The 2007 Michigan Central

[NSSD70ACe]

Hey all,

I was wandering around the Trains Magazine site and discovered an article from '07 about Watco and NS wanting to (and eventually did) create a new Michigan Central to run between Ypsilanti and Kalamazoo, Jackson and Lansing, the current GDLK route (GR and Elkhart), and acquire the trackage rights over Amtrak to Indiana. Now, I do know that the STB shot this down and the JAIL runs between Jackson and Lansing. My question is, with NS supposedly wanting to pull out of Michigan, does Grand Elk still have a shot of expanding to the east? Or would a different railroad altogether be utilized or started for that run?

Thanks,

-NS

July 12, 2007
KALAMAZOO, Mich. - Norfolk Southern and shortline conglomerate Watco have created a new company to acquire and serve 384 miles of ex-NS track across Michigan and Indiana. The new company, Michigan Central LLC, will initiate service in early 2008. NS will contribute its line; Watco will be the majority owner of the new company.

"The new Michigan Central will preserve and enhance freight-rail service in southern Michigan," David C. Eyermann, Michigan Central's interim president, said in a statement. The company will be based in Kalamazoo and will employ approximately 118 people. The new Michigan Central will operate between Ypsilanti and Kalamazoo; between Jackson and Lansing; and between Grand Rapids and Elkhart, Ind. The Michigan Central also will acquire Norfolk Southern's trackage rights on the Amtrak-owned line between Kalamazoo and the Michigan/Indiana state line. The transaction is subject to regulatory approval by the Surface Transportation Board. NS and Watco will make the required filings with the STB later this month. A major part of the transaction will be the investment of more than $6 million in infrastructure in the first year, and more than $20 million in the first three years of Michigan Central operation.

The Michigan Central is a storied name in railroading. The original Michigan Central Railroad operated in the states of Illinois, Indiana, and Michigan, as well as the province of Ontario. It was a predecessor of the New York Central, and wasn't formally merged into the NYC until the 1950s. Michigan Central operated several passenger trains between Chicago and Detroit, with some trains forwarded over the Canada Southern to Buffalo, N.Y., and New York City. While Michigan Central was an independent subsidiary of the New York Central System, some passenger trains were staged from Illinois Central's Central Station in Chicago.

[chapmaja]

At this point I don't think the STB's argument against the Michigan Central would hold water, since the main argument was the preservation of the passenger line to high standards. I don't think there would be an issue from the STB if the Grand Elk were to get service over the Michigan line. What might be interesting through is would this impact the AA at all and the never used interchange in Ann Arbor. Since the AA is also a Watco line, would the interchange track be reestablished in AA between the companies? I personal thought is that they would reestablish the physical connection, but it would be seldom if ever used because it wouldn't be needed. The only possibility would be if eastbound traffic would head down the AA to be added to NS trains going east from Toledo, rather than going to Elkhart to be sorted to go east.

[M.D.Bentley]

There is another player in the game. They would take over all the former BIG Conrail trackage in the state. It would be sort of a home coming.

[ConrailMan5]

At this point I don't think the STB's argument against the Michigan Central would hold water, since the main argument was the preservation of the passenger line to high standards. I don't think there would be an issue from the STB if the Grand Elk were to get service over the Michigan line. What might be interesting through is would this impact the AA at all and the never used interchange in Ann Arbor. Since the AA is also a Watco line, would the interchange track be reestablished in AA between the companies? I personal thought is that they would reestablish the physical connection, but it would be seldom if ever used because it wouldn't be needed. The only possibility would be if eastbound traffic would head down the AA to be added to NS trains going east from Toledo, rather than going to Elkhart to be sorted to go east.

Not much online between Ypsi-Porter (the established running segment per the article) goes via toledo as I understand. I do believe wayne generates some cars that go via toledo, but that is pretty much it. Most of the jacksons go to elkhart to be classified (hence the recent switch to Jackson-KZOO-Elkhart for the jackson cars instead of JXN-WAYNE-TOL-ELKHART). So even if this had come to fruition, I doubt the connection at AA would be re-established.

[ConrailMan5]

There is another player in the game. They would take over all the former BIG Conrail trackage in the state. It would be sort of a home coming.

If you are talking about the rumor I believe you are I have had a similar conversation with someone else about it. Not convinced that that would happen.

[NSSD70ACe]

There is another player in the game. They would take over all the former BIG Conrail trackage in the state. It would be sort of a home coming.

If you are talking about the rumor I believe you are I have had a similar conversation with someone else about it. Not convinced that that would happen.

