D&H Rights on Sou. Tier /CNJ Rail

Who is CNJ? Do they own or operate any track at present? If they are in Bridgewater, NJ area, what do they really want with the Southern Tier Line? Thier actions don't make sense unless it is to get STB and court clarifications and interpetations of laws and rules.

Hello all,

I'm back...... It was a really crazy weekend. Looks like some more was said since I posted last, so I'll try to be brief and to the point (if I can be , after all, this is me .....).

To finish my thoughts in my previous post. The issue here that I found to be most compelling was the question of how does one preserve the second carrier in a consolidiation proceeding when

The railroads use a petition for exemption to extricate themselves from the provisions of section 10903. By doing so, shippers were not required to be noticed until AFTER the decision had come down from the board, and then, because these are trackage rights and not a line of railroad, they could only subsidize continued service from the carrier who chose voluntarily to leave the market.

Yes, no shippers objected to the proposed discontinuance, but then again, they never knew about it until after the decision was served. Read the decision of January 19th. The board ordered CP to notify the shippers, but at that point, what could the shippers really do about it?. The impact of this will be felt not only in NY State, but also the region in general.

This is an issue that I agree with CNJ on. The board should not allow any carrier the ability to seek these exemptions to get out from underneath their common carrier obiligations this way when they are the competition to the underlying carrier. Trainlawyer, I know you don't like CNJ's people, but the issue they raised is important. This situation could repeat itself again.

Now, as to potential traffic and my comments regarding the stand alone potential of these rights. It never dawned on me that the D&H, NYS&W container trains never actually touched any of D&H's actuall owned system. Interchange was at the former Erie yards in Binghamton. NYS&W trackage rights directly to D&H trackage rights. I believe the two carriers trackage rights over lapped between milepost 212 and 213.

If you noticed, CP kept rights around Binghamton. Two miles outside of town in each direction MP 210 to 217. The question I ask is - Why? They don't need them. They don't need them to interchange with with the NYS&W, they don't need them to move there own trains through town. They are now a north - south railroad. No need to go east west. If necessary, they could establish recrew points with the NS at any location the two so chose too. Why do they need trackage rights. Interchange protocols would have sufficed. But no, they specifically retained those rights. I'm going to let others speculate here. I'm pretty sure I know what CNJ was thinking when CP did that. Did CP hold on to them in case they were ordered to convey the rights across the southern tier to somebody else because of the 2 to 1 consolidation?

Since CP's East Binghamton yard lies well east of the NYS&W interchange. Could CNJ have been a bridge line for CN traffic to the NYS&W? If so, it would have created a third NY - Chicago route (NYS&W - Bingo- CNJ - Buff - CN via Hamilton, London and Sarnia - GTW). Note: in both CP's and NS' response to CNJ, both claimed CNJ could not go Bingo to Buffalo, but acknowledge they could move traffic point the points being discontinued.

To answer Trainlawyers claim of no traffic. One need only pick up a copy of Railpace to know of the former CP salt trains between Binghampton and Silver Springs (50+ cars). To the readers of this forum, How long were the D&H trains prior to March 14. I would speculate over 50+ cars each night. CNJ told me their sources inside CP pegged that daily number much higher. CP still shows one train a day in each direction between Binghamton and Toronto, albeit, it's now a NS train for part of the way. Now, Trainlawyer , CNJ management may be "demented' , and I know you'll never be nice to them, but to say there's no traffic between the points is not in keeping with the public record.

Also, CP's haulage agreement with NS would not have become effective until after the discontinuance. Had the OFA process begun, and, for the purpose of these comments, been successful. CP would have had to either: 1. tried to negotiate a new deal with NS or 2. given the traffic to CNJ to bridge. I agree with you Trainlawyer, there was no way CP or NS would have allowed CNJ to do either.......

Which leads me to s4ny and Henry6's comments. What does CNJ want out of this? As Trainlawyer has pointed out more than once, 1. Laywers don't come cheap and 2. to practice before the STB costs $$$. CNJ is obviously spending some money. It strikes me that there must be something that we all are missing.

