The filing at the Surface Transportation Board, dated Dec. 11, said if the regulator authorizes Dakota, Minnesota & Eastern Railroad Corp. to haul coal from the basin in Wyoming, it could delay BNSF traffic from the Pacific Northwest to Chicago.
But DM&E's top executive described the filing as an attempt to prevent competition in the marketplace.
Privately owned DM&E, based in Sioux Falls, South Dakota, has been seeking up to $2.5 billion in U.S. government funding to upgrade and extend its network into Powder River Basin.
The Surface Transportation Board, which regulates disputes between railroads and customers, has given its approval for the project, though the Federal Railroad Administration has yet to rule on DM&E's loan application.
Mines on the rich seams of the basin are now only served by BNSF and Union Pacific Corp., the two biggest U.S. railroads.
As natural gas prices have risen, the low-cost, low-sulfur coal of Powder River Basin has become increasingly popular among utilities that burn it to produce electricity.
Utilities have complained of delivery problems with Powder River Basin coal, particularly after derailments on the joint line run by BNSF and Union Pacific in the basin in May 2005.
BNSF said coal trains on DM&E's network would cause "substantial additional delays" for its intermodal traffic from the West Coast at a crucial junction in Savanna, Illinois.
Intermodal services use standardized containers that can be interchanged between different modes of transport - truck, ship or train. Intermodal represents BNSF's single-biggest source of volumes and revenue.
BNSF spokesman Dick Russack said on average the company has around 20 intermodal trains a day passing through Savanna.
DM&E Chief Executive Kevin Schieffer told Reuters in a phone interview that only three coal trains a day would use that junction. "This is not a significant amount of traffic," he said. "What this really boils down to is a desire to keep competition out of the marketplace."
The Energy Information Administration said separately on Tuesday it expects U.S. electricity providers to burn 2.1 percent more coal next year than in 2006, even though the country will produce 2.3 percent less.
(The preceding article was published by Reuters.)
To me this is quite a stretch.
Has there been a standard established before that certain "types" of traffic has a higher level of priority over others? With their "logic", a carrier would not be able to increase any number of trains on any of it's lines without other carriers objecting.
Should I file an objection with authorities the next time I am stopped by a coal train?
For all of the crazy lawsuits filed against the BNSF when someone ran into a train and then sued for millions of dollars, this is right up there with it.
As previously stated on another thread, this is all about control at the Savanah interlocking.
\ed
This is interesting. Both BNSF and UP have been very quiet about the DM&E project in the past couple of years. Maybe BNSF knows something about the FRA loan already:
This is all in the 'maybe' realm, but is supported by the rumor of a secret UP/DM&E deal. As far as the Savanna Tower issue, there is more than enough lead on both sides of the crossing to hold DM&E/IC&E trains while the BNSF 'fleet' rolls by. Of course, BNSF can apply for an FRA loan to build a 'fly-over' like in Kansas City! Perhaps BNSF is using this as a negotiating point to see if there really is a secret deal....
Jim
Modeling BNSF and Milwaukee Road in SW Wisconsin
It sounds like BNSF is threatening to hold its breath and beat its fists on the ground until it gets its way. Perhaps BNSF should stop hauling coal so it can speed up its intermodal trains.
"No soup for you!" - Yev Kassem (from Seinfeld)
There is no secret about the right of first refusal on the DM&E line by UP (former CNW). Been a known fact for some time. There are many parts to this story that just for some reason, do not sit well with me. A certain lack of professionalism you could say. Never have I seen such official documents and filings with such errors and mis-statements as I have from the DM&E/IC&E cases.
If one digs enough in the press as well as STB filings, and does research, you will find them too.
Ken
Dan
BNSF is just playing the game by the government rules. They'd be remis not to.
"Lawyers are like nuclear weapons, I got 'em because the other side's got 'em. But once you use 'em, they screw everything up." It's a quote from a movie titled "Other Peoples' Money".
BNSF has to protect its investors. (That's the "Other Peoples' Money"). The "other side" has come in with (yetch) lawyers and politicians. BNSF has to respond in kind or they're going to take the short end of the stick.
