WATCO abandoning service on Washington State owned lines! (read: BNSF does it again!)

[Anonymous]

WATCO is giving up on plans to sell one Washington State branch line (the Cheney to Coulee City ex-NP line) to the State, opting to file for abandonment altogether on that line, and is giving up the operating rights over the Marshall-Pullman ex NP line that the State already has purchased.

http://www.aginfo.com/reportView.cfm?recordid=5635

WATCO will continue to operate the ex-UP line from Hooper to Pullman/Moscow as part of it's Palouse & Coulee City (PCC) shortline. Seems UP does a good job of getting car orders when they are needed, and also allows the PCC to operate short haul grain shuttles over UP tracks from Hooper to the barge port at Wallula on the Columbia River. By contrast, BNSF has been a poor mentor for the ex BN lines operated under the PCC banner, and WATCO I guess has just become to fed up with BNSF's poor business practices to continue to operate those lines. Seems BNSF prefers that grain be trucked over State and county roads to it's shuttle elevator in Ritzville rather than having carloads and small car lots interchanged with BNSF in Cheney or Marshall.

It is somewhat ironic in that at the time of the sale to WATCO, the ex-UP lines were in the worst shape, while the ex BN Marshall line was in great shape (due to a 1970's rebuild of the entire line for future shorthaul grain shuttles to Lewiston ID, an idea scrapped a few short years later due to a management change at BN). Yet it is the UP that is providing the car orders in expedient fashion, while BNSF won't.

I guess the lesson is this: If you are a state or local government body looking to purchase a shortline whose only interchange is with BNSF, you're better off letting it go, because you'll buy the line only to have the operator give up anyway and send all that freight to your state and county roads anyway, e.g. it won't pay to do so. If the shortline connects with UP, go ahead and buy the line, it will pay to do so.

[kenneo]

If WATCO would handle 110 car grain trains, the BN would be johnny on the spot ---- to take the RR back!!!!!

I'm not a bit suprised.

[bobwilcox]

It is the evil BNSF again or is that just a "guess".

[edblysard]

I think it is the evil, monopolistic, captive shipper, anti open access BNSF making bad business decisions that only benefit BNSF instead of the grain shippers...this is after failing in their moral debt to the public, stealing all that free land through abusing government land grants, and failing to rebuild the Milwaukee Road...

Of course, it could just be that lose car load railroading , outside of heavy industrial hubs/locations, is a thing of the past, and no one wants the expense of dispatching a crew and locomotives to gather up five and ten grain cars from a bunch of elevators scattered all over the place...
Ed

[Anonymous]

Do the math....5 grain cars. What does a 140 ton car cost to ship? Figure a three man crew on a basic yard day. Approx $500- $550 in just wage, no arbitraries. Fuel. An engine or two (which we are power short these days). Storage space if there is to be a unit train built or switching if it will go on a junker. Time to spot the cars once delivered. Where is the profit?

[MichaelSol]

QUOTE: Originally posted by ironken

Do the math....5 grain cars. What does a 140 ton car cost to ship? Figure a three man crew on a basic yard day. Approx $500- $550 in just wage, no arbitraries. Fuel. An engine or two (which we are power short these days). Storage space if there is to be a unit train built or switching if it will go on a junker. Time to spot the cars once delivered. Where is the profit?

Perhaps from the higher rate charged?

Best regards, Michael Sol

[daveklepper]

Very sad news, at least they ought to bank the line!

[CSSHEGEWISCH]

The issue that FM and others have not mentioned is: What is the traffic volume on the line to be abandoned?

[jchnhtfd]

QUOTE: Originally posted by edblysard

I think it is the evil, monopolistic, captive shipper, anti open access BNSF making bad business decisions that only benefit BNSF instead of the grain shippers...this is after failing in their moral debt to the public, stealing all that free land through abusing government land grants, and failing to rebuild the Milwaukee Road...

Of course, it could just be that lose car load railroading , outside of heavy industrial hubs/locations, is a thing of the past, and no one wants the expense of dispatching a crew and locomotives to gather up five and ten grain cars from a bunch of elevators scattered all over the place...
Ed

Ed -- do I detect a tongue firmly planted in cheek here? I hope?[:p]

[edblysard]

If I chew, I am in big trouble!
The rub is the shippers want to pay the same rate for the ten or 25 car pickup as the big elevators pay for the 120 car load out that can turn a unit train in about 3 or 4 hours...

If you add up the cost of gathering them all up, dedicating a few yard tracks to build a train in, pay a road crew(s) to go get all these short, small cuts, and drag them to a yard, then pay a yard crew(s) to build the train...any profit to the railroad disappears long before the yard crews get to touch the cars.

Of course, this entire post is a prelude to Dave pitching his version of open access, again, and somehow trying to make it economical to move five 25 cars trains across the country as opposed to a single 120 car unit train....forgetting all the time that railroads are experts at squeezing every dime out of every move, so if it could be done cheaper for the railroad to move the short ones, they already would be doing so.

Ed

[TomDiehl]

QUOTE: Originally posted by jchnhtfd

QUOTE: Originally posted by edblysard

I think it is the evil, monopolistic, captive shipper, anti open access BNSF making bad business decisions that only benefit BNSF instead of the grain shippers...this is after failing in their moral debt to the public, stealing all that free land through abusing government land grants, and failing to rebuild the Milwaukee Road...