Why, and to what end..... Anyone care to speculate.

Well that's all (for now) folks..... Next time, I'll speculate on why I feel the CNJ folks will be able to KO the exemptions. By then, we may see they next filing regarding the D&H either before a court, or before the board.

See ya all later............

We are watching a chess game but cannot see all the pieces. As others have stated, CNJ is spending real money so they think they can gain something. Some possibilities:

1) Get in the middle of the deal struck between CP and NS to streamline operations and then get paid to go away.

2) Create a third Chicago - NY trunk line as suggested by the Rising. Perhaps as a stalking horse for CN. (Not having that 7 miles in Binghamton between MP 210-217 might be a problem.)

3) Actually operate as a railroad, haul freight cars, and try to build traffic.

4) Operate as a railroad and eventually take full control of the Southern Tier Line west of Binghamton. Perhaps they see some value in the right of way outside of the railroad business. I see that the Empire Pipeline is proposing an extension to Corning which would connect with the proposed Millenium Pipeline which seeks to deliver Canadian gas to the NYC market via a route thru Suffern NY.

http://www.natfuel.com/Empire/EmpireCon ... boutUs.htm

I think I've learned more about RR law in this thread than anywhere else! These legal wranglings do make me question Walter Rich's judgement- why did he ever let NYS&W give up trackage rights on the Southern Tier? Considering his shrewd foresight to build the stack train market back in the '80s, I don't understand his lapse in judgement. Past scenarios like those stack trains, the old Alpha-Jet trains, D&H's takeover of the old LV Apollo runs, etc. are proof that alternative trunk lines can work.

Seems to me that Rich traded in his independence for short-term profit when he let CSX and NS buy out Suzie-Q, thus ending NYS&W's tracvkage rights to Buffalo. That's one of the biggest drawbacks to American business these days. Too many CEOs and bean-counters are looking at the quarterly, monthly or even weekly balance sheet without thinking about the long-term scenario.

Certainly Owego & Hartford would benefit from the presence of a 2nd carrier on the Southern Tier line, and they have stated this in their legal filings. It was also the presence of a D&H connection at Silver Springs that allowed the Rochester & Southern the benefit of a direct haul to the B&P in Buffalo (as opposed to interchange in Salamancea).

However, the presence of D&H/CP and NYS&W have had no bearing whatsoever on the operations of other Southern Tier shortlines like the Bath & Hammondsport . In fact, the B&H has never connected to more than one freight carrier at a time during its entire history. Its traffic has actually grown during the tenure with NS as its only interchange partner. Furthermore, the Wellsboro & Corning has connected solely with CR and NS, to no apparent ill effect.

So I really haven't made up my mind yet. I gotta applaud the legal eagles like Meghan, The Rising and Trainlawyer for their considerable insights. I guess the best thing to do is sit back and watch the proceedings, since they don't directly impact me...

I don't remember the NYS&W ever having trackage rights on the Southern Tier west of Binghamton. I thought they always used the D&H's rights but ran their power through.


Perhaps the CP kept the trackage rights in place around Binghamton for turning trains around the very large wye? Granted you may not need 2 miles each side of town, but it was an easy way to include it.

Chris

I think the NYSW trackage rights were D&H rights when Walter was the D&H caretaker. Under CR it was in his interests but with NS and CSX there is no need for him to exercise further rights as there are three competeing roads in Buffalo and Albany ( NS,CSX,CP) plus CN via rights. Guilford is also in the Albany zone. Also at that time NYSW had interests in TP&W which it no longer has. Still, I don't see any reason or rights that CNJ has to get into the middle of this. As I said earlier, the only real reason is get legislation by STB decision to set a precident whereby any railroad anywhere can claim the right to pursue trackage rights anywhere else in the country! It just don't look right to me!

It might not be CNJ at all. They may simply be proxies for someone else or maybe a group of someone elses... Paying some lawyers through a proxy would be a clever way of obfuscating the "real" purpose and beneficiaries, especially if things don't work out. Given the long list of short lines and regionals present along the tier, perhaps none of which have benefitted from the Conrail split, it would be hard to eliminate any as benefactors from a transfer/continuation and expansion of CP's rights.

