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

[Anonymous]

Tom,

You are the only person I know who can be given a straight answer to a question, only to claim that the question has not been answered.

You ask and re-ask for a connection between the news article and BNSF, (paraphrasing) "'cause the article doesn't mention BNSF, so how do you know BNSF is involved in WATCO's decision to pull up?" Well, for the umteenth time, THE LINE IN QUESTION IS EX-BNSF, SOLD BY BNSF TO WATCO WITH A CONTRACTUAL AGREEMENT THAT ONLY BNSF CAN SUPPLY CARS TO THE LINE'S SHIPPERS. You have to have more the 5 brain cells to make the connection between WATCO's service problems and the fact that BNSF is the sole determinant of what level of service is provided on this line. I assume you have more than 5 brain cells, please don't prove me wrong.

You ask and re-ask what the quantity of traffic is on the line in question. I tell you "Usually once a week, 10 to 25 cars at a time." You then ask "How often is 'usual?'" I suppose I should be grateful that you haven't (yet) asked "How often is once a week?"

Let me take a wild guess, but are you one of those guys that dials the operator and asks "What's the number for 911"? Just curious.

"How long?" I don't know exactly, but it is around 80 to 90 miles from Marshall to Moscow via the ole' P & L. That's why I used the 100 mile figure in the fuel usage example as a rounded up version. I'm just trying to keep it simple for you, Tom.
[}:)]

[kenneo]

QUOTE: Originally posted by TomDiehl

QUOTE: Originally posted by kenneo

QUOTE: Originally posted by CSSHEGEWISCH

If, according to FM, the service is maybe 10-25 cars, usually once a week, I could see why WATCO would want out. Based on this, the line sees NO service over 80% of the time, and I'm sure that the same would apply to the locomotive assigned to this line. A lot of capital is being tied up in this line not earning much of a return.

All the other traffic was there when the BN shed the line, knowing that they were going to attempt to drain the line of its traffic to the Ritzville facility. The line may not have been "profitable" to BN with BN being the operator, but it was profitable with PCC doing the work for them. It WAS profitable for the PCC also. The former UP part of the PCC still is because the UP is not trying to siphon off the traffic.

This is not a question of economics. It is a question of greed, power lust and politics run-amok in the best 1880's "robber-baron" style.

The problem, and the point of my argument, is we've only seen the one link to an article that doesn't even mention BNSF, or any other connection for that matter. The man interviewed simply states, "we couldn't compete with the trucks." Everything else is someone's impressions, suppositions, or imagining.

Sorry, but this forum will need more than that to believe the "big bad BNSF" story.

You sure have a different way of asking!! FM has said that he will post new when (and if) it is a) published or b) he finds out the answers. You can't ask for more than that. My personal opinion - this is likely all that we will see or hear about this issue, perhaps for some time. This conclusion is based on experience of working for BN, for other roads that needed to recieve service from the BN, and my knowledge of how the BN wrote up its "shedding agreements".

[TomDiehl]

QUOTE: Originally posted by kenneo

QUOTE: Originally posted by CSSHEGEWISCH

If, according to FM, the service is maybe 10-25 cars, usually once a week, I could see why WATCO would want out. Based on this, the line sees NO service over 80% of the time, and I'm sure that the same would apply to the locomotive assigned to this line. A lot of capital is being tied up in this line not earning much of a return.

All the other traffic was there when the BN shed the line, knowing that they were going to attempt to drain the line of its traffic to the Ritzville facility. The line may not have been "profitable" to BN with BN being the operator, but it was profitable with PCC doing the work for them. It WAS profitable for the PCC also. The former UP part of the PCC still is because the UP is not trying to siphon off the traffic.

This is not a question of economics. It is a question of greed, power lust and politics run-amok in the best 1880's "robber-baron" style.

The problem, and the point of my argument, is we've only seen the one link to an article that doesn't even mention BNSF, or any other connection for that matter. The man interviewed simply states, "we couldn't compete with the trucks." Everything else is someone's impressions, suppositions, or imagining.