Of course, it could just be that lose car load railroading , outside of heavy industrial hubs/locations, is a thing of the past, and no one wants the expense of dispatching a crew and locomotives to gather up five and ten grain cars from a bunch of elevators scattered all over the place...
Ed

Ed -- do I detect a tongue firmly planted in cheek here? I hope?[:p]

Of course Jamie. Funny but the link led me to an article that said: "On the lines its ending service on Watco says it can’t compete for grain shipments against trucks to river barge and grain trucked to a 110-car rail shuttle facility at Ritzville."

"Can't compete against truck and river barges" has a bit of a different meaning than "BNSF being a poor mentor."

I didn't even see BNSF, or any connecting railroad, even mentioned. I must have linked to a different article than the one mentioned in the original post.

[Anonymous]

In addition to the BLMR/PCC shuttle which runs on UP between Hooper Junction and Wallula, there are cuts of grain left at Hooper Junction for UP to pick up. The same scenario takes place on BNSF at Cheney and Marshall. Car counts vary throughout the shipping season. What's markedly different is that a UP train doing work at Hooper Junction might delay just one or two other trains ahead of or behind it. (In many cases, the train doing the work will be scheduled behind other trains so as not to cause such delays.) On BNSF, however, doing work off the main at Marshall or Cheney can back up a large number of trains during peak traffic. The option of two main tracks at Marshall is only slight help when there's traffic coming both directions. For BNSF, it's easy money grabbing a couple of cuts of grain without actually having to work the branch and switch the elevators. But that money can not balance the loss when you've got Z, Q, and S trains held up in the process.

[MichaelSol]

QUOTE: Originally posted by edblysard

... and somehow trying to make it economical to move five 25 cars trains across the country as opposed to a single 120 car unit train....

Using typical rates for 1-25 car movements and typical shuttle rates over the past five years, and a Shelby to Portland move, crew cost for four short trains represents approximately 13.4% of the total cost of a 785 mile move, and for a shuttle train, represents 3.7%.

In both cases labor is obviously a small portion of the total cost of labor, equipment and fuel. Because of the rate differential, however, the four short trains generate 170.7% revenue of the direct variable cost of the service, while the shuttle only generates 169.7% revenue of the direct variable cost of the service, even though its labor costs are considerably cheaper.

As a specific for instance, four short trains, 112 carloads, generates $343,392 in gross revenue, while the shuttle, 112 carloads, generates $304,192 in gross revenue.

For each additional day that the shuttle takes to reach its destination, deduct approximately 1.2% from the revenue to the direct variable cost of service percentage.

If, for any reason the shuttle is slower than the shorter trains, the railroad loses more money by comparison at the 1.2% rate for each additional day. Current average grain train car cycle time, BNSF, suggests a percentage of approximately 164.7%. for shuttle trains. In order to achieve the same profitability of the four shorter trains, the shuttle will have to arrive in Portland two days earlier than the four short trains.

Unlikely.

In theory, shuttle trains should be more economical than four separate, shorter trains. They are indeed more "economical." However, achieving lowest operating cost is not the same thing as maximizing profitability.

On an annual basis, four short trains beating a unit train by only day on each cycle generates a profit in excess of $1 million over the unit train.

If you see "profit" as a more useful measure than "economical," the four short trains are probably the way to go.

Best regards, Michael Sol

[Anonymous]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by jchnhtfd

QUOTE: Originally posted by edblysard

I think it is the evil, monopolistic, captive shipper, anti open access BNSF making bad business decisions that only benefit BNSF instead of the grain shippers...this is after failing in their moral debt to the public, stealing all that free land through abusing government land grants, and failing to rebuild the Milwaukee Road...

Of course, it could just be that lose car load railroading , outside of heavy industrial hubs/locations, is a thing of the past, and no one wants the expense of dispatching a crew and locomotives to gather up five and ten grain cars from a bunch of elevators scattered all over the place...
Ed

Ed -- do I detect a tongue firmly planted in cheek here? I hope?[:p]

Of course Jamie. Funny but the link led me to an article that said: "On the lines its ending service on Watco says it can’t compete for grain shipments against trucks to river barge and grain trucked to a 110-car rail shuttle facility at Ritzville."

"Can't compete against truck and river barges" has a bit of a different meaning than "BNSF being a poor mentor."

I didn't even see BNSF, or any connecting railroad, even mentioned. I must have linked to a different article than the one mentioned in the original post.

Tom,

WATCO via the PCC currently runs (1)the ex-UP branch from Hooper Junction (on the UP "Washy" mainline) to Pullman and Moscow in the wheat country called "The Palouse", (2) the ex-BN line from Marshall (near Spokane on the BNSF mainline to Pasco) to Pullman/Moscow, and (3) the ex-BN line from Cheney (near Spokane) to Coulee City through the "Big Bend" wheat country. You should note that it is only the ex-BN lines that are "not profitable" for WATCO to run, while the ex-UP line is generating some nice profits. You should also note that WATCO works in conjunction with the barge lines by running grain trains west to Hooper then onto the UP Washy mainline to the barge port at Wallula, or else they transfer those grain shuttles to UP for the trip on to the lower Columbia River deep water ports.

