down, and no one cares.

The last time I went to a Black Hawks game, trying to impress a new date who was for some reason: 1) from the Detroit area, and 2) a very major Red Wings fan, It cost me $60 a ticket. I ain't paying $120 to take a woman to a hockey game! Plus dinner! And parking. Did it once. Don't want to do it again.

[Anonymous]

I went to a fight once. First class brawl, eh? But in the middle a hockey game broke out[}:)][}:)][}:)]

[Junctionfan]

Take it to a Transport Canada type agency that regulates service. Unlike Wisconsin and other U.S states, Canada does have something to tell CN to perform the service or find the industry an alternative. Also if CN and the industries have signed a contract saying that CN has to perform a service in exchange for something else, as long as the industries are living up to their end of the contract, CN could be sued for breach of contract.

There are other class 1s in Vancouver. CP is the biggest alternative. BNSF also enters the city. SRY is a shortline that is a Rail link subsidiary and must be able to aquire running rights so I don't really see too much of a problem in B.C.

[fuzzybroken]

QUOTE: Originally posted by kmarian

This is not news - However after reading your forum back in 2003 and watching every ones opinions on what should happen and why - here we sit 2 years later BC Rail is now owned By CN and we are watching our Provinces Industry crippled by lack of service lack of trains and lack of alternative - Why hasnt this caught any ones interest. The North is being held hostage by this company with no alternative.

I am interested in your thoughts in this matter no that teh sale is completed and implimented


Krista

Hey, welcome to Wisconsin!!![}:)][}:)][}:)] We've had the same problems in our province errr... state, except the railroad in this case was the Wisconsin Central. Lots of industries "up nort", including the logging and paper industries that WC served so well, are being neglected and surcharged to death by "CN". What happened to our wonderful railroad???

-Mark
http://www.geocities.com/fuzzybroken

[Anonymous]

QUOTE: Originally posted by Junctionfan

Take it to a Transport Canada type agency that regulates service. Unlike Wisconsin and other U.S states, Canada does have something to tell CN to perform the service or find the industry an alternative. Also if CN and the industries have signed a contract saying that CN has to perform a service in exchange for something else, as long as the industries are living up to their end of the contract, CN could be sued for breach of contract.

There are other class 1s in Vancouver. CP is the biggest alternative. BNSF also enters the city. SRY is a shortline that is a Rail link subsidiary and must be able to aquire running rights so I don't really see too much of a problem in B.C.

Vancouver is one city in BC it ISNT BC


CN has the running rights for all BC Rails Old Lines. I thought it was 99 years but have been informed by an unchecked source that its 999 years. The Lower Part of the province has access to other Class one Rail Lines. Northern BC has one set of rail lines and those are the ones previously owned and operated by BC Rail. The Northern Part of BC is the part that is now being held hostage by CN. Area’s Like Elk Valley ( South West BC) are able to turn to an alternative class one provider for transporting Coal (C.P.). Area’s like the Peace Region previously ONLY serviced by BC Rail are now ONLY serviced by CN. Many large companies have gone as far as offering to buy their own trains to ship goods to ports in Vancouver and Prince Rupert. CN won’t allow these trains to run on their newly leased lines. So there is a problem – 1 set of rail lines going into the northern half of BC and one large company with 100 percent rights to it.

[gabe]

QUOTE: Originally posted by greyhounds

I think "You Canadian Types" left out Your most important thingy; The National Hockey League is Shut Down, and no one cares.

The last time I went to a Black Hawks game, trying to impress a new date who was for some reason: 1) from the Detroit area, and 2) a very major Red Wings fan, It cost me $60 a ticket. I ain't paying $120 to take a woman to a hockey game! Plus dinner! And parking. Did it once. Don't want to do it again.

You tell them Greyhounds, the puck stops here.

[BentnoseWillie]

QUOTE: Originally posted by tatans

Say, how long have you lived in Canada, 1 airline, 1 big brewery, a couple of banks(soon to be 2) no railway passenger service etc. etc. We really do hate competiton don't we? and , by the way, have you noticed, no one cares.

Uh...we have at least three domestic airlines, at least two large breweries, and four national banks.

As for no competition in passenger service, that's no different in the USA...

[nanaimo73]

Canada isn't all bad. We have fresh air and water.And we invented Pamela Anderson and Ditch Lights.[:D][:D]

[Anonymous]

I live in Canada.
I don't care about Hockey.