Sorry, but this forum will need more than that to believe the "big bad BNSF" story.

[Anonymous]

FM's figure of 10-25 cars per line once a week might qualify for an annual average, but to really see what these branches are capable of, you've got to seem them during post-harvest grain rush. Train lengths can get closer to 50-plus cars per branch per trip (potentially twice a week), and instead of one Geep and a switcher, they'll use three or four Geeps.

[kenneo]

QUOTE: Originally posted by CSSHEGEWISCH

If, according to FM, the service is maybe 10-25 cars, usually once a week, I could see why WATCO would want out. Based on this, the line sees NO service over 80% of the time, and I'm sure that the same would apply to the locomotive assigned to this line. A lot of capital is being tied up in this line not earning much of a return.

All the other traffic was there when the BN shed the line, knowing that they were going to attempt to drain the line of its traffic to the Ritzville facility. The line may not have been "profitable" to BN with BN being the operator, but it was profitable with PCC doing the work for them. It WAS profitable for the PCC also. The former UP part of the PCC still is because the UP is not trying to siphon off the traffic.

This is not a question of economics. It is a question of greed, power lust and politics run-amok in the best 1880's "robber-baron" style.

[CSSHEGEWISCH]

If, according to FM, the service is maybe 10-25 cars, usually once a week, I could see why WATCO would want out. Based on this, the line sees NO service over 80% of the time, and I'm sure that the same would apply to the locomotive assigned to this line. A lot of capital is being tied up in this line not earning much of a return.

[TomDiehl]

QUOTE: Originally posted by kenneo

QUOTE: Originally posted by futuremodal

TomDiehl

This is the only article I have found so far regarding this news item. If others come to my attention I will post them. I have not found any more regarding this item, ergo there have been no more posts. I will do so in spite of your insolence and unwarranted impatience.

What Tom wants us to say is that a railroad can haul multiple carloads from a single origin to a single destination cheaper than it can haul a single carload from that same origin to that same destination when figured on an equal unit, such as a bushel, or ton. Of course it can. It costs about 105%-110% of a single car rate to couple up, pull, transport, switch and then spot at destination 2 or more cars (at the same time) from a single origin shipper to and single destination shipper. This is not rocket science. Something on the order of 3/4ths the costs of hauling a shipment is wrapped up in origin and destination service costs.

Generally speaking, unit train railroading is less expensive for the railroad to accompli***han traditional "loose car" railroading. But for the BN, it is "cost neutral" on this point. It costs the BN the same to wait for the PCC to tender 110 cars for a given destination and consignee and then run an extra to pick up the cars as it does to "shuttle" those cars back and forth. For the BN, here, there is no transportation economies issue. And if W-DOT or the PCC ownes the equipment, it could cost the BN even less.

But that is not the issue of this thread, as the rest of us have come to see. I am not sure why Tom is focusing so closely on this point, but that he certainly is doing.

Actually, I'd like FM to say that. The reason I keep bringing up that question is the fact that he keeps avoiding the question of quantity of freight moving.

He's also denied having a vendetta agains BNSF, but the statements he makes without supporting evidence makes this harder to believe.

Perhaps the reason that BNSF sold off this line was the fact that it wasn't profitable to operate. A lesson that WATCO learned the hard way. If that be the case, I fail to see what "BNSF does it again" would mean (in the title).

[TomDiehl]

QUOTE: Originally posted by futuremodal

TomDiehl

Regarding single carload vs the four truckload equivalent, I use that as a point of reference. It does not imply that any of the lines mentioned in the story are only shipping single carloads at a time. Service on these lines is usually once a week, averaging 10 to 25 cars at a time. They often run a geep in tandem with an SW model, probably an SW 1500.

So what IS the quantity, either in carloads or tonnage, being shipped from these elevators? I notice that this question is one that you continually avoid. "Usually once a week, 10 to 25 cars at a time." How often is "usual?" Over what distance? Who is providing the freight movement service? Who is supposed to provide the cars for this service?