Clearly, the problem is one of willing car supply - UP does a good job of getting to the PCC the necessary cars in expedient fashion, and picking them up as well. Subsequently, those elevators located on the ex-UP lines are able to ship grain by rail at competitive prices with the local truck/barge option. BNSF on the other hand has been a poor supplier of requested cars. Consequently, those elevators on the ex BN lines have had to truck their grain to the nearest mega terminal (Ritzville for the Coulee City line). The elevators on the ex-BN Marshall line are either trucking their grain down to the barge port at Lewiston or Almota on the Snake River, or in some cases are trucking their grain to elevators on the ex-UP lines, even though the ex-BN and ex-UP lines interconnect in Pullman!

What is being missed by some is the gist of the conundrum for the State of Washington. The State went to all this trouble to purchase the PCC lines with the thought that by doing so they could keep rail service on those lines viable and keep trucks off State and county roads. Then BNSF refuses to provide the promised service levels for their former share of the State purchased lines, forcing grain to be trucked over State and county roads anyway. Clearly, it was a wasted effort for the State to have any dealings with property formerly owned by BNSF, while it is turning out beautifully for the ex-UP lines.

Some of you have stated in other threads that (paraphrasing) "if states and localities want to keep lines from being abandoned they should put their money where their collective mouth is and buy the lines themselves." Well, the State of Washington did just that, and got burned.

At this point, the best thing the State could do would be to go ahead and buy the Coulee City line, then physically connect the Coulee City line to the Marshall line (bypassing any interchange with BNSF) and allow grain trains to be run down to interchange with the UP, or even better - continue to build a new line that connects the Palouse lines to the local barge ports, thereby capturing almost all grain hauls from the truckers in that corridor. If BNSF threatens lawsuit, then the State shoud use it's power to countersue on the grounds of non-compliance with the caveats of the purchase regarding car supply. Then the state should take out the road crossing that allows trucks to access the Ritzville mega terminal under the guise of the crossing removal program![}:)]

[Anonymous]

QUOTE: Originally posted by CSSHEGEWISCH

The issue that FM and others have not mentioned is: What is the traffic volume on the line to be abandoned?

Actual, historical, or potential? Actual is dependent on willing car supply from the connecting Class I's, historical is an indicator of customers lost due to the usual shenanigans of railroads over the years, while potential is based on what would move on the lines in a normal scenario if car supply/bottlenecks/et al could be ameliorated.

Since BNSF isn't willing to supply cars when WATCO desires them, it is logical that traffic volumes will be low. If BNSF supplied the cars when needed, volumes would be high enough to allow the operator to make money on the enterprise (after all, the State is footing the bill for track maintenance!), as witnessed by the car supply from UP and subsequent higher traffic volumes on the ex-UP lines. Are you willing to use circular reasoning to suggest a chicken and egg justification for potential abandonment?

[Murphy Siding]

QUOTE: Originally posted by futuremodal
The State went to all this trouble to purchase the PCC lines with the thought that by doing so they could keep rail service on those lines viable and keep trucks off State and county roads. Then BNSF refuses to provide the promised service levels for their former share of the State purchased lines

You make it sound as if the state would have grounds for a lawsuit. I mean, they did get get this *promised service levels* issue in writing? Right?[}:)]

[Anonymous]

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal
The State went to all this trouble to purchase the PCC lines with the thought that by doing so they could keep rail service on those lines viable and keep trucks off State and county roads. Then BNSF refuses to provide the promised service levels for their former share of the State purchased lines

You make it sound as if the state would have grounds for a lawsuit. I mean, they did get get this *promised service levels* issue in writing? Right?[}:)]

Actually, it's a little more tricky than that, and Gabe could do a better job of explaining the legallese involved in such situations, but my understanding is thus:

When WATCO bought the ex-BN lines from BN, BN is alleged to have made certain car supply promises, which I am told is normal SOP for such line sales, otherwise the potential short line buyer would walk. Of course, the information is confidential, so then WATCO turned and sold the trackage to the State while maintaining operating rights, WATCO retained the contractual rights and obligations of the original sale. And now that WATCO wants out of operating rights altogether, the State would probably have to get a court order to see what is contained in the original sales contract. Without that, the State can only go on hearsay when calculating what BNSF did or did not promise in terms of guaranteed car supply to WATCO, and hearsay usually won't hold up in court! And WATCO probably is too afraid of retribution from BNSF on it's hundreds of other shortlines throughout North America to bring forth this info themselves.

AKA, it's all probably in legal limbo right now!

[TomDiehl]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal
The State went to all this trouble to purchase the PCC lines with the thought that by doing so they could keep rail service on those lines viable and keep trucks off State and county roads. Then BNSF refuses to provide the promised service levels for their former share of the State purchased lines

You make it sound as if the state would have grounds for a lawsuit. I mean, they did get get this *promised service levels* issue in writing? Right?[}:)]

Actually, it's a little more tricky than that, and Gabe could do a better job of explaining the legallese involved in such situations, but my understanding is thus:

When WATCO bought the ex-BN lines from BN, BN is alleged to have made certain car supply promises, which I am told is normal SOP for such line sales, otherwise the potential short line buyer would walk. Of course, the information is confidential, so then WATCO turned and sold the trackage to the State while maintaining operating rights, WATCO retained the contractual rights and obligations of the original sale. And now that WATCO wants out of operating rights altogether, the State would probably have to get a court order to see what is contained in the original sales contract. Without that, the State can only go on hearsay when calculating what BNSF did or did not promise in terms of guaranteed car supply to WATCO, and hearsay usually won't hold up in court! And WATCO probably is too afraid of retribution from BNSF on it's hundreds of other shortlines throughout North America to bring forth this info themselves.