All of this discussion and speculation just hardens my belief that the EL never should have been part of Conrail. That is, no matter how the litigants of the moment try to split it up, gravity keeps pulling it back together.

Conspiracy theories...

Henry, NYS&W's trackage rights west of Binghamton were continued after CP bought D&H, and thus became independant. If NYS&W's trackage rights were dependant solely on D&H, CP probably would have cancelled them. In reality, NYS&W trackage rights on the ex-EL between Bingo and Buffalo continued until 1999, when CSX and NS essentially bought out Suzie-Q. Walter Rich is brilliant and unconventional, so it was kind of a surpries to see him relinquish a business that had become lucrative.

I agree with roc- EL never should have been included in CR. It should have been taken over by N&W or ATSF. Or perhaps MARC was the right idea after all...

I agree the EL should never have been included in CR. It is essentially blamed on EL unions which would not accept Chessie system union rules. But I think there was more to it.

But to take the arguement a few steps furththre, I don't believe the DL&W shold ever have merged with the Erie but rather pursued and end to end partnership or merger with the Nickle Plate and include the D&H into the deal. It actually would have been a strong merger at that time and may even have bolstered the Erie is some odd sort of way.

Matt-
Chris is correct; NYS&W never had trackage rights west of Binghamton. All of the container trains since the beginning of the Sea Land traffic in 1985 where handed over to the D&H at Binghamton for forwarding to Buffalo. No matter which road's (NYSW or D&H) power was on the trains west of BD, they where all operated by D&H crews.
Bill

Henry--
Check out Richard Saunders' book, Merging Lines. He talks about the DL&W/NKP merger prospects. Basically, NKP rejected the merger, before the Erie merger was in the picture. It seems to have been a combination of personality issues, and the fact that NKP was prosperous and DL&W was struggling, and that DL&W had massive debt, plus NJ taxes and commuters. At the time, commuter subsidies were not in the picture. Government agencies still thought that freight profits were enough to subsidize passenger losses, and railroad managers were still afraid of government interference.The older executives would have remembered the disastrous Federal takeover ot the railroads in WWI.

Also Perry Shoemaker had to sell some of the DL's NKP stock to pay for reparis from the 1955 flooding.

I am not disputing the many reasons it didn't happen; just a comment extending the wish that the EL was never included in CR.

Bill, I stand corrected. Thanx for the input.

Henry, you may want to check out Erie Lackawanna: Death Of An American Railroad 1938-92 by H. Roger Grant. It really goes into detail about Shoemaker's attempt to merge NKP and DL&W. The proposed merger really scared Erie, according to Grant, so it probably pushed Erie's desire for merger. Also, Pennsy held stock in both NKP and LV, so it put considerable pressure on NKP not to merge with DL&W.

Personally, I wish that DL&W and NKP had merged, and that Erie had merged with Wabash. The resulting routes would have had much more clout in competing with PC. One or both of those lines would likely still be intact today (albeit under a bigger corporation).

By 1955 it would have made no sense for the Nickel Plate to merge with the Lackawanna. The NKP was in excellent fianancial shape, its stock price and dividend increasing. The NKP had both the DL&W and Lehigh Valley with whom to interchange at Buffalo.

The Lackawanna had a line from Binghamton to Buffalo that generated very little traffic and was designed for westbound rather than eastbound freight. The NY/NJ taxes, inflexible unions, unprofitable branch lines and passenger operations have already been noted.

The LV actually had a better line for eastbound freight but, like the Lackawanna, originated little online traffic on its westernmost 200 miles. That the LV had a better line than either the Erie or the DL&W is evidenced by the speed with which it was dismantled west of Waverly by Conrail, lest it fall into the hands of a competitor.

The Southern Tier Line survives today as the secondary NY-Buffalo line more because of the sequence of events than any other reason. Now, as in the days of Gould, Drew and Fisk, it is pawn in the game of players.

Man, my moderating senses are tingling...... Can we get back on topic here? If you want to discuss the history of the tier, make a new thread.