As Joe Friday on Dragnet might say "Just the facts." You can leave your imagination behind.

[TomDiehl]

QUOTE: Originally posted by futuremodal

TomDiehl

This is the only article I have found so far regarding this news item. If others come to my attention I will post them. I have not found any more regarding this item, ergo there have been no more posts. I will do so in spite of your insolence and unwarranted impatience.

So now I'm "insolent and impatient" because the link between the WATCO line being abandoned and the BNSF service only exists in your head. Even in the opening post, you admit that you're guessing.

[kenneo]

QUOTE: Originally posted by futuremodal

TomDiehl

This is the only article I have found so far regarding this news item. If others come to my attention I will post them. I have not found any more regarding this item, ergo there have been no more posts. I will do so in spite of your insolence and unwarranted impatience.

What Tom wants us to say is that a railroad can haul multiple carloads from a single origin to a single destination cheaper than it can haul a single carload from that same origin to that same destination when figured on an equal unit, such as a bushel, or ton. Of course it can. It costs about 105%-110% of a single car rate to couple up, pull, transport, switch and then spot at destination 2 or more cars (at the same time) from a single origin shipper to and single destination shipper. This is not rocket science. Something on the order of 3/4ths the costs of hauling a shipment is wrapped up in origin and destination service costs.

Generally speaking, unit train railroading is less expensive for the railroad to accompli***han traditional "loose car" railroading. But for the BN, it is "cost neutral" on this point. It costs the BN the same to wait for the PCC to tender 110 cars for a given destination and consignee and then run an extra to pick up the cars as it does to "shuttle" those cars back and forth. For the BN, here, there is no transportation economies issue. And if W-DOT or the PCC ownes the equipment, it could cost the BN even less.

But that is not the issue of this thread, as the rest of us have come to see. I am not sure why Tom is focusing so closely on this point, but that he certainly is doing.

[kenneo]

QUOTE: Originally posted by rrandb

I am still curious why WATCO could possibly preffer abandonment as opposed to the sale of theline. The article says WATCO withdrew the sale not that Washinton state was no longer interested. [?]

Since the original lines were former NP (now BNSF), the BN may be creating a dditional trouble behind the sceans. This is just a suspision. I would expect such a response from them.

But having been involved with other Class 1 to short line divestments, I would expect there to be cavets in the original sales contract so that BN can control what happens to that line even though they no longer have a financial intrest in it. Since one of the implied issues is diversion of traffic, I would expect the BN to view any origin point other than one on-line to BNSF to view the reroute for traffic from their line-haul to anyone else (except by their desire and instruction otherwise) to be a violation.

Stated another way, if BN doesn't get 100%, nobody gets any %. They offer a transload facility at Ritzville, therefore they will not supply cars to the short line (PCC) for those elevators that BN considers "captive" to their transload facility. Therefore, no empty cars will be supplied to PCC for those elevators, nor will BN permit anyone else (including the PCC itself) to supply cars. I would also not be suprised if BN has a marketing agreement with the Ritzville facility that prohibits the BN, PCC or UP from handling any grain from these elevators unless it is transloaded through Ritzville. They effectivly embargo these elevators.

From this point all the other problems flow. If the PCC can't haul sufficient traffic to meet its costs, then it must resort to "self-help" - in this case, ending survice. And, since the BN (presumably) has blocked all grain traffic from the PCC elevators, the state will not buy the property.

No legal action (either criminal or civil) can proceed to correct this situation unless somebody has been "legally injured", and by that time, all of those injured parties will be out of business and unable to finance a suit and with the current political situation, I doubt that any action by any government entity will proceed.

[rrandb]

I am still curious why WATCO could possibly preffer abandonment as opposed to the sale of theline. The article says WATCO withdrew the sale not that Washinton state was no longer interested. [?]

[Anonymous]

TomDiehl

This is the only article I have found so far regarding this news item. If others come to my attention I will post them. I have not found any more regarding this item, ergo there have been no more posts. I will do so in spite of your insolence and unwarranted impatience.