AKA, it's all probably in legal limbo right now!

And again, you seem to be reading "information" that's not in the article. And you are the one that supplied the link.

You are "supposing" that the BNSF is not living up to the contractual obligations to supply empty cars on a timely basis. If the contract is to be disputed by either party, the terms won't be confidential once it hits the courts. And if the state can prove "involved party," they'll be able to get the contract terms spell out and made public. You're making an assumption because the WATCO Company no longer wants to be the operator of the line. Again, I see no mention of shipping volume. Remember, railroads achieve their best efficiency when hauling larger quantities of freight. Smaller quantities would be more efficient to haul by truck, a point your assumption doesn't even view as a remote possibility.

Sounds more like you have a vendetta against BNSF.

[Anonymous]

Well Tom, I live right in the midst of the PCC network, and I have had conversations with PCC employees, so I know a little more about it than the average outsider. There's certainly more to the story than the link I posted, as more mainstream news sites pick up the story I'll try and post them for you so you'll have a clearer picture. Suffice to say my suspicions and critizisms of BNSF usually end up being vindicated.

One has every right to question BNSF's motives in indirectly building a brand new grain shuttle loader for 110 car unit trains that are moving that grain less than 300 miles, when there are already plenty of large elevators with sidings right next to the BNSF mainline. Was the capital cost of the 110 car facility justified in light of established elevators having multicar loading capabilities? Is it worth it to **** off every single one of the elevators all along the BNSF mainline, denying them all service now, when most of those elevators are owned in whole or in part by the area grain growers themselves? Does BNSF really think the area grain growers will screw themselves out of their shares of ownership in those online elevators just to take advantage of the alleged "efficiencies" of 110 car shuttle operations. Wouldn't BNSF have been better off simply converting the existing elevators into shuttle facilities?

You should also know that BN spent a lot of money to upgrade the Marshall line in the late 1970's all the way down to Lewiston in anticipation of running shuttles down there, only to do a 180 and embargo the last 30 miles of the line, choosing then to build a brand new 26 car grain loader in Fallon, only to give up on that when the line sale was finalized, of course first taking the precaution of ripping out that last 30 miles to Lewiston to keep all Palouse rail traffic interchanged at Marshall, only to forego any meaningful Marshall interchange...............

It's not a "vendetta" as you alleged, more like a case study in why monopolistic entities can get away with making nominally wasteful business decisions. BNSF continues to amaze me in so many ways, and it's a wonder how much longer they can keep up this line of behaviour before it bites them in the FRED.

[kenneo]

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal
The State went to all this trouble to purchase the PCC lines with the thought that by doing so they could keep rail service on those lines viable and keep trucks off State and county roads. Then BNSF refuses to provide the promised service levels for their former share of the State purchased lines

You make it sound as if the state would have grounds for a lawsuit. I mean, they did get get this *promised service levels* issue in writing? Right?[}:)]

Actually, it's a little more tricky than that, and Gabe could do a better job of explaining the legallese involved in such situations, but my understanding is thus:

When WATCO bought the ex-BN lines from BN, BN is alleged to have made certain car supply promises, which I am told is normal SOP for such line sales, otherwise the potential short line buyer would walk. Of course, the information is confidential, so then WATCO turned and sold the trackage to the State while maintaining operating rights, WATCO retained the contractual rights and obligations of the original sale. And now that WATCO wants out of operating rights altogether, the State would probably have to get a court order to see what is contained in the original sales contract. Without that, the State can only go on hearsay when calculating what BNSF did or did not promise in terms of guaranteed car supply to WATCO, and hearsay usually won't hold up in court! And WATCO probably is too afraid of retribution from BNSF on it's hundreds of other shortlines throughout North America to bring forth this info themselves.

AKA, it's all probably in legal limbo right now!

Let me wager a couple of months wages here -- SOP for such line sales and/or leases for the SP's and BN's of the world is captive traffic clauses. That means that traffic originating or terminating on the shed lines must, without fail, be interchanged with the original owner - just as if the shed line were still operating as a branch of its original owner. That means that Coulee City traffic goes PCC-BNSF, Marshall traffic goes PCC-BNSF and Moscow traffic goes PCC-UP. If this were not so, I really think that the PCC and W-DOT would have the cars going PCC-Pullman-PCC-Hooper-UP.

What the BNSF has done is to shed lines that the BN does not wi***o operate but does want to have the traffic from/to. They get rid of all costs and keep all revenues (that they can). They can't simply contract out with a private switch crew for the service because of scope rules, so they do the next best thing. To maximize their effort (cost cutting) the provide only what a court or regulatory agency forces them to do. And the little short line can't afford to do that for business and financial reasons.

