The end of CP reign at the D&H and the D.M.&E

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Re: The end of CP reign at the D&H and the D.M.&E

Postby JayBee » Sat Nov 10, 2012 10:38 am

There is virtually nothing west of Pierre until you get to Rapid City where you have a cement plant, not sure how much it still ships by rail. Then at the far end of the line you have the Bentonite Clay processing plants. They produce a reasonable volume of traffic, but the tariff is low and the distance to Huron is significant, if the plant produce a more valuable product that could afford a higher rail tariff then CP might not be looking to sell, but the revenue from hauling the Bentonite doesn't cover the costs of track maintenance west of Pierre. Short hauling the Bentonite to Crawford, NE (BNSF) is better. CP never intended to enter the PRB, cost to build the line versus potential revenue did not look good on a return on Investment basis. The DM&E plan was that the PRB line would swing south of the existing mainline at Wasta, SD and would be mostly new from there using only a small portion of the north-south line ROW, throughly reconstructed , to get around the south end of the Black Hills. The new line west of Wasta avoided the slippery clay area.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby Engineer Spike » Thu Nov 15, 2012 10:56 am

I think that Mr. Harrison would be careful about giving up on the D&H. I'm sure that he is fully aware of the strategic eastern cities served by this subsidiary. There are already deals in place with NS and CSX with haulage and trackage rights. Lets look at his former employer, CN. Even though they are each others top competitors, they do some joint trackage agreemente, which produce increased capacity and provide some more direct routes. Some deal with CN might give CP/D&H more traffic, yet give CN longer line haul and access to eastern US markets.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby Tadman » Sat Nov 17, 2012 11:43 am

Good observation. Worth noting, IC and CN were both in full-on acquisition mode when EHH was in control. At IC, he bought back CC&P, while at CN, he bought WC, DMIR, and BLE in addition to buying back certain Canadian shortline spinoffs.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby MILW261 » Tue Dec 04, 2012 4:43 pm

Get a load of this: CP wants to spin-off the DM&E west of Tracy, MN:

http://www.railwayage.com/index.php/fre ... channel=50

Now why on earth spin it off from Tracy and not from Winona like the Chicago and North Western did? It makes absolutely no sense to me why CP would want to keep the DM&E east of Tracy.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby CPF363 » Tue Dec 04, 2012 7:37 pm

Any word on what CP plans to do with the D&H from today's meeting?
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Re: The end of CP reign at the D&H and the D.M.&E

Postby JayBee » Thu Dec 06, 2012 6:52 pm

MILW261 wrote:Get a load of this: CP wants to spin-off the DM&E west of Tracy, MN:

http://www.railwayage.com/index.php/fre ... channel=50

Now why on earth spin it off from Tracy and not from Winona like the Chicago and North Western did? It makes absolutely no sense to me why CP would want to keep the DM&E east of Tracy.


The reason for Tracy is as follows;

1) CP wants to control the outbound traffic of the future shortline including the Ethanol from Aurora, SD
2) Tracy is a division point so there is a small yard there to facilitate interchange.
3) Shuttle Elevator at New Ulm, MN that CP wants access to.
4) Possibility of Frac Sand loading along the eastern portion of the DM&E.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby JayBee » Thu Dec 06, 2012 6:53 pm

CPF363 wrote:Any word on what CP plans to do with the D&H from today's meeting?


Nothing being sold at this time. But obviously changes in train operations have been happening, and more tinkering is likely.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby MILW261 » Sun Dec 09, 2012 5:45 am

But isn't the small yard at Tracy usually full of cars for Tracy Cement and ergo would require the addition of a couple more tracks for interchange purposes?
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Re: The end of CP reign at the D&H and the D.M.&E

Postby mtuandrew » Mon Dec 10, 2012 12:27 am

MILW261 wrote:But isn't the small yard at Tracy usually full of cars for Tracy Cement and ergo would require the addition of a couple more tracks for interchange purposes?

CP would have an entire few hundred miles of track to re-lay if they need more capacity at Tracy Yard.