Regarding single carload vs the four truckload equivalent, I use that as a point of reference. It does not imply that any of the lines mentioned in the story are only shipping single carloads at a time. Service on these lines is usually once a week, averaging 10 to 25 cars at a time. They often run a geep in tandem with an SW model, probably an SW 1500.

So, if you have a reference for your claim that a 2000 HP geep pulling one 110 ton carload is less efficient that four trucks pulling 27.5 tons each, supply it. If you have no reference, at least provide us with some math to make your case. We do have the "Locomotive Gallons Per Mile" thread......

http://www.trains.com/community/forum/topic.asp?TOPIC_ID=51885

....which should help you make your case. For the WATCO scenario, if they did pull a single carload it would be with the SW 1500. If they are using 10 gallons per hour at 25 mph to pull that one 110 ton hopper, that's 2.5 miles per gallon. If it's 20 gallons per hour, that's 1.25 mpg......

http://www.alkrug.vcn.com/rrfacts/fueluse.htm

For a 100 mile run, that's 80 gallons. The trucks are probably getting between 3 to 5 mpg for heavy loads, let's call it 4 mpg. 4 mpg divided into 100 miles, that's 25 gallons per truck, times four that's 100 gallons.

So, in this scenario, it takes 80 gallons to move 110 tons by rail, and 100 gallons to move 110 tons by truck. Therefore, using the SW model, it is easily possible for the shortline operator to beat the truckers in fuel efficiency for a single carload.

(PS - thanks to Hugh Jampton for posting the Al Krug fuel use link)

[rrandb]

We seem to have forgotten about the poor grain farmers that are now "forced" to ship by truck for less money. I am sorry what was the original problem here???[?] There is something about this story that I am haviing real trouble following. Why would WATCO rather abandon the line than sell it to the state. When was the last time a rail operator said "NO!!! NO MONEY!!" We would rather just abandon the line. Something does not add up. Something smells like fi***o me. [2c]

[TomDiehl]

QUOTE: Originally posted by futuremodal

"A locomotive pulling one car is certainly nowhere near as efficient as two trucks hauling the same quantity of grain." - TomDiehl

Trucks can haul between 25 tons and 33 tons of product, depending on which state's regs are the limiting factor. A modern rail hopper is going to haul from 100 to 110 tons of product. Thus it takes usually four truckloads to equal one rail hopper. Despite your unsubstantiated statement, it is not axiomatic that single carload freight is less efficient than corresponding truckloads. More to the contrary, a single engine pulling a single loaded grain hopper is still more efficient if the point of origin, distance haul, and destination are the same e.g. no intermodal transloading taking place. More than likely, the rails are running over gentle grades, while the truckers may be pulling up a 6% or 7% grade enroute.

No, it is not more efficient to haul stuff by truck than by train when origin and destination are directly accessed by both modes.

In the Washington State case, your argument becomes almost comical, in that the State owns both the roads and the railroad lines in question, so the maintenance/tax/etc issues become moot for the railroad.

No, what it comes down to is contractual limitations which do not allow the shortline to use their own crews and their own (or the State's) cars to haul multiple carloads of grain from online elevators on the ex-BNSF trackage to willing buyers located along UP ROW.

The only rail-related inefficiency here is the paper barrier imposed by BNSF. Is that what you're talking about in your statement above, Tom?

I haven't checked BNSF's loco roster lately, but I don't believe they own many GE 44 tonners. A 2000 HP diesel (probably the smallest on the roster) pulling one car is a heck of a lot less efficient that FOUR trucks on that 95 mile backhaul. And I doubt that the small diference in grades you state would make that much difference. And yes, the quantity (a point you have totally ignored) does make a difference in which is more efficient.

You seem to be the only one that thinks that railroads are the most efficient haulage in all circumstances. If we were to take your statement to a MORE ridiculous level, I guess they should build a rail siding to my house to pick up packages so I can ship a two pound package at a lower price than FedEx because the railroads are more efficient. Especially since FedEx uses trucks and they're less efficient than trains.

