Maine Propane (LPG)

gokeefe wrote:I've been pondering the relationship in Maine between propane traffic and strong rail service. Propane is interesting to me as one of the few freight types common in Maine that involves low volumes of carloads with a lot of local switching. This type of service for other commodities, such as lumber, often seems challenging for shippers to obtain in Maine unless they are located relatively close to other online shippers. Propane on the other hand seems to be a customer and load category that Pan Am (and other railroads) are more than happy to switch and serve.

Propane also has recently transitioned in Maine from being a gas fuel used universally throughout the state to being a fuel primarily in demand in more rural areas. This to me seems to be a natural consequence of the build out of urban and suburban natural gas distribution. Propane has also become more popular as a heating fuel due to its stable pricing and the efficiency of the appliances that use it (tankless hot water heating and very high efficiency boilers).

In terms of rural development it is interesting to note that there are several branch lines that have the potential for construction and operation of propane terminals that would improve propane distribution opportunities in the local area. There are at least four that immediately come to mind in central Maine, the Rumford Branch, the Lewiston Industrial Track (Lewiston Lower), the Augusta Branch (Waterville to North Augusta), the former Lower Road (through Gardiner), and the Mountain Branch, either at Westbrook or potentially a few miles beyond (not all the way to Fryeburg).

The question in my mind is whether or not the resulting base loads would be attractive to Pan Am. How big does a new terminal need to be in order to be worthwhile to serve? Obviously an online customer on the Rumford Branch could be almost any size and receive service. But what about something like the Lower Road, perhaps if the customer was in Richmond (somewhere not very close to the existing end of current service at the interchange). Same question with the Mountain Branch, if there was a propane terminal requiring weekly switching how much further up the Branch could it be before Pan Am felt it was too far to be worth it? Obviously Fryeburg is too far, but what if its only another mile down the line from the Sappi switch in Westbrook?

None of these. Right off the mainline somewhere or near a yard where the locals can get at it. The exercise is where the service can be best not what branch it would be nice to see it on.

OK very sensible. Thanks for the perspective.

How about looking at the current rail-served terminals serving (but not necessarily in) Maine - this is probably close, but not complete: Caribou, Hermon (3), Auburn, Portland, Biddeford, Westbrook, Biddeford, Newington, NH and Rochester, NH. Others? The point is that, with the exception of parts of the County and Washington County (pop 33,000), a propane railhead is less than 50-60 miles from most every town of consequence in the state. Opening up little one-spot terminals in Maine wouldn't increase propane use, nor would it affect overall rail deliveries/rail market share.

There is a Suburban Propane facility off Gambo road in Windham, situated right beside Sen. Diamond's "tracks to nowhere", a.k.a. the mountain division. There may have even been a siding into the location at one point in time. Could be the Golden Eagle's first revenue customer, if not for that darn half mile of missing rail!!!

There is a Suburban Propane right next to PTC with a siding and they don't use rail. I can't actually think of them using rail anywhere.

Not only that, they're giving up their rail-adjacent Portland location to move to a different area of Portland that doesn't have rail access. Seems pretty clear at this point they aren't interested in rail.

The Suburban Propane yard in Marlboro, MA, had rail service from the Fitchburg Secondary, but disconnected. Supposedly, CSXT tried to get them back by offering to do drops at the adjacent salad-dressing manufacturer (don't wanna mix up those tanks), but it was no sale. Dunno if rail-free is a Suburban policy or if Marlboro was waiting for the North Grafton facility to go on line. Otherwise, it's Selkirk.

Not that it's in Maine, but haven't been by Suburban Propane in Milford N.H in eons, they got, or used to get propane by rail !

There's also a Suburban/Maingas location with disused spur in Fairfield on the Shawmut branch. I posted about Suburban's strategy in 2014: Suburban consciously moved away from rail years ago.

Cowford wrote:Suburban consciously moved away from rail years ago.

I knew that we had clarified the fact that this had occurred. But I don't remember if there was any hint of the reasoning. Any indication of why?

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Thank you very much for the reminder. It's interesting to see this company making the choice that they do.

The decision to focus so heavily on retail is fascinating on many levels. Also interesting to note the two very distinct ideas about how to move this industry forward in Maine.

One choice is to build a bulk facility at Rigby (or somewhere similar) the other would be to try and reactivate smaller terminals at the end of branchlines. The former seems to have much more traction at this time.

It has traction, simply because it's easier and makes more sense. As mentioned above, of what use is a small terminal, especially at the end of a low-margin branchline, to rail service? Seeing the cost of RR maintenance, and the high cost of building/maintaining even a small siding/spur, that isn't going to work for either an outfit like Suburban, or the efficiency of the RR serving it. If a mill like Madison wasn't enough carloads to sustain it's own minimal-standard trackage upkeep, how is a tiny terminal that gets a few cars once a blue moon enough to even justify thinking about serving them? Especially if they exist on/near rail-less RoW's or OOS track.

For Pan Am, "not worth it" of course. For CMQ which is contracted to operate the Rockland Branch by the Maine Department of Transportation the math is probably different. Why? Because MDOT is engaged in a purchase of services contract (using revenues available from the line to buy the service itself) as opposed to attempting to run the line as their own.

That being said, I completely agree that CMQ might not be able to quote an attractive rate to a potential shipper with such low volumes. The only reason I think Pan Am would even go along with this kind of customer in the first place is if the traffic is included as part of an ongoing interchange (which it would be).

gokeefe wrote:For Pan Am, "not worth it" of course. For CMQ which is contracted to operate the Rockland Branch by the Maine Department of Transportation the math is probably different. Why? Because MDOT is engaged in a purchase of services contract (using revenues available from the line to buy the service itself) as opposed to attempting to run the line as their own.

That being said, I completely agree that CMQ might not be able to quote an attractive rate to a potential shipper with such low volumes. The only reason I think Pan Am would even go along with this kind of customer in the first place is if the traffic is included as part of an ongoing interchange (which it would be).

The math is very different because Dragon Cement is a much bigger customer than any prospective propane terminal, and there's a yard in Brunswick for a landlocked operator to do easy interchanging. That and the Rockland has generally good state-of-repair from end to end. It was a very easy pick-up-and-go contract for CMQR that guaranteed them decent profit margins from very low barrier of entry.

That is not a model that can be applied anywhere else. Especially not any scenario where MEDOT buys the Madison and CMQR sets up another isolated shuttle operation. Madison got embargoed because track conditions were so awful that the branch would've been quickly declared inoperable without major infrastructure investment over all 20 miles of it. The average carloads from the anchor customers had dipped below the point where such onerous infrastructure renewal would ever pay itself back, and prospects for signing on any new customers were slim to none. Barring a miracle rebirth of the full-capacity mill, there's no business base that can justify the up-front cost. One of the other customers was already relocated to the Rumford Branch, and with the mill likely gone for good there aren't enough "shootin' free throws" customers like LPG that could feasibly pack on it to approximate the same carloads it was doing at the end. Carloads that weren't enough to keep it in operation.

There is no plausible scenario where Madison sees another train. It's an abandonment-in-wait. As described in the last several posts, LPG thrives best as "shootin' free throws" pickups on mainlines or secondaries with good density of pre-existing locals to latch cheaply onto, attached to yards, a stone's throw away from a yard, on an off-main 1/2-to-2 mile industrial track that costs pennies to maintain, or some sweet-spot combination of scenarios (a la Amerigas on the Canal Industrial an 8-minute scoot out from Plainville Yard). Long, desolate branches of dubious state-of-repair are the last place they can make the railroad viable money.