And those people in Ft. Worth don't get paid to settle for the short end. "Playing Nice" is not the same as "Just let the other guy get a cheap governemnt loan and screw you over."
Read the article.
What a joke. That's their best reasoning as to why the DME shouldn't be allowed to build? Because it will hamper their intermodal trains? I started to cry, then I realized it was because I was laughing so hard.
solzrules wrote: Read the article.What a joke. That's their best reasoning as to why the DME shouldn't be allowed to build? Because it will hamper their intermodal trains? I started to cry, then I realized it was because I was laughing so hard.
Indeed! What possible influence could DM&E coal hauling have on BNSF's intermodal transportation? I just do not see the connection.
Zardoz:I will attempt to explain the situation at Savanah. This is subject to correction by folks that are more of an authority than I am.
1. BNSF mainline crosses ICE at grade in Savanah. The BNSF mainline runs from Chicago to Twin Cities adn then on the Pacific Northwest.
2. I am guessing (subject to correction) that ICE runs about 6-8 trains daily over the crossing.
3. Also speculating that ICE runs those trains at a reduced speed due to the Mississsippi River bridge crossing. Possibly 10-20 mph.
4. ICE has an operator which controls the bridge for rail or barge traffic. I am guessing that operator also controls the interlocked crossing (subject to correction).
5. If DME/ICE increases the train frequency, based on previously reports to 3 loaded coal trains to Chicago and beyond, then that would be 6 more movements per day.
6. A 120 car coal train is about 6500 feet in length. At 10 mph it will take 7.5 minutes to move one mile. I am not a railroad operations guy, but my guess is that the movement from the Mississippi River line to the Chicago line (a right hand turn), crossing the river, crossing the BNSF, and then getting back to speed will consume close to 30 minutes. The operator will want to keep the train moving rather than stop it on the bridge. Perhaps more than 30 minutes per train will be consumed of red blocks for the BNSF trains.
7. 30 minutes x 6 trains is 3 hours of additional non movement time for the BNSF. Throw in the 6-8 existing train movements and now you got some serious delay time. Throw in the barge traffic. I dont know who has the right of way...barge or trains, but suddenly this is a 'Hot Spot'.
So, if in fact the train frequency doubles and if the ICE controls the plant, there could be backups of the fleet footed BNSF intermodal trains. Even if ICE does not control the plant, there is a lot more movement to be managed.
Several years ago BNSF purchased and took control of the IC track a few miles up the river near East Dubuque. My guess is that IC saw they could get a couple of bucks out of the deal, reduce their costs, and not affect their operations. BNSF gained control. Similar situation is occuring in Chicago on the old GMO line to Joliet, although I am not sure how that is being managed.
I see BNSF's point, but it is a real stretch, when one considers the amount of delay the BNSF's own coal trains cause for their operations, other railroads operations, and the driving public.
Better be careful, or they will open a can of worms.
I think it is about control of Savanah...tit for tat. Drop the objections and get the interlocking plant.
ed
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
Don:You might be correct on the "cheap money". Has anyone seen what the finance rate is on the government $$$? Obviously cheaper than the BNSF's cost of capital, or in this case cost of debt. This loan will in effect lower DME's "hurdle rate" giving it an advantage.
This is what happens when government agencies (or funded) compete with public or privately held companies. The government should be very careful in their allocation.
As I have previously stated, this is a project that I feel must be considered, based on UP/BNSF's inability to handle the existing coal traffic. Everything seems grand now, with press releases of record train movements coming out of the PRB region, but it appears there will be considerable growth in coal from the region.
This DME project has to be a concern for the UP and BNSF. My BNSF Coal Map has not arrived by US Mail yet, so I dont have a great map to see where the power plants are in the US, but...this line will give access to the barge traffic. BNSF currently runs several coal trains daily down the Beardstown line, many of which terminate at the Ohio River for barge loadings. I dont know the rate structure of moving coal by rail vs barge, but the added competition of gaining access to barges on the Mississippi would no doubt affect current rate structure of several movements.