I was never in favour of the BC Rail takeover, it was not a Canadian Decision, it was the Provincial Government of British Columbia that sold it to CN.

The North is now being held hostage by CN, and rail transport is suffering instead of booming in these excellent times.

There have been no surprises with the poor service and the raise in rates that CN has brought to the BC North, we all saw it coming.

[greyhounds]

QUOTE: Originally posted by nanaimo73

Canada isn't all bad. We have fresh air and water.And we invented Pamela Anderson and Ditch Lights.[:D][:D]

Canada is good. I was in Calgary a few years ago for the Stampeed. Had a wonderful time. Enjoyed riding their great transit system and watching the CP trains.

It's got to be the only transit system you can take to a rodeo. Lots 'O interesting history, but it did feel strange to spend the 4th of July with the Union Jack on display.

Sorry about the hockey thing. Their beef tastes different since it's finished out on barley instead of corn. They aparently can't do corn that far north.

[nanaimo73]

Is it a government's job to run freight trains? I don't think so. BC Rail lost money during 4 of it's last 5 years.Why should a load of lumber from MacKenzie going to Chicago have to go through Vancouver? It's at least 6 days faster going through PG.The Premier may be an a--h--- but he is going to put 500,000 containers a year through Prince Rupert.

[Anonymous]

QUOTE: Originally posted by nanaimo73

Canada isn't all bad. We have fresh air and water.And we invented Pamela Anderson and Ditch Lights.[:D][:D]

...and Red Green, and Allanis Morisette, and the b-train, and Labatts, and SCTV

[Anonymous]

QUOTE: Originally posted by nanaimo73

Is it a government's job to run freight trains? I don't think so. BC Rail lost money during 4 of it's last 5 years.Why should a load of lumber from MacKenzie going to Chicago have to go through Vancouver? It's at least 6 days faster going through PG.The Premier may be an a--h--- but he is going to put 500,000 containers a year through Prince Rupert.

BC Rail lost money primarily because they ran passenger trains. I don't think CN is running any passenger trains over the lines.

Where the BC government really blew it is selling the line lock stock and barrel, instead of maintaining ownership of the ROW and either renting it out as an open access line, or designating one of the bidders as the primary operator (re-evaluating that contract every 5 or ten years to make sure they're not pulling a "WC" in BC).

I wouldn't count on Prince Rupert handling half a million containers just yet. Them egg's ain't hatched yet!

Even if PR gets that many containers, is the economic impact from that going to be enough to offset the negative impact being felt by shippers on the ex-BCR?

[jchnhtfd]

Kindly relax and get over it. CN is a multinational, publicly held corporation. As such, it is in business to make money using capital assets. This it does, exceedlingly well.

CN is NOT, repeat NOT, in the business of providing a social service, nor is any other private corporation, either in Canada or the United States (or the United Kingdom, for that matter).

If the people of British Columbia (or Wisconsin, for that matter) want to have more rail service, or different rail service, it is not difficult to do: pass appropriate legislation to provide appropriate subsidies to the relevant railroad.

For reasons which I completely fail to understand, there seems to be a commonly held notion that somehow railroads should be public servants, unlike any other private corporation -- but that notion does not seem to extend to providing the money to perform the public services (see the debates over Amtrak in the US, for instance).

[CSSHEGEWISCH]

BC Rail (formerly Pacific Great Eastern) was not referred to by editorial writers and politicians as the Province's Greatest Expense for nothing. Technically, the Province of British Columbia still owns the right-of-way, it has been leased to CN for 999 years. I doubt that "open access" would make much of a difference in service since political factors would obviously come into play in the granting of operating rights. Also, since the province would still be responsible for maintenance of way and would be pressured by taxpayers and the opposition party to not subsidize this cost from the public till, it could be quite likely that user fees for "open access" would be too high to operate a low-frequency service profitably at a rate that the shippers would tolerate.

[fuzzybroken]

QUOTE: Originally posted by jchnhtfd

Kindly relax and get over it. CN is a multinational, publicly held corporation. As such, it is in business to make money using capital assets. This it does, exceedlingly well.

CN is NOT, repeat NOT, in the business of providing a social service, nor is any other private corporation, either in Canada or the United States (or the United Kingdom, for that matter).

If the people of British Columbia (or Wisconsin, for that matter) want to have more rail service, or different rail service, it is not difficult to do: pass appropriate legislation to provide appropriate subsidies to the relevant railroad.