PCC could, in theory, buy covered hoppers for their customers, but since the grain won't be travelling in BN supplied equipment, the BN is not obligated to provide the rate and division agreeded to in the purchase contract.

The W-DOT can fix the situation, but it probably would take the STB and definetly a court action backed up by a "obey or we shut you down" order against BNSF. It would take at least five things - cancelling of the restricted interchange clauses, accounting any PCC owned or leased rail equipment as "home-road supplied" for rate purposes, through routing for traffic off the "foreign road" to the "home road" (traffic off ex-NP lines can interchange at Pullman to the PCC for delivery to UP and traffic off ex-UP lines can interchange with the BNSF at Marshall or at Cheney via Pullman), lost business opportunity penalties to be paid by the line-haul carrier for car supply and service failures, and all local traffic is exempt from any service, rate or routing interference by the BN or UP.

[TomDiehl]

QUOTE: Originally posted by futuremodal

Well Tom, I live right in the midst of the PCC network, and I have had conversations with PCC employees, so I know a little more about it than the average outsider. There's certainly more to the story than the link I posted, as more mainstream news sites pick up the story I'll try and post them for you so you'll have a clearer picture. Suffice to say my suspicions and critizisms of BNSF usually end up being vindicated.

One has every right to question BNSF's motives in indirectly building a brand new grain shuttle loader for 110 car unit trains that are moving that grain less than 300 miles, when there are already plenty of large elevators with sidings right next to the BNSF mainline. Was the capital cost of the 110 car facility justified in light of established elevators having multicar loading capabilities? Is it worth it to **** off every single one of the elevators all along the BNSF mainline, denying them all service now, when most of those elevators are owned in whole or in part by the area grain growers themselves? Does BNSF really think the area grain growers will screw themselves out of their shares of ownership in those online elevators just to take advantage of the alleged "efficiencies" of 110 car shuttle operations. Wouldn't BNSF have been better off simply converting the existing elevators into shuttle facilities?

You should also know that BN spent a lot of money to upgrade the Marshall line in the late 1970's all the way down to Lewiston in anticipation of running shuttles down there, only to do a 180 and embargo the last 30 miles of the line, choosing then to build a brand new 26 car grain loader in Fallon, only to give up on that when the line sale was finalized, of course first taking the precaution of ripping out that last 30 miles to Lewiston to keep all Palouse rail traffic interchanged at Marshall, only to forego any meaningful Marshall interchange...............

It's not a "vendetta" as you alleged, more like a case study in why monopolistic entities can get away with making nominally wasteful business decisions. BNSF continues to amaze me in so many ways, and it's a wonder how much longer they can keep up this line of behaviour before it bites them in the FRED.

Not much of a question as to the motive BNSF had in doing that. Increased efficiency in the grain collecting and shipping system. How many cars did one of the older elevators ship a day? The cost of collecting smaller quantities of cars from smaller elevators and loading facilities will take the cost of shipping the grain UP, not down. By having trucks do the short haul (from farm to loading facility) to a larger capacity facility, they are playing to the efficiencies of the different modes. Trucks are more efficient in short haul, small shipment situations. Rail is more efficient in long haul, large shipments. These efficiencies of scale aren't "alleged," they're well documented. Do you think a potential new rail service provider will want to build lines into all the smaller elevators, or will they want to build a large 100+ car facility, served by one spur? Would it have been cheaper to have BNSF give a subsidy to the smaller elevators to upgrade their facilities? What advantage would it have been to the railroad? As a for-profit company, BNSF, or any railroad, would have to see a return on investment in a reasonable amount of time, either in larger shipping quantities, or reduced costs.

The amount spent in upgrading a line over 30 years ago has probably been written off the financial books long ago, and has deteriorated back to the pre-upgrade level. Rail facilities don't last forever, and exposed to the weather in that part of the country, it DEFINATELY don't last.

Rail lines ripping out low use tracks to prevent competition is nothing new. Locally, several years ago Conrail ripped out a section of the line known as the Lackawanna Cutoff through northern New Jersey to prevent sale to a competetor. It would have competed with the old New York Central water level route into NYC. Now they want to use it for commuter rail service, and have to rebuild it. And I'm sure that wasn't a new idea when Conrail did that.

I've still seen nothing that indicates BNSF is doing anything that another corporation won't do.

[Anonymous]

If grain from the Marshall line (aka the P&L) is now either being trucked to barge terminals or to the Templin Terminal in Ritzville as stated above, does that mean they no longer load blocks of PCC/Washington State Grain Train cars at Plaza, Oakesdale, and other places on the P&L? If they built a connection from the Coulee City line (aka the CW) to the P&L, as was also stated above, in order to connect with UP instead of BNSF, do you really think the additional 145-plus miles of slow, short line routing would be beneficial? (That's more than the entire length of the CW itself.) Don't forget that this longer routing would also put a 3% grade west of Colfax in the face of all those grain loads.