Rumor? This is the first I'm hearing of this

If this "new MC" had come about, this is how I see it going about (keep in mind...I'm a novice when it comes to this sort of thing):

You'd have your major yards in Kalamazoo, Jackson and Grand Rapids. The yard in Battle Creek is seldom used anyway (from my current knowledge) and would probably be used for overnight storage and maybe have a local or something based out of there to serve local industries to save time for the road trains.

According to the article, the new Michigan Central's HQ would've been in Kalamazoo. This leads me to believe that most of the facilities would be the same, with the shops in GR. I'm not aware of any facilities in BC and I know the ex-MC (the original, that is) shop in JXN is now a trucking warehouse.

As for actual trains, I'm thinking all of the Elk's current trains would still be utilized with 302/303 running to Elkhart and GR respectively and the locals out of Kalamazoo, with the exception of the transfer in GR. I would bet that a road train (or maybe a B33-type "glorified local") would run east/west to interchange with the other yards as well as the AA. NS would utilize their trackage rights from Dearborn to interchange in Jackson for Detroit-area and Canada-bound cars, with anything else for the NS system not already headed south on 302 being sent to the AA for Toledo. There would be locals out of BC and Ypsilanti to work industries along the line.


Ypsilanti is a blank slate for me. From Google Maps, I see one yard to the east of the city that is about the same size as Gearhart. From the air, it looks full, but from the street view it appears to be totally abandoned. Is it still in use or it it basically just car storage now?


Like I said before...I'm extremely new to that sort of hypothetical operation. I warmly welcome any sort of critiques you guys have on that whole scenario because I'll be surprised if I got any of that right.


Thanks,

-NS

EDIT: I did a bit more in-depth research into Ypsi Yard and I found that it is currently (from the air photo, anyway) a 14-track yard and with a little switch rearranging you could add another 5, possibly 6 tracks, making the land area slightly bigger, if not the same, as Gearhart, but with less tracks.

[ConrailMan5]

Rumor? This is the first I'm hearing of this

If this "new MC" had come about, this is how I see it going about (keep in mind...I'm a novice when it comes to this sort of thing):

You'd have your major yards in Kalamazoo, Jackson and Grand Rapids. The yard in Battle Creek is seldom used anyway (from my current knowledge) and would probably be used for overnight storage and maybe have a local or something based out of there to serve local industries to save time for the road trains.

According to the article, the new Michigan Central's HQ would've been in Kalamazoo. This leads me to believe that most of the facilities would be the same, with the shops in GR. I'm not aware of any facilities in BC and I know the ex-MC (the original, that is) shop in JXN is now a trucking warehouse.

As for actual trains, I'm thinking all of the Elk's current trains would still be utilized with 302/303 running to Elkhart and GR respectively and the locals out of Kalamazoo, with the exception of the transfer in GR. I would bet that a road train (or maybe a B33-type "glorified local") would run east/west to interchange with the other yards as well as the AA. NS would utilize their trackage rights from Dearborn to interchange in Jackson for Detroit-area and Canada-bound cars, with anything else for the NS system not already headed south on 302 being sent to the AA for Toledo. There would be locals out of BC and Ypsilanti to work industries along the line.


Ypsilanti is a blank slate for me. From Google Maps, I see one yard to the east of the city that is about the same size as Gearhart. From the air, it looks full, but from the street view it appears to be totally abandoned. Is it still in use or it it basically just car storage now?


Like I said before...I'm extremely new to that sort of hypothetical operation. I warmly welcome any sort of critiques you guys have on that whole scenario because I'll be surprised if I got any of that right.


Thanks,

-NS

EDIT: I did a bit more in-depth research into Ypsi Yard and I found that it is currently (from the air photo, anyway) a 14-track yard and with a little switch rearranging you could add another 5, possibly 6 tracks, making the land area slightly bigger, if not the same, as Gearhart, but with less tracks.

You havent heard it becasue it is a rumor and a bad one at that. Assuming MD and I are talking about the same thing.

Ypsi yard is 1 track currently... the roadway department has decided to take out one of the tracks for whatever reason. Now willow run yard just east of Ypsi is a 14 track yard that is used primarily for storage. It used to be a roadrailer terminal last used in 2008. But that is beyond CP YPSI and would be out of paly for this scenerario.

There is currently no detroit or canada interchange coming east from Jackson.

As far as ops are concerned. AA would be out of play. I cannot think of any reason for them to be in play. I feel that most of the ops would stay the same except B33 would be tuened into a road train all the way JXN-elkhart, and have some kind of counterpart coming ELK-JXN. Not sure how the Elk handles those cars now, but that should save at least one crew start per day.

[atrainguy60]

There is another player in the game. They would take over all the former BIG Conrail trackage in the state. It would be sort of a home coming.