For reasons which I completely fail to understand, there seems to be a commonly held notion that somehow railroads should be public servants, unlike any other private corporation -- but that notion does not seem to extend to providing the money to perform the public services (see the debates over Amtrak in the US, for instance).

(Note: I'll be talking about what I know of the Wisconsin Central vs. CN situation, although I'm fairly certain the same applies to the BC Rail vs. CN situation...)

While your statement about railroads being privately held corporations is true, I find your statement about railroads not being "public servants" to be slightly less so. I would compare the railroads to electrical utilities. Many, probably most, electrical utilities are publicly owned corporations, and yet many are also highly regulated because their customers are captive customers -- that is, the only "choice" of utilities (or railroads) would involve relocation. In the case of railroads and, for example, a forest production operation, "moving" to a different area is usually not an option, especially when it involves moving a forest! Just not gonna happen.

Furthermore, the industries that CN is alienating in Wisconsin were served without any second thought by Wisconsin Central. What WC realized is that these customers, though not profitable by CN's standards (or the standards of WC's predecessors), fed its more profitable businesses. Other less-than-profitable businesses filled out the trains, reducing per-car operating costs. Unfortunately, while this is something that shortlines and regionals realize and do very well, today's major railroads have all but forgotten. Their managers and "bean counters" sliced and diced the numbers down, and determined what customers were not profitable and should be driven away. In turn, other customers became unprofitable and these, too, were chased away with surcharges and poor service. This has happened over, and over, and over, and over, throughout the history of the railroads, which was one of the reasons for the establishment of the Interstate Commerce Commission and its (originally) iron grip on the iron roads.

And yes, while we lament the loss of our favorite paint schemes and the disappearance of our favorite railroads into a larger one, the bigger issue that is becoming increasingly apparent is the changes in service, usually for the worse.

-Mark W. Hintz
http://www.geocities.com/fuzzybroken

[nanaimo73]

BC Rail (and the PGE) was an awesome railway for railfans.What ticks me off was the lousy coverage in Trains magazine. From June 1960 to April 2003 there were no feature articles in the magazine. Just 6 pages on the Deas Lake line and less on the RDCs. Royal Hudson,Tumbler Electics,big Alcos,ect.,-nothing at all.

[jchnhtfd]

Mark -- you have some excellent points. There is, in fact, a considerable similarity between some aspects of electrical power generation and distribution (particularly distribution) and railroading. For many years in the United States, railroad rates, and service, were intensely regulated on just those grounds. From the standpoint of business economics and attractiveness as capital investments, the result was a disaster, as the regulatory agency (the ICC) simply couldn't move fast enough to adjust to changing business conditions, was subject to intense political pressure, and could do nothing about the competition (trucks, buses, and airplanes). As a result, a political decision was made to deregulate railroads. The result was that you wound up with some very very healthy Class I railroads -- something that hadn't been true for decades -- and a good opportunity for successful short lines and regionals as well. The biggest difference between electric distribution and railroads is that, for railroads, competition is perfectly feasible, does exist, is in excellent condition, and is formidable. -- and is for the most part unregulated, or only lightly regulated.

I can see a case for a railroad as a public service. However, I cannot support requesting that a railroad (or any other non-governmental organization) perform a public service without an adequate return; in some cases, this will mean a public subsidy. As I said in my earlier post, what puzzles me is that many people demand that the railroads perform a public service -- at a loss -- but refuse to pony up the ca***o support the service, and that this attitude seems to be confined to railroads.

Can anyone explain this?

[fuzzybroken]

QUOTE: Originally posted by jchnhtfd

but refuse to pony up the ca***o support the service, and that this attitude seems to be confined to railroads.

Can anyone explain this?

Yep, those would be "unfunded mandates". Here in Wisconsin, our former governor complained about the federal government requiring states to do certain things (the old 55MPH highway spped limit comes to mind) without federal funding to support it. (Wisconsin seems to be a hotbed for a lot of these kinds of things...)

I agree with your view of this principle, but many of the problems at hand on both the former WC and the former BCRail are of the type I addressed in my earlier post. Discouraging the low-revenue traffic could be compared to a farmer not irrigating his fields because pumping water is a money-losing operation, and then deciding to discontinue farming because nothing grew.

We do have somewhat of a success story here in Wisconsin, where the state "ponied up the ca***o support the service" and bought a WC line that CN was abandoning because there was "no customers" and the track needed fixing, blah blah blah. WisDOT bought the line and leased it to Wisconsin & Southern, a shortline/regional that operates on primarily government-owned tracks, and is very good at attracting new customers, no matter how small they may be. And it is these small customers that WSOR provides good service to, and they have attracted many very large customers as well, such as a few ethanol plants, because the large companies know that WSOR will give them good service too.

