Crain’s Chicago Business reports this morning that CN will by the EJ&E for $300 million and spend another $100 million to make improvements that will allow CN to improve their Chicago area operations.
As speculated on the earlier thread, US Steel will retain ownership of the portion of the J that serves their Indiana works.
Here is CN’s press release.
http://www.cn.ca/about/media/news_releases/2007/3rd_quarter/en_News20070926.shtml
CN came close to buying the EJ&E a year ago, probably at the time they pulled out of CREATE. The CDN dollar was below 90 cents then, while now it is even.
CN’s website lists 117 hours between Memphis and Prince George. It will be interesting to see how much that will fall once CN improves their acquisition, if it goes through.
Ah, yes. Another fine railroad is about to be whipped by a wet noodle.
Alas, poor EJ&E; thou shalt pass the way of the WC.
This will be an interesting one. We all know about the connecting lines around Chicago, but does CN really want all the industrial trackage that goes with this? It generates nice tonnage, but most of it is short haul to interchange.
Which was the better deal…CP buying DME or CN/EJE?
ed
Get your pictures of the SD38s while you can. They’ll be gone in 6 months or less I bet.
I don’t know about that, all but three of them are essentially SD38-3s, but EJ&E still calls them SD38-2s. CN likes -3s so I think they may stay for a bit longer then 6 months, plus they haven’t started retiring the DM&IR 38s in massive numbers either, and those are not rebuilt. They probably will be demoted to local and yard service. If anything is endangered, it is the lesser known fleet of SDMs, SW1200s, and the SD18 EJ&E still owns.
I have to go to East Chicago tomorrow…better take the camera as it is going to be a perfect Sept day. I still dont see CN doing all that local work. Might be a great opportunity for a regional or shortline spin off.
They got control of the outer belt…that is quite a feather in their cap.
As we speculated earlier…their sale of the St. Charles Airline and other properties could pay this off.
Not that they are short of cash or anything.
ed
As I mentioned in the earlier thread on this subject, I will be quite interested in how the CN will integrate their operations with this aquisition. All of the CN’s major Chicago yards are some distance inside the “J” loop. The thing that they have to deal with is that with the four lines coming into Chicago, it is possible that any train coming in on one line may have cars or blocks of cars heading to destinations on all the other three lines. Of course it is possible that there is sufficient volume between some of the lines to have trains that effectively can run right through Chicago. The ex-WC and ex-IC south might have that kind of volume, however I highly doubt that the CN can avoid running extensive reclassification operations in the Chicago area.
Stay tuned.
I think CN’s purchase was a great one. For $300 million they got the premier route around Chicago, which is 90 miles of mainline railroad. Not only that, they got Kirk Yard, which Hunter Harrison is already saying is a “critical part” of the deal.
According to today’s The Times of Northwest Indiana, Kirk Yard and Memphis will “handle the majority of freight traffic for CN in the United States, serving as the railroad’s primary US hubs.”
From what I am reading, this purchase will free up Markham as an intermodal yard.
Anyone know what size/capacity Kirk Yard is? Ditto Joliet Yard?
How all of this will affect Glenn Yard and Hawthorne remains to be seen.
ed
I find all of this rather interesting. Since CN has purchased the EJ&E, does this now give them a route around Chicago? Or is the congestion still going to be a problem? Will the “J” be used to take a train coming in on the old ICG Freeport Sub around the city and through to say, Michigan?
In other words, instead of taking a train with no originating, or terminating freight in Chicago through the city, will CN now be able to go around Chicago and not have to worry about congestion?? Or did I just answer my own question?
Yes, I believe you did answer your own question…I think they purchased the “J” in order to take freight originating in Canada down the old WC, around Chicago on the former “J” and then down to the Gulf Coast via their IC trackage.
I wonder how long before they [CN] changes the name of the ex-IC’s Johnson Yard in Memphs?
I know they have increased the size of their intermodal op there, and had proposed an enjarged intermodal facility down in the adjacent Ensley Bottoms area.
Hi Sam,
Did IC have this facility on the south side of the City, or is it completely new ?
http://www.cn.ca/productsservices/intermodal/overseas/gateway_memphis/terminal/en_intermodal.shtml
If MWH had stayed on as Editor for a few more months, we would have had a Memphis Trackside Guide.
I doubt that Kirk Yard would fit well with CN’s operational plans. It would be located at the end of a line running north from Griffith (GTW connection) and the lines running out of Kirk to the west are glorified industrial leads that don’t really connect with anything. I would assume that Transtar will keep Kirk Yard, the Lakefront Line and the other assorted running tracks running into the Calumet region.
