• CMQ Profitability

  • Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).
Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).

Moderator: MEC407

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  by CN9634
 
Cowford wrote:
I don't think I said anything about big, all or nothing contracts.
gpp, my comments were not directed to you, but to CN. What I'm saying, with respect, that I don't get this:
CMQ is essentially three systems, the Quebec portion, the Maine portion from Brownville south, and the Bridgeline inbetween BJ and Farnham. What you want to focus on is revenue per carload subdivided by each commodity within each of the three lanes.
Let's take this one step at a time...

So what you're saying is: A car of propane comes in from Sarnia ON over western connection and runs over "bridgeline" to "Brownville south" to a receiver in Hermon... so in analyzing traffic/profitability, etc. one would need to apportion the revenue between the two segments, correct? If so, how would you do it in this case, if the entire CMQ division was, say, $1,000/car.
I'm looking at costs not revenue. My goal is and always has been to make a lean, mean, efficient transportation system when I go into projects. The accounting, sales and marketing people can worry about the pricing, I just tell them how much it costs to make the thing work. It would be foolish to price something without understanding what it takes to run it. Also, it is foolish to consider your system as a whole and not segmented. The one size fits all is an antiquated model, and CMQ knows this. So if you tell me a $1,000 per car coming from Sarnia, ON to Hermon, I'm going to figure out how much it costs me to move that car from my interchange to Brownville over my bridgeline. Then I'm going to figure out how much it costs me to move it from Brownville to Hermon. Then I'm going to try to find a way to reduce the cost of the one which was more (or both if needed)... in this case I'm sure you can figure out which one that is. In terms of reducing cost per carload over certain lanes, theres a lot of things you can do but for the most part you can either tweak your train operations to match service requirements that will sustain and promote growth of your corridors, or you can focus on building density on your trains (while reducing risk of single revenue source, everyone should know Porter's 5 forces). For railroads, you want to do both of course. Understanding your cost (RR is a highly fixed cost industry so that isn't hard) to operate and what you need to make that happen isn't rock science. You also know your carrying capacity at those costs and you want to build line density to reduce your cost per carload. Then, you can worry less about every single car making money and more about the train itself making money.
  by Cowford
 
CN9634 wrote:I'm looking at costs not revenue.
Was your earlier admonition not to focus on revenue per car?

Please consider that as foolish as it may be to price something without understanding costs, it's equally foolhardy to cost something in a vacuum. The proper way to price is to determine the VALUES of your service offerings and designing a service mix in such a way that produces sustainable contribution margins. Those margins will differ from market segment-to-market segment, e.g., chemicals will generally earn more than wood chips, but hauling traffic that doesn't earn its variable cost is a recipe for disaster... as in: "I lose a dollar on every widget I sell, but I make it up in volume."
Then I'm going to try to find a way to reduce the cost of the one which was more
On an absolute basis? By segmenting and comparing the two you are going to compare apples and oranges, as one segment would be a longer-distance overhead move, and the other a short distance received move. And without consideration as to pricing/contribution, you'd always choose routing traffic over Northern Maine Jct in order to eliminate the overhead segment costs.
  by CN9634
 
Not sure where to post this but here is a new presentation from John Giles at NEARS outlining CMQ's future. Also, the next financial quarter results will be out November 2nd including car counts for Q3'16

http://nears.org/2017_updates/FALL_2016 ... LL2016.pdf" onclick="window.open(this.href);return false;
  by Zeke
 
After Megantic many of us gave up on the MMA and it's possible successor and in reality the main line became a true streak of rust. I linked to one of the videographers IIRC Maine train chaser and his videos of 70 to 100 car long Job 1 and Job 2 tooling along surfaced right of way, new ties, some welded rail sections and train speeds in a few spots of what appears to be 40 plus mph. Giles is apparently the right man for the job and it seems he is really putting maximum effort in reviving the line. Amazing !
  by MEC407
 
Zeke wrote:I linked to one of the videographers IIRC Maine train chaser and his videos of 70 to 100 car long Job 1 and Job 2 tooling along surfaced right of way, new ties, some welded rail sections and train speeds in a few spots of what appears to be 40 plus mph.
Could you possibly post this link again? I wasn't aware that CMQ was operating at 40 MPH anywhere on their system.
  by KSmitty
 