If you are talking about the rumor I believe you are I have had a similar conversation with someone else about it. Not convinced that that would happen.

What's the rumor, that NS is interested in the ex MC lines?

[PatAzo]

My question is, with NS supposedly wanting to pull out of Michigan, does Grand Elk still have a shot of expanding to the east? Or would a different railroad altogether be utilized or started for that run?

Watco remains interested in expanding to the east. One scheme they discuss is GDLK working east to Jackson and handing cars off the the Ann Arbor. The Ann Arbor would work east of Jackson handing westbound cars off to Grand Elk. This would bring their crews home each night.

[Ypsi]

I'm not buying any of it currently. NS still runs 38E/39E to Wayne (should be Elkhart-Wayne still), so any cars that do go east have a chance to do so from Elkhart. However I think most of the cars that go to Jackson come from or end up going west. IIRC most of the grain goes to the Union Pacific. As much as I would like that senerio I don't see it happening, however if they want Wally on the AA and MI Train on the MC, they would need a way to link the two lines for servicing and swapping equipment without going so far out of the way which could add some validity to running freight that way.. (And PLEASE don't think or turn this into another Mi Train discussion, that's comment is purely about a connection at AA between the AA and Michigan line).

That all being said, what's old is new again. We have double track back in place at Dearborn, new connections that used to exist in Detroit.. Nothing is out of the realm of possibility.

[Saturnalia]

I'd see a combined AA/GDLK/MC advantageous as a single system. NS Interchange in Elkhart, CN in Toledo & Battle Creek and CSX in Toledo. While current traffic obviously flows without crossing the "line" in Kalamazoo and Ann Arbor, the ability to go multiple routes from anywhere on the system could win some cheaper prices, I would estimate.

[ConrailMan5]

I'd see a combined AA/GDLK/MC advantageous as a single system. NS Interchange in Elkhart, CN in Toledo & Battle Creek and CSX in Toledo. While current traffic obviously flows without crossing the "line" in Kalamazoo and Ann Arbor, the ability to go multiple routes from anywhere on the system could win some cheaper prices, I would estimate.

So then the shippers win, but why would the railroads do that? That would cut their revenue by creating more competition therefore decreasing their rates and likley add more crew starts ( ergo more costs).

And again, I see no point in having the AA interchange in ann arbor. If the cars from jackson needed to go to toledo, then they would still run 38/39E to jackson, or run a daily/ as needed transfer to wayne. but they obviously do not. From what i hear, the way it is set up now is how they have wanted it to be for ages. The old system was paying the 38/39E crews 2 days pay for sometimes 6-8 hours of work between jackson and Wayne.

The AA is pretty much the Jeep docks and Bridge traffic from the GLC. no reason for them to waste money re-installing the interchange there.

[Saturnalia]

I'd see a combined AA/GDLK/MC advantageous as a single system. NS Interchange in Elkhart, CN in Toledo & Battle Creek and CSX in Toledo. While current traffic obviously flows without crossing the "line" in Kalamazoo and Ann Arbor, the ability to go multiple routes from anywhere on the system could win some cheaper prices, I would estimate.

So then the shippers win, but why would the railroads do that? That would cut their revenue by creating more competition therefore decreasing their rates and likley add more crew starts ( ergo more costs).

Not for the shortline! Shortlines don't care to whom the traffic flows. The connecting Class Is will be the competing parties.

I think that one also has to consider that if a shortline operator took over the AML, we can expect an increase of the online traffic base, which NS doesn't care too much about right now. The ability to access somebody other than just the NS directly (as is the present case) could be a competitive advantage for this combined MC/GDLK/AA. Then, customers could play CN, NS and CSX off each other for better rates. Generally, the shortline's rates won't change much for their portion of the haul over this. They make most of their money on the switching/delivery, not the hauling that the Class Is do.

Based on a general rehabilitation of the AA connector, and the placement of enough space for transfer cuts, the AA side and MC side could easily setout and pickup cars from the connector. Cars from Toledo for the MC would be blocked for the connector and same for the MC side. Wouldn't take long.

Perhaps the biggest issue would be all the outstanding agreements already in force. Sometimes old agreements are hard to get rid of and streamline. And let's not forget the unions - there are at LEAST 3 sets of union agreements right now - AA, NS and GDLK - and probably more agreements spanning the decades.

All hypothetical, of course - and tons of issues blockading it. But I do see a case where a combined GDLK/AA/MC would make at least operational sense. (in my non-expert evaluation).

[CSX_CO]

NS can give it to Shared Assets, then they can paint some engines pretty blue and all the young foamers and foamettes too young to remember Conrail can quit obsessing over it.