So Washington or WATCO is the owner? Seems to me that was the whole gist of the article in the link. Neither one wants it. And the article (still the only one linked, no evidence of your earlier "claims") simply states "can't compete with trucks." Talk about comical.

"Contractual Obligations?" Exactly who signed these supposed "contracts?" Must have been a really stupid shipper or agent if the provisions are as bad as you say. This wouldn't be a "paper barrier" that you're talking about. How about a link to that. Or is this something you "suppose" is happening, too?

I guess it was some quirk of business or fate that caused the granger railroads to go out of business. Can you say "Rock Island?" For someone with a progressive sounding screen name, you really seem to be living in the past.

[Anonymous]

"A locomotive pulling one car is certainly nowhere near as efficient as two trucks hauling the same quantity of grain." - TomDiehl

Trucks can haul between 25 tons and 33 tons of product, depending on which state's regs are the limiting factor. A modern rail hopper is going to haul from 100 to 110 tons of product. Thus it takes usually four truckloads to equal one rail hopper. Despite your unsubstantiated statement, it is not axiomatic that single carload freight is less efficient than corresponding truckloads. More to the contrary, a single engine pulling a single loaded grain hopper is still more efficient if the point of origin, distance haul, and destination are the same e.g. no intermodal transloading taking place. More than likely, the rails are running over gentle grades, while the truckers may be pulling up a 6% or 7% grade enroute.

No, it is not more efficient to haul stuff by truck than by train when origin and destination are directly accessed by both modes.

In the Washington State case, your argument becomes almost comical, in that the State owns both the roads and the railroad lines in question, so the maintenance/tax/etc issues become moot for the railroad.

No, what it comes down to is contractual limitations which do not allow the shortline to use their own crews and their own (or the State's) cars to haul multiple carloads of grain from online elevators on the ex-BNSF trackage to willing buyers located along UP ROW.

The only rail-related inefficiency here is the paper barrier imposed by BNSF. Is that what you're talking about in your statement above, Tom?

[TomDiehl]

QUOTE: Originally posted by 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.

Unfortunately, since we can't see inside the BOD's heads at BNSF or UP, we don't know what's behind the decisions. Hard to say if we're talking practical heads or swelled heads. And since we're talking about two different BOD's, their way of interpreting "greatest return" could also be based on different formulas. UP could have the capitol, but decide to invest it elsewhere. Without facts, we might as well get out the crystal ball.

[TomDiehl]

QUOTE: Originally posted by 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.

Very simple. Railroads are more efficient when they move LARGE QUANTITIES of freight between the same endpoints. I've noted time and again that Dave hasn't mentioned a thing about HOW MANY CARS of grain (or any other commodity) have been shifted to truck for the short haul. A locomotive pulling one car is certainly nowhere near as efficient as two trucks hauling the same quantity of grain. But no answer to the quantity question.

In your example, you give the efficiency of a truck running empty 95 miles. How efficient or inefficient is a train moving the same distance? Again, back to the quantity question. Does the grain gathering Co-op own and maintain the tracks and provide the locomotives and crews for this grain gathering? The company providing the transportation service, be it railroad or truck, will be looking at the cost to THEM to determine a rate.

All your grain gathering scenerios don't answer:

1. Who owns and maintains the track for the gathering?
2. Who provides locomotives and crews for the gathering.
3. Who owns the cars needed for the shipment?

And I still haven't seen any links to independent stories that add to or contradict what was said in the original link, which said the shortline couldn't compete with the trucking rate. It doesn't mention car supply, or interline connections.

[MichaelSol]

BNSF lists those elevators and quotes rates for them, and is required by law to serve them. These are still common carrier requirements. But, who can afford to officially complain? The only "study" I have seen on this was that Montana farmers forced to haul to the shuttle at Collins saved about $120 on RR rates, but incurred an average of about $500 per carload in additional trucking costs. But, as you point out, if BNSF simply refuses to supply the cars, not much choice.

