General railway discussions

[drum118]

Saw this on my FB feed and thought some UT'ers might find it interesting:

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Sourced from the FB group: Friends Who Like Vintage Toronto - Poster Richard Essery

Link: https://www.facebook.com/photo/?fbi...aoDjxBatQ2gsySFCQHWxWrjNSSVfkYca0&__tn__=EH-R

Associated text:

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A thousand acres for 1M, LOL

That's $1,000 per acre; had that price increased in line w/CPI it would mean you could buy 1 acre of land in Vaughan today for $9,365 (per the Bank of Canada Inflation Calculator)

Ha ha. Not even out by just one order of magnitude but greater than 2.

It really shows how little traffic using the yard these year and not the only one I have seen like this. Shot the yard off the hwy 7 overpass a month ago as well shooting some motor power for the first time in over 10 years.

With more intermodal and unit trains bypassing yards like this today, yard look very short of equipment to use these yard until traffic picks up.

 

[drum118]

That's likely the big fear that has gripped the railways - there are enough places where a 160-mile radius opens up huge opportunities for US railways to reach into Canada for business.

I'm on the fence about whether that is a good thing or a bad thing. Our west coast ports are capacity strained, so having more overseas commodities routed through the US relieves our system.... but conversely it puts at risk the investment we are looking to the railways to make to add capacity east to west.

A hundred and fifty years ago, a rail system based north-south rail links threatened confederation in a way that I don't think is as real any more.

I see this very similar to upstart airlines - Westjet and Air Canada continue to capture much of the business, but the upstarts grab enough to hurt the big two at the margin, and they present a reason for the big two to take competition seriously and not rest on their oars. We haven't seen price wars that cut fares so low that they drive everyone to the bottom. In general I don't favour the traditional Canadian model where we let two entities pretend to "compete", with a roomful of regulatory lawyers simulating true open market competition (Rogers vs Bell, etc). That may have been necessary when our population was 22 million, but as we look to much greater population and economic growth, true free markets are viable and we should embrace them.

The other part of the railways' fear derives from the shift to bulk shipments. There isn't really that much incentive for railways to seek interswitch business from customers who only handle a few cars per week.... the interswitch portion of the haul adds time and is costly, which offsets any price differential that can be offered over the rest of the haul. But.... with prairie grain terminals that deal in trainloads, interswitching becomes much more of an opportunity..... instead of heading for Swift Current and on to Calgary, the whole grain or potash train just turns left and heads south into North Dakota. That's a much bigger loss to the existing railways.

All the same, we have things that we want the railways to do for us that they aren't necessarily doing at the moment. I think Ottawa is being astute by not bending over backwards on this one. Maybe this is the lever that brings the railways to the table on other things. Nothing wrong with playing one's cards strategically.

- Paul

Not sure how the EU model would work here, but all EU countries have to open their rail system to other company's that anyone can start a system and use trackage rights in any country as well between other countries if they comply with all safety standards including rolling stock. They can set their own fare structures that some are undercutting existing systems.

Passenger trains are seeing more companies that go to the same cities as state own trains that have been doing since day one cheaper than the state own trains.

With the EU stopping air flights about 2:5 hours long, the RR's are seeing an increase of ridership to the point you may have to wait a day or more to get a train to x if you haven't book well in advanced or do a round about route as there isn't enough equipment or the line can't handle all the trains in the first place. We had a few cases of doing the round about or taking the firs/last train of the day than the plan one last year.

Freight railway is still behind the times, but are making various improvements with modern day equipment, locomotives that can pull more cars as well being faster to not interfere with with passenger trains. Tunnels are the worse enemy of freight trains as most can't handle double stack or anything tall as well the length of it. Can't ship LRV's by rail is a good example why they are shipped by trucks at night.

CPKC would benefit the most from my point of view with this new interchange rule since CP like more unit and intermodal trains than mixed trains in the first place.

 

[crs1026]

^I don't see the European model happening any time soon on this continent, especially since our "Canadian" railways have become international properties with lines all the way to the Gulf of Mexico. Nationalizing the infrastructure is a hard enough sell in Canada but it's pretty much impossible to sell in the US.

But it's actually a pretty good sell if we start looking in that direction.