BTW, Anti Gates has posted a web connection to a dandy BNSF Coal Map on the other thread. If you havent been there...do so. As a map geek and train nerd, I was drooling when I saw it. BTW, the map is available from BNSF in printed form.
greyhounds wrote: BNSF is just playing the game by the government rules. They'd be remis not to."Lawyers are like nuclear weapons, I got 'em because the other side's got 'em. But once you use 'em, they screw everything up." It's a quote from a movie titled "Other Peoples' Money". BNSF has to protect its investors. (That's the "Other Peoples' Money"). The "other side" has come in with (yetch) lawyers and politicians. BNSF has to respond in kind or they're going to take the short end of the stick.And those people in Ft. Worth don't get paid to settle for the short end. "Playing Nice" is not the same as "Just let the other guy get a cheap governemnt loan and screw you over."
If BNSF really wants to protect it's *stockholders*, they'd quite running coal and grain trains altogether and just focus on the import intermodal. Oh, the railroad would lose money, but the *stockholders* would be able to receive gains on their *other* holdings - Evergreen, Hanjin, China Shipping, et al!
Perhaps some day, BNSF's current double digit IQ management pool will be replaced by more visionary managers, who can see the obvious gains of supporting the DM&E PRB extension in return for access to the Bill-Edgemont section of the proposal. Until then, we'll just get more of this typical BNSF crap-o-rama.
MP173 wrote: Zardoz:I will attempt to explain the situation at Savanah......
Zardoz:I will attempt to explain the situation at Savanah......
Very interesting; thanks for the info.
Dave:Thanks for your input.
My guess is you are off by a digit on the IQ's. Try another digit. You dont run these kind of organizations without a pretty high level of intelligence.
It might make sense to make the "trade". Give us your detailed thoughts and skip the mudslinging.
MP173 wrote: You dont run these kind of organizations without a pretty high level of intelligence.
You dont run these kind of organizations without a pretty high level of intelligence.
And you dont keep your job by focusing on a single issue or pet peeve...
MP173 wrote: Zardoz:I will attempt to explain the situation at Savanah. This is subject to correction by folks that are more of an authority than I am. 1. BNSF mainline crosses ICE at grade in Savanah. The BNSF mainline runs from Chicago to Twin Cities adn then on the Pacific Northwest. 2. I am guessing (subject to correction) that ICE runs about 6-8 trains daily over the crossing.3. Also speculating that ICE runs those trains at a reduced speed due to the Mississsippi River bridge crossing. Possibly 10-20 mph. 4. ICE has an operator which controls the bridge for rail or barge traffic. I am guessing that operator also controls the interlocked crossing (subject to correction).5. If DME/ICE increases the train frequency, based on previously reports to 3 loaded coal trains to Chicago and beyond, then that would be 6 more movements per day. 6. A 120 car coal train is about 6500 feet in length. At 10 mph it will take 7.5 minutes to move one mile. I am not a railroad operations guy, but my guess is that the movement from the Mississippi River line to the Chicago line (a right hand turn), crossing the river, crossing the BNSF, and then getting back to speed will consume close to 30 minutes. The operator will want to keep the train moving rather than stop it on the bridge. Perhaps more than 30 minutes per train will be consumed of red blocks for the BNSF trains.7. 30 minutes x 6 trains is 3 hours of additional non movement time for the BNSF. Throw in the 6-8 existing train movements and now you got some serious delay time. Throw in the barge traffic. I dont know who has the right of way...barge or trains, but suddenly this is a 'Hot Spot'.So, if in fact the train frequency doubles and if the ICE controls the plant, there could be backups of the fleet footed BNSF intermodal trains. Even if ICE does not control the plant, there is a lot more movement to be managed.Several years ago BNSF purchased and took control of the IC track a few miles up the river near East Dubuque. My guess is that IC saw they could get a couple of bucks out of the deal, reduce their costs, and not affect their operations. BNSF gained control. Similar situation is occuring in Chicago on the old GMO line to Joliet, although I am not sure how that is being managed.I see BNSF's point, but it is a real stretch, when one considers the amount of delay the BNSF's own coal trains cause for their operations, other railroads operations, and the driving public.Better be careful, or they will open a can of worms.I think it is about control of Savanah...tit for tat. Drop the objections and get the interlocking plant.ed
Just to add to this: I have observed two solid hours of river traffic through the swing span at Fort Madison and because river has the ROW, trains are backed up. This could happen at Sabula. Perhaps four consecutive trains might tie up the diamond for hours.
