Who opted not to join Conrail?

Discussion related to the operations and equipment of Consolidated Rail Corp. (Conrail) from 1976 to its present operations as Conrail Shared Assets. Official web site can be found here: CONRAIL.COM.

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QB 52.32
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Re: Who opted not to join Conrail?

Post by QB 52.32 » Sat Jun 01, 2019 9:03 am

Despite Dustin's successes, doubtful the B&M could have survived the 1980's given rail and trucking deregulation that increased competition and removed artificial benefits all the while during an economic recession that took a good swipe at New England's industrial base. Decent probability that this would have lead to inclusion into Conrail by the end of the decade despite the independent reorganization attempt under Dustin's leadership at Conrail's start. This puts into perspective that despite the negativity associated with Guilford, maybe, just maybe, they "saved" the B&M as a competing force within the Class 1 network to live another day.

lvrr325
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Re: Who opted not to join Conrail?

Post by lvrr325 » Thu Jul 04, 2019 6:41 am

A lot of bad info here.

The EL was solvent until Hurricane Agnes. Even then it was not in as terrible of shape as other roads, but money it had set aside to modernize Marion yard and then some was wiped out from the hurricane damage. This is what led them to seek inclusion in the 3R Act that created Conrail.

Initially the eastern portion of the EL was to be given to Chessie to maintain two road competition in New York, however the unions rejected the terms Chessie offered, so it was all lumped into Conrail. There also was a plan to reorganize the EL and include the LV and RDG as a Mid-Atlantic Rail Corporation, again to maintain two systems in the east, that did not come to fruition.

The P&LE was long controlled by NYC and PC but was able to stay out. The Monogahela was kept out until Conrail purchased the portion not previously owned by PC/NYC. The Providence & Worcester split from PC after bankruptcy and stayed out.

Certainly any road who was included could have chosen to attempt to reorganize on their own, as the B&M did.

Spike1724
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Re: Who opted not to join Conrail?

Post by Spike1724 » Sun Jul 07, 2019 6:15 am

P&W was a paper road for about 100 years since leasing it’s line to New Haven. Apparently NH successor, PC wanted to abandon the line. This prompted its owners to elected to resume independent operation.

I’ve wondered if B&M could have made it through the 1980s too. I agree that Guilford’s cuts were necessary, but I think that David Fink’s methods were draconian. Many customers were lost due to poor service during the lengthy strikes. Maybe this was good from the point that the most lucrative customers remained. The approach has the drawback of placing all eggs in one basket. Now the paper industry is in decline, and not much remains.

ExCon90
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Re: Who opted not to join Conrail?

Post by ExCon90 » Mon Jul 08, 2019 3:42 pm

Disposition of the P&W was triggered by the PC bankruptcy. One of the things that happen in a bankruptcy is that the trustees are charged with examining every contract to which the bankrupt railroad is a party to determine whether it benefits the railroad to retain the contract; if not, the trustees have the right and the obligation to disaffirm the contract--I believe they can be sued in their personal capacity by creditors who may contend that the trustees failed in their duty to rid the property of unfavorable contracts. The trustees concluded that the PC was better off without the P&W than with it and disaffirmed the contract. This left the P&W without its only source of revenue; i.e., the lease payments due from PC, which the P&W had duly distributed to its shareholders as dividends. The P&W was thus faced with the choice of either folding or trying to make a go of it as an independent railroad. They chose the latter, and with the help of thoroughly renegotiated labor agreements (and the subsequent Staggers Act) were able to make it work.

Gilbert B Norman
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Re: Who opted not to join Conrail?

Post by Gilbert B Norman » Mon Jul 08, 2019 8:45 pm

The E-L could have stayed out if a 1980 proposal by Japanese maritime interests had moved forth prior to C-Day.

When the MILW was about to abandon Lines West, there was a proposal by these maritime interests to purchase Lines West from the MILW Estate (Bankruptcy petition filed Xmas 1977 - the "tame anytime" office parties were essentially a funeral wake) with the hope of having more control over distribution of their ladings.

Beyond the Chicago Tribune reporting of the proposal, nothing further was heard. As quite lowerling management at the MILW, I learned nothing.

But what if these interests wanted a true Land Bridge under their control to handle Asia-Europe shipments? They could have gone after the ERIE and had control of a truly transcontinental road to ensure that containers docked in Seattle or Tacoma were at the Port of NY for a sailing 120 hours later.

It would have been a "hot setup", but now with the abandonment of Lines West and Neo-PANAMAX, it will be a never happen

ExCon90
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Re: Who opted not to join Conrail?

Post by ExCon90 » Tue Jul 09, 2019 2:59 pm

I believe they concluded that there wasn't enough landbridge and mini-landbridge traffic by itself at that (pre-double-stack) time to support such an operation. I think it's significant that the Japanese lines took a good look at it and decided against it. An interesting aside is that owing to the language of the Interstate Commerce Act, rail transportation of traffic originating outside the U. S. and terminating in another country outside the U. S. was not subject to rate regulation by the I. C. C.--they wouldn't have had to publish a thing. However, the mini-landbridge (i.e., Far East-New York and California-Europe) traffic was far more significant and entirely--and heavily--subject to such regulation. Would have been interesting to watch, however; no other traffic to get in the way--except in getting across Chicago?--and Croxton could easily have handled it.

QB 52.32
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Re: Who opted not to join Conrail?

Post by QB 52.32 » Sat Jul 13, 2019 10:06 am

The short-lived idea of steamship line interests purchasing the MILW Pacific Lines and/or the EL were just that because it was a bad idea and history has shown this to be true. Fans lamenting loss of either property should take note of this when it comes to "woulda, coulda, shoulda". Probably the only ones to have benefited by the idea were the consultants who studied this (one of whom I am acquainted with).

Here's what history has shown us that would have made this an unsustainable idea: you would have had a capital-intensive business buying undercapitalized capital-intensive businesses with market and competitive limitations for which they had no expertise; Asian production has been shifting westward and relative political stability has made the Suez canal viable; Panama Canal-to-East Coast ports with increasing ship capacities has provided an effective competitor to MLB as has transloading and supply chain DC's at West Coast ports; infrastructure investment lock-in would have eliminated beneficial inter-port/inter-railroad competition and flexibility opportunities as well as with the aforementioned; and, in terms of the Japanese, their economy never attained the domination once anticipated. One might also draw some conclusions, too, from the results of CSX's investment in a steamship line as a corollary to this idea.

Gilbert B Norman
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Re: Who opted not to join Conrail?

Post by Gilbert B Norman » Sat Jul 13, 2019 10:36 am

Mr. QB, thank you very much for stepping forward and corroborating the Japanese maritime proposal to buy MILW Lines West from the Estate. I knew it first hand (not saying at my pay grade privy to much more), and after one Chicago Tribune article, it was never seen or heard about again.

Acquiring the ERIE was simply speculation on my part; but if maritime interests wanted a "Land Bridge", it was there
until it too was abandoned.

The "Land Bridge" was a "hot topic" during the '70's; Ninety Six hours Coast to Coast seemed doable if on one road and properly coordinated with dockings and sailings on both coasts.

But let's be honest; speed is nothing the maritime companies sell; they sell ton-miles of transportation at a cost that no land carrier can match - and as I've often noted at the several maritime related topics around here, God does not assess user fees for his rights-of-way.

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