[kenneo]

QUOTE: Originally posted by TomDiehl

Not much of a question as to the motive BNSF had in doing that. Increased efficiency in the grain collecting and shipping system. How many cars did one of the older elevators ship a day? The cost of collecting smaller quantities of cars from smaller elevators and loading facilities will take the cost of shipping the grain UP, not down. By having trucks do the short haul (from farm to loading facility) to a larger capacity facility, they are playing to the efficiencies of the different modes. Trucks are more efficient in short haul, small shipment situations. Rail is more efficient in long haul, large shipments. These efficiencies of scale aren't "alleged," they're well documented. Do you think a potential new rail service provider will want to build lines into all the smaller elevators, or will they want to build a large 100+ car facility, served by one spur? Would it have been cheaper to have BNSF give a subsidy to the smaller elevators to upgrade their facilities? What advantage would it have been to the railroad? As a for-profit company, BNSF, or any railroad, would have to see a return on investment in a reasonable amount of time, either in larger shipping quantities, or reduced costs.

The amount spent in upgrading a line over 30 years ago has probably been written off the financial books long ago, and has deteriorated back to the pre-upgrade level. Rail facilities don't last forever, and exposed to the weather in that part of the country, it DEFINATELY don't last.

Rail lines ripping out low use tracks to prevent competition is nothing new. Locally, several years ago Conrail ripped out a section of the line known as the Lackawanna Cutoff through northern New Jersey to prevent sale to a competetor. It would have competed with the old New York Central water level route into NYC. Now they want to use it for commuter rail service, and have to rebuild it. And I'm sure that wasn't a new idea when Conrail did that.

I've still seen nothing that indicates BNSF is doing anything that another corporation won't do.

Tom

It's not any vendeta on BN's part except - it's plain stupidity, stiff-necked stupidity - except the pulling-up that part of the Marshall (P&L) line.

It will cost the BN the same or possibily less to supply the cars to tthe PCC than to build and operate the Ritzville facility, so it's not an economic decision as you say.

It's politics and "power play" on the part of some who have "power" and insist on doing things their way whether it's the correct way or not.

[Anonymous]

QUOTE: Originally posted by Clemente

If grain from the Marshall line (aka the P&L) is now either being trucked to barge terminals or to the Templin Terminal in Ritzville as stated above, does that mean they no longer load blocks of PCC/Washington State Grain Train cars at Plaza, Oakesdale, and other places on the P&L? If they built a connection from the Coulee City line (aka the CW) to the P&L, as was also stated above, in order to connect with UP instead of BNSF, do you really think the additional 145-plus miles of slow, short line routing would be beneficial? (That's more than the entire length of the CW itself.) Don't forget that this longer routing would also put a 3% grade west of Colfax in the face of all those grain loads.

Yep, that 3% (albeit short) grade west of Colfax has been a problem, but not for westbound trains. It is the eastbound (downhill) trains that have had problems of late. Remember, we're not talking about 110 car unit trains here, rather 25 car (at most) shuttle trains, so if the head end power is sufficient, the 3% isn't a problem uphill.

Whether the 145 miles of extra distance is a problem may also be moot, since the Coulee City to Cheney line runs west to east, while grain is moving south and west. At one time the Coulee City line ran south of Coulee City down to Connell where it reconnected to the BN mainline, but for reasons that escape me when BN was looking for lines to chop, they took out the logical connection to the Coulee City high line in deference to the illogical connection at Cheney. Don't ask me why!

That being said, is it "inefficient" to haul grain 145 miles out of the way compared to trucking that same grain 50 miles? If rail is 4 times as efficient as trucking, wouldn't the railroad have to run at least 200 miles out of the way to be comparable to a 50 mile truck haul?

What I suggest the State do is to connect all the State owned lines in such a way as to be independent of forced interchange with either BNSF or UP, e.g. State grain trains could interchange with UP or BNSF if the price is right, but they wouldn't be totally dependent on that option. The way to do this is to build a rail connection down to the nearest Snake River barge port, allowing for rail to barge transload for grain exports if for some reason BNSF and UP can't or won't supply the cars or pick them up onto their networks.

Another question that begs investigation: If it makes sense for BNSF to build and operate the 110 car shuttle facility at Ritzville (the Templin Terminal) for a short haul to the coast, why hasn't UP also built a similar facility on it's Washy line rather than handling the various carloads off of PCC? Come to think of it, building a 110 car grain facility in Hooper would make sense, especially if it was designed to also unload the lighter hoppers off the PCC into the mainline hoppers on the UP.

Just for the record, I had suggested that BNSF allow PCC trains to access directly the Templin facility by rail over BNSF's mainline via Marshall, wherein the PCC cars could either be added to the shuttle train consist or the PCC cars could be unloaded in deference to the BNSF shuttle cars. Makes a lot more sense than having truckers haul the grain to Ritzville. In fact, I introduced this idea to the TRAINS mag staff a while back, and yada yada yada Larry Kauffman no longer writes for TRAINS! Hmmmm.....

[kenneo]

QUOTE: Originally posted by Clemente

If grain from the Marshall line (aka the P&L) is now either being trucked to barge terminals or to the Templin Terminal in Ritzville as stated above, does that mean they no longer load blocks of PCC/Washington State Grain Train cars at Plaza, Oakesdale, and other places on the P&L? If they built a connection from the Coulee City line (aka the CW) to the P&L, as was also stated above, in order to connect with UP instead of BNSF, do you really think the additional 145-plus miles of slow, short line routing would be beneficial? (That's more than the entire length of the CW itself.) Don't forget that this longer routing would also put a 3% grade west of Colfax in the face of all those grain loads.