It sounds like they are fishing for a shortline with SD support to take on the entire line from Wolsey or so west. Maybe they would even get rid of the entire Winona & St. Peter for the right price - it doesn't seem to be a particularly important part of the company's portfolio.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby JayBee » Wed Dec 12, 2012 7:44 pm

CP would have an entire few hundred miles of track to re-lay if they need more capacity at Tracy Yard.


I don't follow you.


It sounds like they are fishing for a shortline with SD support to take on the entire line from Wolsey or so west. Maybe they would even get rid of the entire Winona & St. Peter for the right price - it doesn't seem to be a particularly important part of the company's portfolio.


Selling the line to Minnesota City or Winona would give the Shortline access to the Mississippi River and possibly to the Union Pacific. While currently you can have a paper barrier which prevents Interchange without CP's consent, I believe that CP is concerned that at some date in the future the Paper Barriers could be invalidated. For this reason CP is erecting a physical barrier. Plus there is the Frac Sand.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby mtuandrew » Fri Dec 14, 2012 12:03 am

JayBee wrote:
CP would have an entire few hundred miles of track to re-lay if they need more capacity at Tracy Yard.


I don't follow you.

Sorry - from the track they would abandon further west.

JayBee wrote:
It sounds like they are fishing for a shortline with SD support to take on the entire line from Wolsey or so west. Maybe they would even get rid of the entire Winona & St. Peter for the right price - it doesn't seem to be a particularly important part of the company's portfolio.


Selling the line to Minnesota City or Winona would give the Shortline access to the Mississippi River and possibly to the Union Pacific. While currently you can have a paper barrier which prevents Interchange without CP's consent, I believe that CP is concerned that at some date in the future the Paper Barriers could be invalidated. For this reason CP is erecting a physical barrier. Plus there is the Frac Sand.

UP and BNSF both, though I don't recall if BNSF retained the right to run into Winona once the bridge was shut down.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby Alcoman » Sat Dec 29, 2012 9:30 pm

Maybe another regional railroad should take the D&H off CP's hands cheap. Lots of possible railroads in mind too.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby JayBee » Sun Dec 30, 2012 4:06 pm

Alcoman wrote:Maybe another regional railroad should take the D&H off CP's hands cheap. Lots of possible railroads in mind too.


For mtuandrew, CP had interest within 24-hrs of announcing their desire to sell the west end of the historical DM&E. The big question is how much, at what price.

For Alcoman, while the D&H south of Mohawk Yd. and west of Albany, is obviously under a degree of threat, I very strongly doubt that the portion of the D&H between Rouses Point and the Port of Albany is under the slightest threat as long as the Bakken Oil is flowing. Many people misinterpreted EHH statement of giving the Oil trains to the NS or CSX rather than using the convoluted routing intended to maximize CP's share of the revenues divisions, this applied to the trains destined to the Greater Philadelphia area rather than to the trains to the Port of Albany.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby Minneapolitan » Mon Feb 04, 2013 3:10 pm

I work on the DM&E. Here's what I can say for certain: The rumor mill is the only well-oiled machine.

But isn't the small yard at Tracy usually full of cars for Tracy Cement and ergo would require the addition of a couple more tracks for interchange purposes?


The Tracy yard is very small, and a pass track accommodates all trains stopping their for crew change. I've never seen any major congestion issues there. Also, there's no cement there. I don't know from where that idea came. There's a small elevator there in town that occasionally takes in a few cars here and there. The New Ulm wayfreight job handles that. There's a wye track there, a maintenance-of-way office, and...a garden hose for watering locomotives. That's about it.

Tracy East: The DM&E east of Tracy is still very profitable. Personally, I think everything up to Pierre is profitable, but I'm not Harrison. Indeed, there is serious frack sand speculation around St. Charles, MN, on the far-east end about halfway between Minn City and Rochester. Two of the three ethanol plants on the DM&E are east of Tracy (I don't know from where those other plants listed came), one at Janesville and one at Lamberton. The third is in South Dakota at Aurora, and I believe it's slightly larger that the other two. There are FOUR elevators that take in unit grain trains: New Ulm (downtown), Harvestland Co-op (east of Springfield), Lamberton and Walnut Grove. These are BNSF unit grain trains that transfer to the DM&E at Florence, just west of Tracy. The BNSF power stays with the train. In the last six weeks or so, we've had a couple of unit KCS grain trains come up from Mason City, but not with KCS power. We've heard that Union Pacific just recently outbid BNSF on these elevators, but so far we haven't seen any actual evidence of this.