Anyways, back to the former CN line... WSOR operates a train once or twice a week to serve the few remaining industries on the line, even though a typical train is less than ten cars -- certainly not "profitable" by Class 1 standards. But it is these small customers and the good service they receive that will attract the larger, more profitable customers. Much has been written about these methods of doing business, sometimes you just have to take a loss or spend additional $$$$ (even Canadian $$$$$ [}:)]) to attract the larger $$$$$$$$$ that come from it. What I have learned about this was not directed at railroads, but will work nonetheless.

I am always amazed at the large industries in close proximity to RR tracks that either are not served by rail, or their rail spur is long abandoned, usually because the railroad drove the customer away from rail service. Probably better (worse?) than 90% fall into this category where the local railroad is a Class 1. Class 1s, CN, CP, UP included, are good at running long trains long distances, not the pick-'em'up set-'em-out business that has largely fallen into the hands of the regionals and shortlines. If more Class 1s worked with the attitude of shortlines, they may well have more business than they could handle!!! (Of course, some do anyways...) Or, maybe, our nation(s)' railroads need to work with a different idea, and open access in its current concept is NOT the answer.

Well, enough for now. I'm sure I could go on and on, but I gotta get to work sometime...

-Mark Hintz
http://www.geocities.com/fuzzybroken

[Anonymous]

I suppose with all of this large railway consolidation we really are seeing more and more regionals popping up, and in all that's really a better situation.

Though we lose some railways, other smaller ones are gained, and what's most important is that no matter who is serving the customer, the customer IS being served BY RAIL, is happy, and rail cars are moving back and forth.

Perhaps with BC Rail now a memory, we will start to see a few shortlines pop up in Nothern British Columbia, picking up the slack where CN has either given up or doesn't care.

[Anonymous]

QUOTE: Originally posted by jchnhtfd

Kindly relax and get over it. CN is a multinational, publicly held corporation. As such, it is in business to make money using capital assets. This it does, exceedlingly well.

CN is NOT, repeat NOT, in the business of providing a social service, nor is any other private corporation, either in Canada or the United States (or the United Kingdom, for that matter).

If the people of British Columbia (or Wisconsin, for that matter) want to have more rail service, or different rail service, it is not difficult to do: pass appropriate legislation to provide appropriate subsidies to the relevant railroad.

For reasons which I completely fail to understand, there seems to be a commonly held notion that somehow railroads should be public servants, unlike any other private corporation -- but that notion does not seem to extend to providing the money to perform the public services (see the debates over Amtrak in the US, for instance).

Lest you forget, ALL the Canadian and Western U.S. railroads received more than their fair share of government aid. This forever requires from them a certain level of social services, unless and until they pay back every penny (plus interest) of subsidy and every single acre of land they were granted (or the cash equivalent, plus interest). If you do not accept this and understand this, and continue to ply the myth of the railroads being "just like every other private corporation", then you are in serious default of perceptive and cognitive abilities.

If certain states and/or provinces want decent rail service, they would be much better off developing their own rail systems independent of the Class I oligarchy. The Class I oligarchy is charged by their global investment firm owners to squeeze every red cent out of the property ASAP, wherein once the property is no longer functional, they will abandon the industry altogether and re-invest in other non-rail properties. Why should BC, Wisconsin, or any other regional body tie any future investment into a massive sinking ship, other than the fact that the typical elected official is void of the understanding of how corporate raidership works.

[CSSHEGEWISCH]

Keep in mind that if land grants, both federal and state, did not exist, it is quite probable that it would have taken a lot longer for most Western railroads to be built. Also, the Great Northern Railway was built without any land grants.

I find it amazing to find that people still use the land-grant issue as a reason to justify the forced continuance of unprofitable services,.

[SALfan]

All of this is according to memory, so take that bucket of salt before accepting what I say as correct (although I do believe it to be correct). Anyone with ACTUAL knowledge, please correct me if I'm wrong.

For many years after they were built, the U.S. government required railroads which had received land grants to haul government freight at reduced rates, asa form of repayment for the grants. Shortly after World War II, the government ended that practice, recognizing that the RR's had more than "paid for" the land grants through the reduced freight rates.

