WATCO Makes Investment in GLC

[AARR]

While we're in speculation land, how about throwing in the Michigan line rumors? If NS wants out, is Watco looking to connect the GDLK/AA/GLC dots? Wouldn't this give Watco some pretty good flexibility for interchanges that maximize their haul mileage? I have no idea really if there is even traffic that would make sense for this, but maybe Watco sees profit in GR-Toledo or even something like Elkhart-TC? (caveat: all things are possible in speculation land!)

I've asked several MI short line executives this very question and they say, no, there is not enough traffic that would justify the cost of connecting the G&W, Watco, or independent lines in MI into one business unit. It makes more economic sense to let each line interchange with its nearest Class 1 connection.

Nevertheless it would not surprise me if it happens some day albeit in bits and pieces like Watco's investment into GLC.

[TrainWatcher]

While we're in speculation land, how about throwing in the Michigan line rumors? If NS wants out, is Watco looking to connect the GDLK/AA/GLC dots? Wouldn't this give Watco some pretty good flexibility for interchanges that maximize their haul mileage? I have no idea really if there is even traffic that would make sense for this, but maybe Watco sees profit in GR-Toledo or even something like Elkhart-TC? (caveat: all things are possible in speculation land!)

I don't think it be worth it to Watco to connect the dots along the Michigan line. There is NO active interchange point between the AA/GLC mainline and the Michigan Line. The one that did exist is very overgrown and paved over,much less steep as hell. If Watco ever took over Michigan line ops,my guess the GLK/Michigan line would act as one and then you'd see either the current AA/GLC setup or a brand new ( once again ) Ann Arbor Railroad.

I am in agreement with Stryker once again. Makes no sense really, and the only other wrench to throw in is the A&B/JAIL line, and how could/would that play into the Watco plan overall. I see that Watco could be in the future trying to re-connect the Annie as a bit of competition between G&W and the LSRC, if not growth for interchange traffic via Toledo to points north in a faster timeframe. CSX has 1 thru freight each way to Flint for the time being, and the LSRC/SBS handles all the traffic north of there. If you could cut down the amount of time a shipper or receiver could get a boxcar of goods who would they ship with?

[JStryker722]

[quote="TrainWatcher"][quote="JStryker722"][quote="bctrainfan"]While we're in speculation land, how about throwing in the Michigan line rumors? If NS wants out, is Watco looking to connect the GDLK/AA/GLC dots? Wouldn't this give Watco some pretty good flexibility for interchanges that maximize their haul mileage? I have no idea really if there is even traffic that would make sense for this, but maybe Watco sees profit in GR-Toledo or even something like Elkhart-TC? (caveat: all things are possible in speculation land!) [/quote]

I don't think it be worth it to Watco to connect the dots along the Michigan line. There is NO active interchange point between the AA/GLC mainline and the Michigan Line. The one that did exist is very overgrown and paved over,much less steep as hell. If Watco ever took over Michigan line ops,my guess the GLK/Michigan line would act as one and then you'd see either the current AA/GLC setup or a brand new ( once again ) Ann Arbor Railroad.[/quote]

I am in agreement with Stryker once again. Makes no sense really, and the only other wrench to throw in is the A&B/JAIL line, and how could/would that play into the Watco plan overall. I see that Watco could be in the future trying to re-connect the Annie as a bit of competition between G&W and the LSRC, if not growth for interchange traffic via Toledo to points north in a faster timeframe. CSX has 1 thru freight each way to Flint for the time being, and the LSRC/SBS handles all the traffic north of there. If you could cut down the amount of time a shipper or receiver could get a boxcar of goods who would they ship with?[/quote]

Thank you TrainWatcher.To answer the JAIl question,it would only serve outside of local traffic to connect into the Lansing gateway for CN traffic or as another CSX interchange option.unless you got enough traffic to go to Lansing in a full trainload,not worth buying that out or routing traffic from GDLK/Michigan Line up to an Lansing interchange. Best to leave the JAIL setup alone.

You could in theory route eastbound NS/CSX/CN traffic straight to Detroit on the Michigan Line and just westbound traffic to Elkhart or Grand Rapids.BUT since most NS traffic would end up classified in Elkhart anyway,your best bet in a Watco operation involving the GDLK and Michigan Line as one would be that all traffic from Jackson east go to Detroit and Toledo and most traffic Jackson west go to Elkhart (NS) or Grand Rapids ( CSX).