Best regards, Michael Sol

[Anonymous]

It sounds as if Ritzville Warehouse and Odessa Union Warehouse are probably trucking grain from their elevators at Odessa, Edwall, Ritzville (assuming these are the older elevators closer to downtown than the new shuttle facility), Sprague, Warden, Irby, Davenport, Downs, Ephrata, Harrington, Lamona, Mohler, and Rocklyn to the shuttle facility near Ritzville. The question then is if they do so because the combination truck / shuttle rate is such that it beats direct carload and carset rates from those other elevators located on active BNSF and BNSF-served railroads, or (as I presume) that BNSF simply won't quote a rate from those other elevators, basically forcing them to truck the grain to the shuttle facility?

[MichaelSol]

Hi Dave,

Odessa Trading Co., now part of Ritzville Warehouse, had elevators at Batum, Moody, and Ruff. About 1,000 carloads in 1978. Odessa Union Warehouse had elevators at Jantz, Lauer, Packard, Reiman and Schoonover, about 800 carloads. Western Grain had the elevator at Malden, 340 carloads. Ritzville Warehouse had elevators at Marcellus and Ralston, 250 carloads. Wolf Kill at McDonald, 89 carloads. Western Farmer's Assoc at Othello, Lynden, about 1,000 carloads, Rosalia Producers Co. at Pine City and Squaw Canyon, about 70 carloads, Lamont Grain Growers at Lamont, 36 carloads, Berger & Plate at Tekoa, 100 carloads, Rockford Grain Growers at Worley, ID and Setters, ID, 260 carloads, Cougar Elevator, Spokane, 107.

Bunge, Cargill, Continental Grain, Dreyfus, FUGTA, United Grain, show carloads in the thousands, originating Milwaukee Road in Washington State, but the "shipper" billing addresses don't show the origin elevators. Presumably these were shipping from some of the elevators listed above, but also elevators at Ewan, Pizarro, Lind, Marengo and places like that.

On BNSF, Ritzville Warehouse owns elevators at Odessa, Edwall, Ritzville, Sprague, and Warden. Odessa Union Warehouse owns elevators at Irby, Davenport, Downs (2), Ephrata, Harrington (2), Lamona, Mohler (2), Odessa, and Rocklyn.

Best regards, Michael Sol

[Anonymous]

MIchael,

Regarding Ritzville Warehouse, et al, you mentioned that Milwaukee used to handle quite a few carloads from them. Are they the ones then with the elevators in Ralston, Pizzaro, Roxboro on the mainline, and/or Marcellus, Jantz, et al on the Marcellus branch? Would that loss of rail service due to the Milwaukee retrenchment have played a part in their involvement in the new shuttle terminal at Ritzville? Did they (and do they still) also own any of the current elevators on the BNSF mainlines via Ritzville and Odessa?

[Anonymous]

Michael,

My thoughts and prayers go out to you in the passing of your friend.

[jeaton]

Michael

Condolences to the family and friends of George Kronberg.

Jay Eaton

[MichaelSol]

Bob, I don't know if you or Jay Eaton or some others might have known him, but George Kronberg, Milwaukee Road's Vice President Traffic, died this morning in his sleep, suffering from prostate cancer.

Best regards, Michael Sol

[MichaelSol]

QUOTE: Originally posted by bobwilcox

Michael-Can grain shippers and railroads sign rate contracts? I seem to recall something that grain had to move on tariffs.

Bob, Grain is indeed one of the commodities that has to move on published tariffs.

USC 49, IV, A, Chap 111, Sub 1,

Sec. 11101. Common carrier transportation, service, and rates

(a) A rail carrier providing transportation or service subject to the jurisdiction of the Board under this part shall provide the transportation or service on reasonable request. A rail carrier shall not be found to have violated this section because it fulfills its reasonable commitments under contracts authorized under section 10709 of this title before responding to reasonable requests for service. Commitments which deprive a carrier of its ability to respond to reasonable requests for common carrier service are not reasonable.