Looking through some out of date employee timetables from when the SOO owned the ex-MILW and also one from the IMRL days, it appears that the BNSF/ICE crossing is an automatic interlocking. It shows the drawbridge as being manual, but the at grade crossing has a symbol for an automatic one.
As to barge traffic, I believe river traffic has the right of way.
Jeff
MP173 wrote: Several years ago BNSF purchased and took control of the IC track a few miles up the river near East Dubuque. My guess is that IC saw they could get a couple of bucks out of the deal, reduce their costs, and not affect their operations. BNSF gained control.
Several years ago BNSF purchased and took control of the IC track a few miles up the river near East Dubuque. My guess is that IC saw they could get a couple of bucks out of the deal, reduce their costs, and not affect their operations. BNSF gained control.
In another case, CN wanted to gain control of the DMIR line around Duluth. They ended up buying the DMIR, the B&LE and a few lake boats.
I have an old video of the Mississippi valley during winter that includes savanah I think. Shot during the 80s. This is a fairly congested location. BNSF has a point.
Here's something to consider though, they may be rattling the trees looking for money to improve that interlocking.
FM's insistance that BNSF is dumb for not wanting competition is just strange. It flys in the face of what's been normal business practice for 200+ years in this country. BNSF has to look out for one thing and that's BNSF.
So they file and hope they get a new flyover out of the deal.
Imagine that? BNSF = NIMBY...lol. The elk of Abo canyon must be snickering into their thistle over this one.
It would be interesting to know more about the laws that govern the politics of diamonds, if BNSF has any leg to stand on with their claims of hardship, then I'd bet the history books would be full of instances where competing railroads did similarly hoping to box in their competition. THAT might make a great article for trains magazine as far as recapping similar struggles of the past .
When first reading this article, my gut hunch fell towards exactly what Oltmann seems to suspect , everybody loves to to milk the cash cow when it's in the barn. In fact I half suspected that the news item at the core of the "RR's can't keep pace with coal demand" might have been more of a planted thought process with similar ambition than it was a real news story, it sure would not surprise me.
Control of the diamond is an interesting possibility, too.
Jeffr:Thanks for clarifying the operations of the interlocker. With it being automatic, that would tend to slow it down also. As I understand "automatic" it is first come, first serve. I believe BNSF is single track thru there, so they would have to "take turns". Often on the double track crossing of CN and CSX at Wellsboro, In., I will hear the CN talking about CSX slowing down on one track to allow a second train to come thru.
I have crossed at Fort Madison and remember once sitting on the bridge waiting for a barge to cross. Interesting operation there. The toll gate keeper controls the bridge and the railroad. Now, that would be an interesting and busy job.
Lets go back in history the BN bought heavily into the PRB with its own money, they kept rates down to insure future loadings. Now FM wants the DM@E to come on with the governments money, investor dollars, and just get everything handed to them. It would be idiotic for the BNSF and UP to sit by and let the DM@E get a free ride into the PRB.
BNSF I'm sure is also scared of what could happen with DM@E if later down the road they were to be absorbed by another road, possibly even an eastern road.
C&NW certainly also spent plenty of their own money to get to Powder River.
Of course, how would CB&Q and C&NW have done without government subsidies in the 19th century?
youngengineer wrote: BNSF I'm sure is also scared of what could happen with DM@E if later down the road they were to be absorbed by another road, possibly even an eastern road.
Now that is an interesting thought.
I'm not sure how much fear they should have. They can't get to the Pacific coast.
Incidently, someone asked why intermodal would be higher priority. Intermodal is almost always higher priority then unit train comodities. Generally the goods are more time sensitive.
YoHo1975 wrote: C&NW certainly also spent plenty of their own money to get to Powder River. Of course, how would CB&Q and C&NW have done without government subsidies in the 19th century?
Actually C&NW spent plenty of UP's money - C&NW didn't have any of its own. That's why "C&NW's" line was jointly owned by UP before UP swallowed C&NW.
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