As far as your last question: rule of thumb is that the a company will go by rail if the shipping route to their shipper/reciever involves less than 3-4 interchanges from beginning to end. So the fewer interchange railroads involved,the better. It's cheaper for all involved. Since all AA/GLC and CSX eastern Michigan/ LSRC traffic go down to Toledo,you have a greater chance of winning Northern Michigan traffic onto the AA/GLC cuz it had the most direct route into Toledo because if you can time the interchange at Osmer perfectly,you have a chance for cheaper,1-2 day shipment up from Toledo over CSX/LSRC which is slower and probably cost more.Plus while CSX has good 40mph+ track,LSRC is only a 10-25mph railroad and could taker longer than a trip up the 25-40mph AA followed by 30-40mph GLC the rest of the way.And GLC as the benefit of having their cars pre blocked by the AA yard in Toledo before the Osmer interchange,especially since you aren't talking about several lines that LSRC operates that would have cars to be straightened out from 1 Toledo-Flint train,just 1-2 lines to straighten cars for at Osmer for GLC traffic. That all makes switching faster and more cost effective.

[CSX_CO]

This thread is funny. People re-writing the entire RR map of Michigan because Watco added some shares of stock (probably ones without voting rights if I read the thread correctly) to its investment portfolio.

Practice Safe CSX

[Saturnalia]

This thread is funny. People re-writing the entire RR map of Michigan because Watco added some shares of stock (probably ones without voting rights if I read the thread correctly) to its investment portfolio.

Yeah, sure speculation and paper railroading (MQT3001 is guilty as charged) is fun, but the discussion has ignored a very big thing: just because the same company OWNs the railroads, it does not mean operating agreements are voided.

Let's say WATCO buys the GLC, and buys out freight on the MI Line from Wayne(or wherever) to K-zoo. Fine, but existing operations and traffic flow agreements, unless re-negotiated, still stand. Traffic currently routed down the Moose to Elhart does not now magically go east to Wayne or Toldeo. To make a "one-railroad" system of the thing would be a complex, likely multi-year legal effort, likely consisting of multiple FRA filings and contract negotiaions with neighboring railroads and customers. It is NOT a "Let there be light, and there was light" sort of deal.

In short, even if Watco buys it all, they don't magically become one system.

There are exceptions to all the above I'm sure, but in general, this is the way it works as I understand it.

*BTW, a clarification may be needed for my earlier post about Watco and combining the GLC and AA. I was not trying to say this move makes that happen, I was trying to say this might be a precursor to it. Getting some skin in the game, perhaps.

[CAT345C]

But what about when GW buys CSX and Lake state I have a goal by the time I retire to get on a train in manistee and run it to alpena under one railroad before I retire......36 years 1 week until I reach that point

[JStryker722]

This thread is funny. People re-writing the entire RR map of Michigan because Watco added some shares of stock (probably ones without voting rights if I read the thread correctly) to its investment portfolio.

Yeah, sure speculation and paper railroading (MQT3001 is guilty as charged) is fun, but the discussion has ignored a very big thing: just because the same company OWNs the railroads, it does not mean operating agreements are voided.

Let's say WATCO buys the GLC, and buys out freight on the MI Line from Wayne(or wherever) to K-zoo. Fine, but existing operations and traffic flow agreements, unless re-negotiated, still stand. Traffic currently routed down the Moose to Elhart does not now magically go east to Wayne or Toldeo. To make a "one-railroad" system of the thing would be a complex, likely multi-year legal effort, likely consisting of multiple FRA filings and contract negotiaions with neighboring railroads and customers. It is NOT a "Let there be light, and there was light" sort of deal.

In short, even if Watco buys it all, they don't magically become one system.


There are exceptions to all the above I'm sure, but in general, this is the way it works as I understand it.

*BTW, a clarification may be needed for my earlier post about Watco and combining the GLC and AA. I was not trying to say this move makes that happen, I was trying to say this might be a precursor to it. Getting some skin in the game, perhaps.

It was that post that touched the questions and speculations about the whole thing. I'm guilty of answering questions and analyzing best I could with what knowledge I knew.