There are lots of potential shippers out there who can generate a rate of return but only maybe 1-3%. The PSR philosophy of the last decade has been to shed low-return rail customers - in the interest of offering investors a higher return. This is great for the investors but bad for the country because it shifts freight onto highways (meaning the taxpayer incurs costs for roads) or the business can't get its goods to market and goes elsewhere.

Treating the railways as a utility, shifting more traffic to rail but making only a small return (or even taking a loss and receiving a subsidy) might stimulate the economy more and improve transportation efficiency - and cut carbon use.

I can get a 5% rate of return by putting my money in GIC's. CN's rate of return is iirc only around 7%. One can see why the railways feel the need to shed risks and trim service customers, otherwise why would an investor take the added risk and buy railway stock? But maybe the stimulus effect of the substantial dividends currently paid by CN and CPKC are not that important in the big picture. Maybe investing public capital would achieve more.

- Paul

 

[lenaitch]

That's likely the big fear that has gripped the railways - there are enough places where a 160-mile radius opens up huge opportunities for US railways to reach into Canada for business.

I'm on the fence about whether that is a good thing or a bad thing. Our west coast ports are capacity strained, so having more overseas commodities routed through the US relieves our system.... but conversely it puts at risk the investment we are looking to the railways to make to add capacity east to west.

A hundred and fifty years ago, a rail system based north-south rail links threatened confederation in a way that I don't think is as real any more.

I see this very similar to upstart airlines - Westjet and Air Canada continue to capture much of the business, but the upstarts grab enough to hurt the big two at the margin, and they present a reason for the big two to take competition seriously and not rest on their oars. We haven't seen price wars that cut fares so low that they drive everyone to the bottom. In general I don't favour the traditional Canadian model where we let two entities pretend to "compete", with a roomful of regulatory lawyers simulating true open market competition (Rogers vs Bell, etc). That may have been necessary when our population was 22 million, but as we look to much greater population and economic growth, true free markets are viable and we should embrace them.

The other part of the railways' fear derives from the shift to bulk shipments. There isn't really that much incentive for railways to seek interswitch business from customers who only handle a few cars per week.... the interswitch portion of the haul adds time and is costly, which offsets any price differential that can be offered over the rest of the haul. But.... with prairie grain terminals that deal in trainloads, interswitching becomes much more of an opportunity..... instead of heading for Swift Current and on to Calgary, the whole grain or potash train just turns left and heads south into North Dakota. That's a much bigger loss to the existing railways.

All the same, we have things that we want the railways to do for us that they aren't necessarily doing at the moment. I think Ottawa is being astute by not bending over backwards on this one. Maybe this is the lever that brings the railways to the table on other things. Nothing wrong with playing one's cards strategically.

- Paul

Interesting analogy with the airlines. There is decent competition and choice between large centres such as Toronto and Montreal but less so between, say, Winnipeg and Regina or even Toronto and North Bay (I just pulled those our the air, so to speak).

Even with a growing population, density and distribution are still a challenge that no EU country has to deal with. CN probably generates virtually no revenue between Winnipeg and Sudbury, same with CPKS east of Thunder Bay to Sudbury. The prairies are a bit unique in that the product the railways haul out of there is fairly scattered throughout, even though the load points are now more concentrated than it the past. There's no a lot of product to load or deliver, regardless of price or competitive forces, through much of Ontario, the Maritimes or the mountains.

 

[crs1026]

Even with a growing population, density and distribution are still a challenge that no EU country has to deal with. CN probably generates virtually no revenue between Winnipeg and Sudbury, same with CPKS east of Thunder Bay to Sudbury.

Well, Northern Ontario generates revenue in the sense that there is a lot of traffic passing through at $x per ton-mile, but I agree that few loads collected or delivered on much of that line.

For the most part, the north does not generate revenue that could not be generated by routing Winnipeg-Toronto traffic over the railways' other lines that run to the south of the Great Lakes.

Both railways already run traffic Toronto-Chicago-Winnipeg, and could divert just about all of the traffic that runs Toronto-Winnipeg to a US routing.

That's no doubt a further reason why Ottawa treads lightly with the railways.

Unfortunately all these mutual back-scratches are not visible or maybe not even articulated in writing, which is why the explanation for specific policies always end up under the umbrella of "It's complicated".

- Paul

 

[Metroscapes]

I live next to the Guelph Junction Railway and noticed an increase in carloads from the summer. The usual daily run up the Goderich Sub was 23 cars this morning. Good to see local deliveries are healthy!