I have to wonder what impact this purchase will have (if any) on the trains that run from West Chicago to Joliet, etc. from the U.P. over the EJ&E and the daily trains that run from the BNSF Eola yard here in Aurora down the EJ&E to the BNSF Logistics Park near Joliet?
CN can’t do anything about BNSF or UP Trackage Rights. They require STB approval to start or end them. They can’t force them off. Isn’t Markham Yard already 80 percent Intermodal or better, with just a few tracks for local business? I thought Glenn Yard was the primary carload yard for Chicago.
From the Globe and Mail-
The maddeningly busy stretch of tracks through Chicago, the railway capital of North America, gives Hunter Harrison a recurring traffic nightmare.
But the Canadian National Railway Co. chief executive officer believes he has found a way to bypass the gridlock, snapping up a detour on the outskirts of the Windy City. Mr. Harrison said yesterday that CN is buying a strategic Illinois line for $300-million (U.S.) to expand its presence in the Chicago region, adding the missing link to its North American train tracks. “It fills in the last gap that we had in this network,” he said during a conference call with analysts. “This will change significantly our whole U.S. network.”
Montreal-based CN plans to spend another $100-million on rail system upgrades to alleviate the Chicago bottlenecks caused by major competing carriers jockeying for limited track space.
The seller of the detour isn’t another railway, but Pittsburgh-based United States Steel Corp., owner of 318 kilometres of track. Mr. Harrison reckons that CN can turn the suburban route into its own fast lane out of Illinois, then south to CN’s Memphis distribution hub. The Elgin, Joliet and Eastern Railway Co. (EJ&E), owned by U.S. Steel’s Transtar subsidiary, runs along the western outskirts of Chicago and also extends into U.S. Steel’s Gary steel plant in Indiana. The deal, expected to close in mid-2008, doesn’t include a short line east of Gary.
CN’s acquisition is expected to have far-reaching implications, strengthening its ties to the U.S. Midwest steel industry and also speeding up freight delivery times for goods starting on CN lines on Canada’s West Coast and East Coast.
Scott Flower, an analyst at Banc of Americ
I don’t know when the intermodal facility at Markham was built, maybe the eighty’s. Before then Markham had both Northbound and Southbound humpyards, each with receiving, classification and ready outbound tracks. The Northbound had more classification tracks as this is where cars off of trains from the south (later off the Iowa Line) were sorted for interchange to all the other Chicago railroads. The Southbound yard received interchange and Chicago industry cars and made up the southbound mainline trains.
The Mapquest aerials show that the north end is the part that was converted into the intermodal facility. I think that in the changeover, both humps were removed, but a considerable portion of the south part of the yard remains. The aerial shows many cars on those tracks and I assume one yard is for flat switching to classify cars into outbound blocks and the other to make up the outbound trains.
The ex-GT runs roughly east-west at the north end of Markham under the elevated IC/Metra Electric with interchange tracks on the east side that provide direct movement from/to Markham to either direction on the GT.
Does anyone have a handle on the capacity of the “J”. I know it is predominantly single track. Even with the addition of more sidings and, if not now in place, CTC on the entire route, the capacity limit would probably be on the order of 25 trains each way per day. I doubt that the “through train” traffic is at that level so there probably is the capacity to handle all the solid trains with no Chicago freight on the “J” route. At the same time, I find it highly unlikely that all the traffic between the 4 CN lines and the other Chicago interchange traffic can be handled over the “J” route. Moving the “loose car” business is still going to be the tricky part of the business.
I am not sure of the capacity the “J”, but the old WC route through Wisconsin and down to Chicago is also single track and so I would think the “J” is sufficient to handle that traffic, and perhaps more with its upgraded signalling recently installed and the improvements CN is going to do on the line.
I’d been watching this thread with a kind of passing interest and of little concern, till today and seen the part bout a quicker route to Memphis, so I got my maps out n look. The quickest route, looked to be the IC/CN through Kankakee, Champaign, Effingham, Centralia, and Cairo, to Memphis. That route may get interesting, it is also shared with Amtrak [City of New Orleans and Chicago-Carbondale runs] and I know there’s a lot of it is single tracked through there now in central ILL.
It will also give the CN quicker access to the S.E. via a trackage rights or interchange, if needed, with CSX, NS or UP, outside of Chicago.
When you look farther out from the Chicago at the bigger picture, it appears to me, to be a very good buy for CN, other than the Amtrak concerns. That may cause some problems that may come with increased traffic