(b) A rail carrier shall also provide to any person, on request, the carrier's rates and other service terms. The response by a rail carrier to a request for the carrier's rates and other service terms shall be--
(1) in writing and forwarded to the requesting person promptly after receipt of the request; or
(2) promptly made available in electronic form.

(c) A rail carrier may not increase any common carrier rates or change any common carrier service terms unless 20 days have expired after written or electronic notice is provided to any person who, within the previous 12 months--
(1) has requested such rates or terms under subsection (b); or
(2) has made arrangements with the carrier for a shipment that would be subject to such increased rates or changed terms.

(d) With respect to transportation of agricultural products, in addition to the requirements of subsections (a), (b), and (c), a rail carrier shall publish, make available, and retain for public inspection its common carrier rates, schedules of rates, and other service terms, and any proposed and actual changes to such rates and service terms. For purposes of this subsection, agricultural products shall include grain as defined in section 3 of the United States Grain Standards Act (7 U.S.C. 75) and all products thereof, and fertilizer.

(e) A rail carrier shall provide transportation or service in accordance with the rates and service terms, and any changes thereto, as published or otherwise made available under subsection (b), (c), or (d).

Best regards, Michael Sol

[bobwilcox]

Michael-Can grain shippers and railroads sign rate contracts? I seem to recall something that grain had to move on tariffs.

I was involved with several projects in chemicals and petroleum where the deals would have only happened if the shipper could protect his risk with a rate/service contract. As an example, most people here probably remember Shell's crude oil trains from Saco to Wilmington, CA over the Tehachapis.

[MichaelSol]

Well, that's interesting. Could be, although BNSF doesn't reveal any ownership interest in its 10K filing. Ritzville Warehouse and Odessa Trading Co. used to be big shippers on the Milwaukee Road, even at the end it was three or four thousand carloads a year or so. Over the years I've always maintained a sort of distant, paternalistic interest in what they're doing.

Every summer, when I go through Eastern Washington to visit the kids in Seattle, I usually visit the various facilities. Pretty recognizable: big open-top, off-road International Scout, baseball cap, shorts, sunglasses and a cigar. The sunburn is usually setting in about the time I get to Ritzville. I like the austere beauty of that country.

The Templin Terminal LLC is a fairly typical organization for a big project like that, both for financing and insurance purposes. Not sure why, but BNSF lists it in two parts on its elevator directory, Templin Terminal LLC, a 762,000 bu capacity shuttle, elevator no. 2355, and Ritzville Warehouse Co, a 3.7 million bu capacity shuttle, elevator no. 1523

RW's website says the following: "Ritzville Warehouse Co. opened its' 110-car shuttle loading facility known as Templin Terminal in April 2002. This facility allows greater economies of scale to Ritzville Warehouse Company and its' members. Maintaining five of our own trucks ensures the prompt delivery of bushels to grain terminals for mostly export sales. These trucks also allow farm stored grain to be hauled to market in a timely and efficient manner. "

A reprint from the July/August, 2004 Grain Journal doesn't shed any more light on it. http://www.keigleyco.com/news_industry_links/EasternWashington.pdf

"New 2.5-million-bushel rail terminal for Ritzville Warehouse Co. two miles east of Ritzville, WA, including a 760,000-bushel slipform concrete elevator"

"With 30 locations and 18 million bushels worth of storage capacity around eastern Washington, Ritzville Warehouse Co. is one of the major players in the region’s grain industry. But for all its origination power, the farmer-owned cooperative lacked the ability to load 110-car shuttle trains on the Burlington Northern Santa Fe main line to Portland, OR, and Kalama, WA, says CEO John Anderson.

The 25-plus-year grain industry veteran, who served in 2000-02 as chairman of the ational Grain and Feed Association’s Country Elevator Council, joined the company as CEO about a year ago, having previously been with Central Washington Grain Growers.

At that time, construction of the new 2.5-million-bushel slipform concrete rail terminal had just broken ground, about two miles east of Ritzville, WA. Anderson oversaw completion of the project in April 2002, and the facility began shipping grain shortly thereafter.