What we are talking about here is survival. In economic terms, the "reroute" would be a bad decision, but by doing this with the BN's attitude here, it means staying in business or quitting. What the BN is doing is quite simply putting the PCC out of business by providing just enough cost cuts to kill off the PCC (something they can not do if they still own the lines) and not supplying the necessary equipment, and then when they have "done their deed", raise the rates. If you don't believe this, take a look at Montana grain rates and service structure compared to where BN has competition.

To be sure, it's more complicated than this, but this is the basic attitude(s) causing the problem.

[Anonymous]

QUOTE: Originally posted by kenneo

QUOTE: Originally posted by futuremodal

QUOTE: Originally posted by Murphy Siding

QUOTE: Originally posted by futuremodal
The State went to all this trouble to purchase the PCC lines with the thought that by doing so they could keep rail service on those lines viable and keep trucks off State and county roads. Then BNSF refuses to provide the promised service levels for their former share of the State purchased lines

You make it sound as if the state would have grounds for a lawsuit. I mean, they did get get this *promised service levels* issue in writing? Right?[}:)]

Actually, it's a little more tricky than that, and Gabe could do a better job of explaining the legallese involved in such situations, but my understanding is thus:

When WATCO bought the ex-BN lines from BN, BN is alleged to have made certain car supply promises, which I am told is normal SOP for such line sales, otherwise the potential short line buyer would walk. Of course, the information is confidential, so then WATCO turned and sold the trackage to the State while maintaining operating rights, WATCO retained the contractual rights and obligations of the original sale. And now that WATCO wants out of operating rights altogether, the State would probably have to get a court order to see what is contained in the original sales contract. Without that, the State can only go on hearsay when calculating what BNSF did or did not promise in terms of guaranteed car supply to WATCO, and hearsay usually won't hold up in court! And WATCO probably is too afraid of retribution from BNSF on it's hundreds of other shortlines throughout North America to bring forth this info themselves.

AKA, it's all probably in legal limbo right now!

Let me wager a couple of months wages here -- SOP for such line sales and/or leases for the SP's and BN's of the world is captive traffic clauses. That means that traffic originating or terminating on the shed lines must, without fail, be interchanged with the original owner - just as if the shed line were still operating as a branch of its original owner. That means that Coulee City traffic goes PCC-BNSF, Marshall traffic goes PCC-BNSF and Moscow traffic goes PCC-UP. If this were not so, I really think that the PCC and W-DOT would have the cars going PCC-Pullman-PCC-Hooper-UP.

What the BNSF has done is to shed lines that the BN does not wi***o operate but does want to have the traffic from/to. They get rid of all costs and keep all revenues (that they can). They can't simply contract out with a private switch crew for the service because of scope rules, so they do the next best thing. To maximize their effort (cost cutting) the provide only what a court or regulatory agency forces them to do. And the little short line can't afford to do that for business and financial reasons.

PCC could, in theory, buy covered hoppers for their customers, but since the grain won't be travelling in BN supplied equipment, the BN is not obligated to provide the rate and division agreeded to in the purchase contract.

The W-DOT can fix the situation, but it probably would take the STB and definetly a court action backed up by a "obey or we shut you down" order against BNSF. It would take at least five things - cancelling of the restricted interchange clauses, accounting any PCC owned or leased rail equipment as "home-road supplied" for rate purposes, through routing for traffic off the "foreign road" to the "home road" (traffic off ex-NP lines can interchange at Pullman to the PCC for delivery to UP and traffic off ex-UP lines can interchange with the BNSF at Marshall or at Cheney via Pullman), lost business opportunity penalties to be paid by the line-haul carrier for car supply and service failures, and all local traffic is exempt from any service, rate or routing interference by the BN or UP.

Those are some excellent points for WSDOT to consider!

[TomDiehl]

QUOTE: Originally posted by futuremodal
That being said, is it "inefficient" to haul grain 145 miles out of the way compared to trucking that same grain 50 miles? If rail is 4 times as efficient as trucking, wouldn't the railroad have to run at least 200 miles out of the way to be comparable to a 50 mile truck haul?

What I suggest the State do is to connect all the State owned lines in such a way as to be independent of forced interchange with either BNSF or UP, e.g. State grain trains could interchange with UP or BNSF if the price is right, but they wouldn't be totally dependent on that option. The way to do this is to build a rail connection down to the nearest Snake River barge port, allowing for rail to barge transload for grain exports if for some reason BNSF and UP can't or won't supply the cars or pick them up onto their networks.

The efficiency question would also have to take the quantity of grain (how many carloads) into consideration. Remember, trucks are more efficient on smaller quantities, rail more efficient on large quantities. Also, yes, it is more efficient to truck grain 50 miles than to rail it 145 miles, using your figures above. Especially if it's "out of the way."

How much track (mileage) would the state have to build to accompli***his? How much of the right-of-way land do they own or would they have to buy? Also remember, the granger railroads of old folded up and went out of business because there wasn't enough quantity of freight to haul to offset the cost of maintaining the mileage of track they needed to haul it. The larger transloading facilities (the 110 car facilities you refer to) are more efficient because they go to the railroad's strong point, moving large quantities of freight.