There is virtually nothing west of Pierre until you get to Rapid City where you have a cement plant, not sure how much it still ships by rail. Then at the far end of the line you have the Bentonite Clay processing plants. They produce a reasonable volume of traffic, but the tariff is low and the distance to Huron is significant, if the plant produce a more valuable product that could afford a higher rail tariff then CP might not be looking to sell, but the revenue from hauling the Bentonite doesn't cover the costs of track maintenance west of Pierre. Short hauling the Bentonite to Crawford, NE (BNSF) is better.


This is correct. The clay is good business, but the track between Pierre and Rapid City is horse crap. There are spots along that stretch where one can take a six-foot iron pick (MoW tool) and drive it four feet into the ground with your bare hand. I don't know how the DM&E ever expected to operate loaded coal trains over it. It's amazing the C&NW actually built there. Oddly, the old Milwaukee Road line to Rapid City, which is largely still intact but in absolutely horrendous condition, isn't too far south of this line and is built on normal, sturdy ground.

The rumors:

One idea I heard is that CP really does want to sell the entire DM&E, and they're trying to get serious offers to buy west of Tracy. When someone comes around with a serious offer, CP says they'll give them the whole thing for a little bit more. It's the ol' bait-and-switch. But if that idea goes bust, CP still keeps the Waseca Terminal portion of the DM&E, which is still profitable. Remember, they're just rumors.

Another rumor is BNSF buying west of Tracy. BNSF connects with the DM&E at two different locations: Wolsey and Florence, both of which are west of Tracy. This would fit into the BNSF system rather well. The one problem is that this would give BNSF, more or less, a monopoly in South Dakota. That miserable section from Pierre to Rapid City would be toast. Apparently BNSF officials have been out in South Dakota looking at this property very seriously. But all that funnels into the Waseca portion of the DM&E, so I can't imagine why CP would sell to BNSF when all that revenue would be transferred to BNSF at Wolsey and Florence.

I've also heard that former DM&E owner Kevin Schieffer is interested in buying the DM&E back, and has some scheme up his sleeve involving shortline Dakota Southern and that crappy ex-MILW track to Rapid City I mentioned earlier. Why a guy who made a BILLION dollars with the swoop of his pen would want to get back into this business rather than bask in the Caribbean sun for the rest of his life is beyond me. Like I said, they're all just rumors.

The only way Union Pacific would be part of this picture is if they could buy the entire thing. It would also fit well into their system: The UP is already in Winona and goes on to Chicago, and Waseca is practically next-door to Mankato, on former C&NW's Omaha Road from St. Paul to Sioux City and beyond. The Waseca yard would undoubtedly be closed and moved to Mankato where there's a very active yard. The DM&E funnels directly into that yard from both directions, and virtually nothing physical would have to change.

The one thing about which I feel certain is that the track from Pierre to Rapid City will not survive. It just won't. If Tracy West really is sold off to shortline operators, no one in their right mind would try to use it.
Nickel Plate Road should have merged with ERIE.

Duh.
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Re: The end of CP reign at the D&H and the D.M.&E

Postby mtuandrew » Tue Feb 05, 2013 8:17 pm

Minneapolitan wrote:I work on the DM&E. Here's what I can say for certain: The rumor mill is the only well-oiled machine.

...

Oddly, the old Milwaukee Road line to Rapid City, which is largely still intact but in absolutely horrendous condition, isn't too far south of this line and is built on normal, sturdy ground.

...

I've also heard that former DM&E owner Kevin Schieffer is interested in buying the DM&E back, and has some scheme up his sleeve involving shortline Dakota Southern and that crappy ex-MILW track to Rapid City I mentioned earlier. Why a guy who made a BILLION dollars with the swoop of his pen would want to get back into this business rather than bask in the Caribbean sun for the rest of his life is beyond me. Like I said, they're all just rumors.

There isn't really any potential online traffic on the MILW past Chamberlain, is there? Not that there's anything on the DM&E west end either, but it's worth asking.
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