[Ypsi]

NS can give it to Shared Assets, then they can paint some engines pretty blue and all the young foamers and foamettes too young to remember Conrail can quit obsessing over it.

what a great addition to the discussion about how 3 rail lines could be linked to form a better system.

[Saturnalia]

NS can give it to Shared Assets, then they can paint some engines pretty blue and all the young foamers and foamettes too young to remember Conrail can quit obsessing over it.

what a great addition to the discussion about how 3 rail lines could be linked to form a better system.

It's great comedy! Though crowd

[CSX_CO]

NS can give it to Shared Assets, then they can paint some engines pretty blue and all the young foamers and foamettes too young to remember Conrail can quit obsessing over it.

what a great addition to the discussion about how 3 rail lines could be linked to form a better system.

What? NS retains some form of control and revenues from it.

Just because something is "for sale" doesn't mean the people you are speculating to buy it, even want to buy it. Big deal if NS offers it to AA. If AA doesn't think the addition will fit their long range plans, they aren't going to bite. I know of 3 different lines around here that were shopped to a regional railroad and the regional declined to purchase. Not because traffic base wasn't there (at least on one line) but because it didn't offer any strategic advantage to their operations.

[ConrailMan5]

NS can give it to Shared Assets, then they can paint some engines pretty blue and all the young foamers and foamettes too young to remember Conrail can quit obsessing over it.

what a great addition to the discussion about how 3 rail lines could be linked to form a better system.

What? NS retains some form of control and revenues from it.

Just because something is "for sale" doesn't mean the people you are siecunating to buy it, even want to buy it. Big deal if NS offers it to AA. If AA doesn't think the addition will fit their long range plans, they aren't going to bite.

The quip about foamers too young to remember conrail was unecessicary.

However i can go somewhere with your point now. Why would NS do that? Why split the profits when they can just have all the profits, and not give any to their eastern rival?

I get the part about drumming up new business Alex, but looking at it purely from how the situation is now there would be no reason to combine AA and MC/GDLK operations. If they were to drum up business that needed that routing, and would be around long enough to offset the costs of re-installing that interchange in Ann Arbor, then it might make sense to merge opperations. However that is not how the situation is right now.

[CSX_CO]

Because they split profits, but shoulder 0 of the expense. Why you think CSX invests in the INRD, EVWR, et al? Split the profits without incurring the expenses. Think of it as dividend payments on a share of stock.

I think it's time we review why business, any business, is in business. To make money for the owners. Railroads aren't In business to move freight, they're in business to make money. They just do that by providing good enough service that customers don't switch to trucks, and do it without going into the red.

So, objectively look at an AA take over. What do they gain? They have access to Toledo. They don't gain access to Elkhart. They get miles of track, and while state shoulders the upkeep, they're more than likely going to pay a fee to the state like NS does. So, is the additional expense worth the additional revenues?

[ConrailMan5]

Because they split profits, but shoulder 0 of the expense. Why you think CSX invests in the INRD, EVWR, et al? Split the profits without incurring the expenses. Think of it as dividend payments on a share of stock.

I think it's time we review why business, any business, is in business. To make money for the owners. Railroads aren't In business to move freight, they're in business to make money. They just do that by providing good enough service that customers don't switch to trucks, and do it without going into the red.

So, objectively look at an AA take over. What do they gain? They have access to Toledo. They don't gain access to Elkhart. They get miles of track, and while state shoulders the upkeep, they're more than likely going to pay a fee to the state like NS does. So, is the additional expense worth the additional revenues?

Umm we are agreeing here... somehow I guess that isnt clear.

I dont think joint opps are a good idea. Saturn does. I dont. I see no benefit to the bottom line from combining opperations if that had been the case. As far as watco/ opperation of the MI line is concernerd, I think that would be very beneficial becaus they could drum up business that NS doesnt care to do the work to do.

AS far as conrail is concerned, if NS and CSX both own conrail, that does m not mean that they incure 0 costs from conrail. I am not sure if CRSA is entirely self-sufficient. CRSA was designed to be an objective switching road set up in areas where dividing up big conrail was not feasable. Going from a termianal company to a line haul road is going to require investment in conrail. I dont know if CRSA would be able to do that without funds being injected from the parents NS and CSX. Whereas in the current setup, NS has already invested in the MI line, and simply needs to continue to opperate it as it does for whatever opperating ration the MI line has.

Additionally, beciming a line haul road goes against what CRSA was set up to do. It would be like a school bus service suddenly deciding that they wanted to get into the long haul passenger market. It can be done, but probably shouldnt be done.