[jchnhtfd]

QUOTE: Originally posted by CSSHEGEWISCH

Keep in mind that if land grants, both federal and state, did not exist, it is quite probable that it would have taken a lot longer for most Western railroads to be built. Also, the Great Northern Railway was built without any land grants.

I find it amazing to find that people still use the land-grant issue as a reason to justify the forced continuance of unprofitable services,.

[#ditto] -- and also JOdom's (I can't figure out how to quote both of you at once!).

Mark Hintz has excellent comments. Seems to me that it is very possible that the optimum model for rail transportation is one which sees a few -- quite likely the big 6 we have now! -- big haulers, fed by a good network of regionals and short lines. The two kinds of business are very different in character, and require different equipment, management styles, and everything. Some of the regionals or short lines might be quasi-governmental agencies in an area; some might be co-ops; some might be for-profit enterprises -- whatever works in the area. Some might operate at least part of the time on trackage rights on one of the majors (some do anyway).

I'm not sure that the big guys actively discouraged businesses from using rail service, although in some cases (particularly in the eastern US) I suspect they did. What did -- and still does -- happen, though, is that the big fellows usually aren't set up to provide the kind of flexible immediate response that many industries require. As Mark said, they are great at hauling a lot of stuff from point to point, but not so great on setting out one boxcar a week at some industry. The short lines and regionals, on the other hand, are.

Wisconsin has done some good things along these lines, seems to me.

The one other comment I would make (right now, anyway!) is that progress will be made, but not by complaining and forcing. That never works well.

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

Keep in mind that if land grants, both federal and state, did not exist, it is quite probable that it would have taken a lot longer for most Western railroads to be built. Also, the Great Northern Railway was built without any land grants.

I find it amazing to find that people still use the land-grant issue as a reason to justify the forced continuance of unprofitable services,.

The St. Paul & Pacific, the original predecessor to the eventual Great Northern, received land grants totalling nearly 3 million acres. This was more than enough to put the financing of the Great Northern's construction on solid footing. Without that original land grant, the Great Northern would have never existed. If building cross country railroads without any government aid was possible, then a railroad to Alaska would have been built long ago. The only reason we have railroads from the MIdwest to the Pacific Coast but not to Alaska is that the former had land grants, the latter had (has) none.

You also need to differentiate between the regional service responsibilities that came with the land grants and what is de facto "unprofitable" rail service. If it loses money, it is unprofitable. If it returns more in income than it costs in liabilities, it is profitable. What CN and the others are doing is setting minimum profit levels and using that yardstick to determine which lines get lopped. None of the Wisconsin or BC lines were money losers, they just didn't make enough compared to CN's other lines.

Railroads are utilities, make no mistake about it. Rail lines, power lines, pipelines, all are part of the nation's infrastructure network, and as such governments need to take actions to prevent that infrastructure from being canaballized and/or short circuited. And utilities are charged with providing their service to both urban and rural customers. If the electric utilities behaved like the Class I's, they'd stop service to rural customers and focus soley on urban customers, because the maintenance costs of serving rural customers are higher than those for serving denser populations.

This idea of railroads being just like any other business is ridiculous.

[fuzzybroken]

QUOTE: Originally posted by macguy

I suppose with all of this large railway consolidation we really are seeing more and more regionals popping up, and in all that's really a better situation.

Though we lose some railways, other smaller ones are gained, and what's most important is that no matter who is serving the customer, the customer IS being served BY RAIL, is happy, and rail cars are moving back and forth.

Perhaps with BC Rail now a memory, we will start to see a few shortlines pop up in Nothern British Columbia, picking up the slack where CN has either given up or doesn't care.

Well, that's what we would hope anyways. From what I see, the rail network has just about squeezed all the secondary lines off the mainlines they possibly can. The regionals and shortlines that currently exist will probably not see many more additions to their numbers, as all that seems to be left is the mainlines and the branches to the major customers, and the Class 1s won't let those go!!!

Hopefully I'm wrong about this. Hopefully CN (and the other roads) will ease the stranglehold they have placed on some of their would-be customers, and allow new operators to take over the lines or the service to these spurned customers. There are far too many spurs that are no longer in service to too many customers.

-Mark

[andrewjonathon]

The problem with comparing the customers that a shortline, such as WSOR, will serve with the customers a Class 1 like CN will serve is that shortlines have a very different cost structure. What may be a money loser for CN may very well be profitable for a shortline like WSOR. Maybe Class 1's should consider contracting out online switching to shortlines similar to how airlines contract out food preparation and airline maintenance etc.