MEC407 wrote:Could you possibly post this link again? I wasn't aware that CMQ was operating at 40 MPH anywhere on their system.
They are not. 25 across the Moosehead for the most part. No 40's anywhere that I'm aware of. Certainly none in Maine.
  by Zeke
 
I found the link to Maine Rail Chaser youtube videos on the CMQ Moosehead and Onawa trestle thread down the main page here about 4 slots. There a number of chases of Job 1 and Job 2. That is where looking over the roadbed it appears quite a bit of track rehab has occurred since the purchase. One video has the train really moving which to me seemed quite faster than 25 mph.
  by gpp111
 
This is all good news. The new owners have a vision and a long term commitment. The challenge is to continue to build on profitable traffic, but with a finicky Irving and the expansion of the Port of St John, good fortune will have to shine on the MM&A.
  by MEC407
 
Zeke wrote:I found the link to Maine Rail Chaser youtube videos on the CMQ Moosehead and Onawa trestle thread down the main page here about 4 slots. There a number of chases of Job 1 and Job 2. That is where looking over the roadbed it appears quite a bit of track rehab has occurred since the purchase. One video has the train really moving which to me seemed quite faster than 25 mph.
Thanks for the clarification.

In case anyone hasn't seen it already, here is the video from the thread referenced by Zeke:

https://www.youtube.com/watch?v=h_Ec8J86-KQ" onclick="window.open(this.href);return false;

My personal observation is that all of the scenes in that video look like 25 or less. Some of the camera angles might've made them appear faster, though.
  by KSmitty
 
I was up in early October, and will attest to it being 25 the whole way.

Conversation with others who were out that day clarified that with statements like "this shot wasn't possible when the line was 40" and "you didn't used to be able to beat them here."
  by F-line to Dudley via Park
 
For the Northern Maine fed grants, it was Irving who's shooting for Class 3 on the mainline and CMQR who was shooting for Class 2. So unless some oddball stretch in Quebec is 40 MPH for reasons that defy easy explanation, CMQR's whole state-of-repair and upgrade investment plan called for even-keel Class 2/25 MPH physical plant.
  by Zeke
 
After Megantic, the MMA bust and the current rise of the CMQ how does the CMQ compare to the IIRC previous three operator's of the ex CP line ? I realize a number of mills are long gone now and it is slim pickings for the CMQ but in relationship to the others can a comparison overview be drawn. Recently discovering a plethora of MMA videos on youtube I noticed loaded auto racks going east over the Moosehead and one double stack well car with one container on board. Also why did CP bail out and CN stick it out in serving the eastern provinces ?
  by KSmitty
 
Auto and IM business was lost to CN, and hasn't returned. That has been supplanted with wallboard, Lumber and paper products from Irving interchange which was taken from ST. Of course, currently, between NMJ and BJ there is a dramatic increase in traffic over the MM&A years as CM&Q has all ST-Irving traffic, but this is likely shifting back shortly.

I don't know that they've picked up any additional customers in Maine, but Moose River is doing pretty good business, and AIMX in Bangor is doing a good chunk too. Of course I can't comment on what these were shipping under MM&A, but I gather its up. Suggesting better service may be drawing more loads from existing customers.
  by roberttosh
 
Unlike CP's line, CN's line to the Maritimes serves not only Sain John, but Moncton and Halifax as well. In addition, CP had to fight CN for business at its' Saint John terminus, whereas CN had a virtual monopoly on rail customers at Moncton and Halifax. Lastly, CN's lines in the Maritimes served a lot more industry vs CP's line across Maine which was pretty much void of business.
  by Zeke
 
Thanks for the background info. I subscribed to Maine Train Chasers Vlog and came up with todays chase of Job 1 heading west over the Moosehead including a meet with Job 2 in Jackman and the departure of Job 1 in the rain from Jackman. It is quite satisfying to see the CMQ in action and fills out the discussions in the forum about this obscure and quite interesting north woods railroad.

Being a complete dummy when it comes to cut and paste the You Tube video, if anyone is interested, is titled... " CMQ 9017 leads job 1 on Moosehead sub 10/22/16." My grandson is my IT officer but he is out with his buddies today.
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