The elevator consists of four 178,000-bushel slipform concrete tanks standing 48 feet in diameter and 134 feet tall. Grain sits atop above-ground, 37-degree concrete hopper bottoms, which eliminates the need for a sweep auger. Because of fast turnover, the tanks have no aeration or grain temperature monitoring systems. The complex also includes a 50,000-bushel interstice bin. In addition, the facility includes a 330-foot-diameter, 1.7-million bshel ground pile. A 15,000-bph InterSystems drag conveyor carries grain out to the pile. Incoming grain arrives by truck at a roughly 1,000-bushel mechanical receiving pit, which feeds a 40,000- bushel, 187-foot-tall Schlagel leg."

Tried to call this morning to see what the BNSF connection was, but no one was answering the phone. Can't imagine why a grain elevator isn't answering the phone on a Saturday morning in the middle of winter.

Best regards, Michael Sol

[Anonymous]

QUOTE: Originally posted by kenneo

QUOTE: Originally posted by MichaelSol

QUOTE: Originally posted by kenneo
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.

I understood that the Ritzville Warehouse Co , a farmer-owned co-op, built the shuttle elevator. I am not aware that BNSF has ever built a shuttle elevator.

Best regards, Michael Sol

You couldn't prove it by me either way. The substance of others remarks about the operation was that it was a BN deal. It did sound a bit odd to me that the BN would fund and operate such a facility if there was even a chance of getting someone else to fund it.

The word from the grapevine ever since the facility was built is that it is a BNSF sponsored project. That leads me to believe that BNSF was responsible for funding and/or other indirect involvement. The facility itself is owned by an LLC. The fact that BNSF no longer provides cars for the large and long standing elevators at Sprague, Ritzville proper, Lind, Paha, and Tokio (though they do continue to serve the fertilizer plant in Tokio), that would lead me to conclude that BNSF itself has a financial stake in the failure or success of the Ritzville shuttle facility, since business given to an existing elevator is business taken away from the shuttle facility.

[MichaelSol]

QUOTE: Originally posted by up829
Regarding shuttle elevators, aren't there new OSHA regulations going into effect to prevent grain elevator explosions

The OSHA Grain Handling Facilities Standard was published December 31, 1987 (52 FR 49592) with an effective date of March 30, 1988. This was in response to some horrendous elevator explosions in the late 1970s. According to OSHA: "Grain dust explosions are often severe, involving loss of life and substantial property damage. In the last 40 years, there were approximately 600 explosions in grain handling facilities across the United States, which killed 250 people and injured more than 1000. As recently as June 8, 1998, the nation's deadliest explosion in 15 years at the DeBruce Grain Elevator in Wichita, Kansas, left seven people dead and ten others injured."

"National attention focused on the destructiveness of explosions in grain handling facilities when a series of explosions occurred in late 1977 and early 1978; in December 1977, alone, 59 deaths and 49 injuries resulted from five grain elevator explosions (52 FR 49592). These catastrophic grain explosions of the late 1970's led to increased national awareness of the hazards associated with the grain handling industry. Actions and research that began in the late 1970's, both inside and outside government, led to the promulgation of OSHA's Grain Handling Facilities Standard. This Standard requires various safety improvements."

In February, 2003, OSHA published a Regulatory Review of OSHA's Grain Handling Facilities Standard [29 CFR 1910.272], pursuant to Section 610 of the Regulatory Flexibility Act and Section 5 of Executive Order 12866.

Based on analyses performed for this 610 Review, "OSHA concludes that the Grain Handling Facilities Standard should continue without major change. The Standard should not be rescinded because it is necessary to carry out statutory objectives to protect worker safety, and changes are not needed to minimize significant impact on a substantial number of small entities. Fatalities from grain explosions and suffocations have decreased greatly since promulgation of the Grain Handling Facilities Standard. Furthermore, testimony at the public meetings and written comments submitted to the OSHA Docket, as well as economic analysis, indicate no negative economic impact resulting from the Standard. "

Best regards, Michael Sol