27 carloads today, the most I've seen. This is up from an average of ~15-20 last year. And they didn't even have the usual 2-3 carloads of wood poles for Guelph Utility Pole.

 

[drum118]

Canada expropriates land needed for Lac-Megantic bypass project​

Ottawa confirms land expropriations for rail bypass after Lac-Mégantic tragedy​

 

[lenaitch]

Well, Northern Ontario generates revenue in the sense that there is a lot of traffic passing through at $x per ton-mile, but I agree that few loads collected or delivered on much of that line.

For the most part, the north does not generate revenue that could not be generated by routing Winnipeg-Toronto traffic over the railways' other lines that run to the south of the Great Lakes.

Both railways already run traffic Toronto-Chicago-Winnipeg, and could divert just about all of the traffic that runs Toronto-Winnipeg to a US routing.

That's no doubt a further reason why Ottawa treads lightly with the railways.

Unfortunately all these mutual back-scratches are not visible or maybe not even articulated in writing, which is why the explanation for specific policies always end up under the umbrella of "It's complicated".

- Paul

Ha. You understood what I meant; that very very few loads originate from or terminate in northern Ontario for both main lines. I vaguely recall many years ago CP mused (or trial ballooned) about abandoning between TBay and Sudbury. They probably didn't like the response.

 

[crs1026]

Ha. You understood what I meant; that very very few loads originate from or terminate in northern Ontario for both main lines. I vaguely recall many years ago CP mused (or trial ballooned) about abandoning between TBay and Sudbury. They probably didn't like the response.

It was more than musing. In the EHH days there were specific CN trains (I forget the numbers) that were shifted to a Chicago routing - with a very pointed message. I seem to recall that it was done to intimidate labour unions.
It happens regularly for short periods when there are service disruptions, but the railways seem to be playing nicer of late. That could easily change, but that’s part of the balance in the relationship between Ottawa and the railways.

- Paul

 

[dowlingm]

It was more than musing. In the EHH days there were specific CN trains (I forget the numbers) that were shifted to a Chicago routing - with a very pointed message. I seem to recall that it was done to intimidate labour unions.
It happens regularly for short periods when there are service disruptions, but the railways seem to be playing nicer of late. That could easily change, but that’s part of the balance in the relationship between Ottawa and the railways.

- Paul

Wonder what if any reaction there was from US communities/states along this previous (non-emergency) reroute - can’t imagine they were thrilled with the extra noise/congestion/impact on level crossings. Huge sums are being spend in the Chicago area to try and decongest the rail traffic of their own.

 

[Allandale25]

CPKC and CSX announce planned collaboration to develop additional hydrogen locomotives

www.cpkcr.com

 

[Allandale25]

Update to a previous post. This awesome book is now available.

 

[drum118]

Alstom’s Coradia iLint Enters Revenue Service in Quebec​

 

[drum118]

CPKC: New Railroad, New Livery​

 

[Metroscapes]

Railroads reach agreement to create new direct connection and corridor linking Mexico, Texas and the U.S. Southeast​

Canadian Pacific Kansas City (TSX: CP) (NYSE: CP) (CPKC), CSX Corporation (NASDAQ: CSX) (CSX) and Genesee & Wyoming Inc. (G&W) today announced they have reached agreements that when completed will create a new direct CPKC-CSX interchange connection in Alabama.

As part of the series of proposed transactions, CPKC and CSX would each acquire or operate portions of Meridian & Bigbee Railroad, L.L.C. (MNBR), a G&W-owned railway in Mississippi and Alabama, to establish a new freight corridor for shippers that connects Mexico, Texas and the U.S. Southeast.

[...]

Under the agreements announced today, CPKC would acquire and operate the segment of the MNBR between Meridian and Myrtlewood, Ala. and CSX would operate the lines currently leased by MNBR east of Myrtlewood. As a result, CPKC and CSX would establish a direct CPKC-CSX interchange at or near Myrtlewood, Ala. In exchange, G&W would acquire certain Canadian properties owned by CPKC and other rights. MNBR would receive rights to continue to provide local service to existing customers on former MNBR-owned lines and connect with other railroads without interchange restrictions.

I'm very interested to know what these Canadian properties are.

Also, map of MNBR below for reference. Myrtlewood is midway between Linden and Pennington.