[TomDiehl]

QUOTE: Originally posted by futuremodal

Another question that begs investigation: If it makes sense for BNSF to build and operate the 110 car shuttle facility at Ritzville (the Templin Terminal) for a short haul to the coast, why hasn't UP also built a similar facility on it's Washy line rather than handling the various carloads off of PCC? Come to think of it, building a 110 car grain facility in Hooper would make sense, especially if it was designed to also unload the lighter hoppers off the PCC into the mainline hoppers on the UP.

If you consider that the BNSF is a profitable railroad that keeps things flowing in most situations and that the Union Pacific has a major breakdown in service after swallowing up another railroad (remember the most recent service breakdown article in Trains Magazine) and still hasn't come up to speed after the most recent one, I'd say that BNSF is in a better position to set an example of efficient operation than UP. UP most likely doesn't have the investment capitol to build a facility like that.

[kenneo]

Tom

How are we going to define effeciency? We can have different kinds of effeciency.

For example, Coolie City to Ritzville by truck is 50 miles, by rail (after going nearly all the back to Spokane) it is 145 miles. The inefficiency is not 145 miles, but 95 miles. That relative eficiency ratio means that the railroad needs to be twice as effecient as the truck and there will be no ineffeciency. The railroads relative effeciency is 4 times that of the truck on a large volume basis, twice the 2 times needed.

Since the BN built the Ritzville facility, the cost of land, building and its construction are part of the cost structure that needs to be included into the rail rate in addition to the normal operating costs of fuel, engines, cars, crews, MofW and the normal overhead and debt service and taxes. The other facilities that are on the PCC are owned and operated by the farmer co-ops. The PCC takes care of the gathering costs.

The highest costs have been shifted to someone other than BN in that manner so setting out empties at Marshall or Cheney and then having a Pasco bound train make a pause and pick up the loads is a whole lot more effecient for the BN. And if the BN really wanted to make a Ritzville operation effecient, they could have the PCC interchange at Ritzville and the pick-ups would only need to be made at one spot and not two.

And the BN could have its "power play" cake and eat it, too, by having the rail transfer occurr at Ritzville whether by actual steel wheel interchange or by reload through the elevator. It would take a real sharp pencil, but on the surface, reloading from PCC to BN via the Ritzville elevator may actually be the most total cost effecient method. It certainly won't be much more expensive than the way BN is doing it now and probably a lot less expensive, and the car utilization opportunity costs would drop through the floor.

As of now, the farmer is accepting higher costs and lower returns to use the Ritzville Shuttle Elevator because he still must bear the costs of his rail served elevators and then also the transport charges to Ritzville, where the BN charges a higher rate (proportional on mileage). His costs would return to "normal" (along with his rate of return) if he could load at his own elevators. The farmers transportation costs to Ritzville are going to be at least 2 times the rail rate and could reach as much as 4 times (per bushel, delivered, Ritzville) when done by truck.

So, how are we to define "efficiency" here? For BN, it will probably be a wa***o slightly higher for all costs, cheaper on an operational basis; for the farmer, nothing but higher costs and lower returns; for the PCC, out of business.

True efficiency, takes into account ALL COSTS, not just for the business involved (BN), but ALL COSTS, intended and unintended, for all parties concerned. Just to name a few there are property taxes, sales taxes, business license taxes, income taxes not only for the railroad, but for the governments and businesses line-side. Remaining land owners will pay higher taxes to replace those lost taxes. All costs except for the vairable opportunity costs remain and someone must still pay them. The BN certainly will refuse even though they are the cause of the cost shifts.

As for UP's service problems, they stem from swallowing the SP whole which ended up giving them a near terminal case of "food poisioning". The problems have much less to do with UP's management style than the physical condition of the SP. The SP was going to grind to a slow halt anytime relatively soon no matter if UP came to the rescue or not. UP's management of the merger certainly played a negative part in their service, but it was a minor part compared to the part the physical condition of the SP played. And the UP is still paying that price -- it's just that the price gets smaller over time.

[kenneo]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by futuremodal

Another question that begs investigation: If it makes sense for BNSF to build and operate the 110 car shuttle facility at Ritzville (the Templin Terminal) for a short haul to the coast, why hasn't UP also built a similar facility on it's Washy line rather than handling the various carloads off of PCC? Come to think of it, building a 110 car grain facility in Hooper would make sense, especially if it was designed to also unload the lighter hoppers off the PCC into the mainline hoppers on the UP.

If you consider that the BNSF is a profitable railroad that keeps things flowing in most situations and that the Union Pacific has a major breakdown in service after swallowing up another railroad (remember the most recent service breakdown article in Trains Magazine) and still hasn't come up to speed after the most recent one, I'd say that BNSF is in a better position to set an example of efficient operation than UP. UP most likely doesn't have the investment capitol to build a facility like that.

The UP has the capitol. They also don't have the swelled heads that can't see reality byond their own ideas. They haven't built a shuttle terminal at Hooper (or anywhere else) because it is more efficient to have the PCC (and other short-line spin-offs) do the work. The UP just makes a set-out and a pick-up. The relative return is greatest and probably the actual return is also.