CP and NS deal for D&H operations

CP has made the following announcement aboun changes to D&H operations involving NS. While this will involve some significant changes it doesn't look as bad as was suggested when CP first announced it "restructuring" a year and a half ago.


CPR and Norfolk Southern Railway (NSR) announced today they have signed a memorandum of understanding that will increase operational efficiency and enhance rail services to customers in the northeastern U.S. The agreement provides a new opportunity to quickly begin the turnaround needed on CPR's northeastern U.S. (NEUS) franchise. It will also strengthen the U.S. portion of CPR's highly competitive Montreal-Chicago corridor by opening up a new lane that will be the shortest, swiftest route between the key hubs of Detroit and Chicago.

The agreement is for an exchange of trackage rights, freight haulage and yard services, and is the initial outcome of a comprehensive review of options for addressing our challenges in the NEUS.

Here are the major components:

Yard consolidation to reduce operating costs and increase productivity. CPR will cease yard operations in Buffalo and shift all freight marshalling to the NSR yard there. NSR will shift its yard operations in Binghamton to CPR's East Binghamton yard.

Freight haulage arrangements. CPR will be able to move NSR freight traffic between Rouses Point and Saratoga Springs. NSR will move CPR's freight traffic between Binghamton and Buffalo. (This new haulage arrangement replaces CPR's current trackage rights agreement with NSR between Binghamton and Buffalo.)

Trackage rights arrangements. CPR will operate its own trains over a new shorter and lower-cost NSR route between Detroit and Chicago, once NSR connects two existing rail lines. NSR will operate its trains over CPR's line between Saratoga Springs and Binghamton.

The yard consolidation will create new efficiencies for both CPR and NSR. The trackage rights and haulage arrangements with NSR will provide opportunities to generate new revenue and reduce operating costs on our NEUS franchise. NSR is expected to complete the track connection for the new Detroit-Chicago route in the next year.

It will take hard work and dedication from all involved to quickly translate these changes into profitability for our NEUS franchise. There may be further opportunities to optimize our assets so that our NEUS franchise achieves a level of profitability that makes it self-sustaining. This is our goal and we will continue to examine opportunities that will, in concert with the NSR agreement, help us achieve it as quickly as possible.

The impact on employment at CPR is mixed. Four new jobs will be created and 29 will be eliminated on the NEUS for a net reduction of 25 positions. CPR also expects to add between 40 and 45 train crew positions in Elkhart, Indiana, as a result of the new route between Detroit and Chicago. Many of these new crew positions will be available to NEUS employees whose positions are eliminated. The process for filling these positions will be communicated as details are ironed out. CPR will pay the cost of relocation.

CPR will follow established guidelines for employee reductions, including federally mandated labor protection, which is expected to be imposed by the U.S. Surface Transportation Board.

We established CPR's presence in the NEUS with the purchase of the D&H in 1991, when it was in bankruptcy protection. We have worked tirelessly since then to turn it around. The NEUS franchise is positioned solidly as a bridge carrier with access to a market of more than 45 million people. Let's work to make it a success for the long-term.

From the Yahoo! Groups "DandH" List:

I just back from the employee meeting in Saratoga..........

I'll make this short and sweet, more details will be out in the coming months......

CP has given NS haulage rights north of Saratoga, this will require up to two more pool crews.
All current NS traffic hauled by D&H will stay D&H, ie 168/169, coal trains

NS will hand over all control of Binghamton to CP, NS locals will operate out CP controlled Binghamton, and all switching will be done by the D&H

SK Yard will close and lose 29 positions, D&H will give up trackage rights east of Buffalo. NS will assume SK yard duties. CP trains with TH&B crews will still go to CSX and NS. Our trains will be under a haulage agreement to Bingo.

South of Bingo, nothing WILL change!!!!!

Here's the BOMB!!!!!!!
CP will establish a new crew base in Elkhart, IN.......a new connection will be built in Butler and Elkhart to connect to the NS. Chicago to Detroit, with Elkhart as the crew base for 40-44 running trades. The CSX line will no longer be used! D&H crews may have first rights to jobs there......Glen Davis of the D&H will be the Service Area Manager of Elkhart.

None of this will happen until the STB approves this maybe November.......SK will close in December.


Rob D

so the guy in Buffalo who posted the rumor about job losses at the yards there and NS running over the entire D&H was right about that part, just wrong that it was a sale to NS

smart moves for both roads

it will be interesting to see exactly what traffic NS tries to develop in the Montreal lane... will we see a hot Montreal-Atlanta intermodal via Hagerstown?

another thougbt is that NS will be looking to the MM&A to end-around Guilford

NS going around Guilford through MM&A? Can you futher explain?

I wonder if this will put the stops to the CP Montreal-NYC run via CSX-Metro-North. I would think CSX would love to do that.

CP got trackage rights from CSX down the Hudson line as a result of the Conrail split, and anything further CP does with NS won't affect them, no matter how much CSX may dislike it.

>>>NS going around Guilford through MM&A? Can you futher explain?

In the post CR years, there has been traffic that has generally flowed north-south to NS and CSX to/from Guilford and connectections to northern New England and the Martimes. The D&H has been the bridge route between Guilford at Mohawk and the southern roads at various points over the years.

With the former CP International of Maine and the old BAR operating under the MM&A flag, an NS operation via the D&H to southern Quebec opens the possibility of seeking new traffic lanes in direct conjunction with the MM&A to get access to Maine and the Maritimes by cutting Guilford out of the picture.

Also, the use of the D&H gives NS the opportunity to set up a direct routing of Portland via the A&StL (former GT).

If NS is so inclined, they could move all thier traffic off Guilford that is not going to customers whose sole access in Guilford.

Why cut Guilford out?

Two reasons: 1. Devalue the property for eventual acquisition. 2. Give NS a longer line-haul of the traffic and reduce some routings by one less interchange partner.

I think both of these are valid. As of now, the NS doesn't have a strong hold in Quebec. I am not sure what traffic they see coming out of the Montreal area itself that the D&H couldn't already have.

It will be interesting to see what NS has planned.

John

Is SK Yard know by a better, more familiar name? Where is it?