This thread is intended as a general discussion of what effects the CPKC merger will have on existing traffic flows and traffic counts. I’ll get the ball rolling with a selfish question regarding whether this means any reductions through Milwaukee (Watertown and C&M subs).
One of the merger maps includes a text box declaring ‘Bypass Chicago - Creates New Capacity’. Can I assume this refers to traffic which currently interchanges in Chicago for which CPKC will now have the full (or at least longer) haul? Anyone have any estimate of how big this effect might be?
In reviewing the CP-KCS merger map, it would appear the ex-Milwaukee Road River Line is in for a substantial increase in traffic. It ought to be especially interesting to see what changes are in store for the section of line south of La Crescent, MN which is unsignalled and with few sidings.
I live close to the line each time I am in Wisconsin visiting. Most of what CP hauls to Chicago is sent to Bensenville for classification and as we discussed in a seperate thread, very little of it transits to Kansas City Someone said at most on the Chicago to KC CP line there are 2-3 through freights to KC that belong to CP. I am guessing most of the traffic in these is from the East Coast or points directly East to Northeast of Chicago. The Twin Cities to KC traffic I believe even in the Milwaukee Road’s time used the River line and was never sent East to Chicago to my knowledge.
So I believe what they are referring too is new KC - CP interchange traffic, not existing.
BTW, Twin Cities to Chicago traffic is set to increase with new Oil Train traffic last I heard based on the haulage contracts that CP signed. If CP was smart it would help pay for upgrade of the Watertown to Madison line and possibly swipe the Unit Grain Train that now transits BNSF to Chicago…maybe? Seems to me that might be a shorter and possibly faster route with a track upgrade.
Alberta crude moving to the gulf. Which this merger will only benefit bulk traffic. CPKC is also planning new Chicago-Dallas IM service. Yet with a horrible route between those two points vs the vastly better BNSF, and UP routes…All I can say is good luck…
The real core of the combined CPKC system will be from St Paul down to Shreveport and being familiar with both the CPRS River and Marquette Sub mainlines, I can tell you that there will be substantial work and upgrades done; particularly on the Marquette Sub mainline where you’ll probably see some new sidings added (Brownsville and between Bellevue and Dubuque) and CTC will be installed which will not only help speed things up but will probably allow crew districts to be extended where you will likely see St Paul down to Dubuque and Dubuque to Muscatine and Muscatine to KCITY.
I think one could also make the argument that putting the double track back in on the River Sub between St Croix and River Junction - especially if the second Chicago - Twin Cities passenger train becomes a reality - is certainly a possibility as well; at least in sections anyway. Some of the newer bridges on the River Sub were done for single track only but there’s several sections where having double track will make a big difference.
And there’s also going to be a big uptick in intermodal traffic as well.
I expect that any gain CPKC gets will be between Kansas City and Minneapolis/St. Paul and it won’t come at the expense of the line through Milwaukee. The losers would have to be the only other competitors between KC and the Twin Cities: UP and BNSF. BNSF through Sioux City and the UP Spine Line seem targeted here. But honestly, how much traffic can be fought over in this lane? Is it even enough to require new trains?
Alberta has a whole lot of oil and they can’t get it to markets. The proposed XL pipeline was blocked. This could take it to Gulf Coast refineries and ports.
I remember reading that two unit trains per day of solidified Alberta crude were to start running CP-KCS to gulf refineries this month. I don’t know the status of that. But CP had a reason for doing this.
There is the potential for a lot of automotive parts to Mexico from Southern Ontario.
Perhaps CP can work out a pair of Meridian Speedway-type deals with NS. Pair a “Wabash Speedway” co-ownership 30% CP-70% NS with a “Twin Cities Speedway” co-ownership 70% CP-30% NS. CP gets a bypass of Chicago to speed up Ontario traffic both ways, and NS gets access to the Twin Cities for intermodal traffic. (I-90 Chicago-Madison and then I-94 Madison-Twin Cities is practically wall-to-wall trucks.) Both of those would help each of them span the mid-America “dead zone” in a way that each can benefit from.
I would expect that the Chicago to Dallas IM train would be mainly just forwarding Canadian traffic from Canadian sources and Canadian ports, obviously a small amount of traffic will originate in Chicago where a company might give all its business to CP where CP serves. As others have noted I would expect bulk traffic to dominate, corn from Northern Iowa and Southern Minnesota, Ethanol, DDG, various specialty grains from Canada like Barley and Rye. Plus of course the big elephant Canadian heavy crude oil. The contract between CP, KCS and ConocoPhillips began July 1st. It covers up to two 120 cars trains per day. Currently I would say it is moving about 5 trains every six days due to teething issues unloading the product. The product called DRUbit involves removing almost all the diluent at Hardesty, AB and loading the now heavy thick crude, hot into insulated and coiled tankcars for rail movement to Port Arthur, TX where steam is used to reheat the product for unloading. Removing the diluent at Hardesty reduces the ignition and explosion hazard, and the diluent is pipelined back to the mines for reuse.
Mexico is importing refined petroleum products. So now, they’ve got a railroad that can moved crude oil to a refinery and then move the refined products well into Mexico.
I heard that NS does not run any through freights between Butler, IN and Detroit on th ex Wabash anymore, only locals and CP trains. NS runs all their Detroit traffic via Toledo. Does anybody know if this is true.
Where did you hear this from???.. Anyhow there’s still mostly automotive traffic with a couple manifest on the Wabash. Plus the last pair of Triple Crowns between Melvindale and Voltz (KCMO).
Thanks for the oil update. If and when CP/KCS can get up to 2 - 120 car trains a day, that will be nearly $1million of revenue per day, perhaps more assuming $4000 per carload. With an assumed operating ratio of 60% for this business, that yields $400,000 of cash flow to the coffers.
With a purchase price of $31B, that oil business will write off that cost in 77500 days or 212 years.
Granted, there will be other revenue enhancements, but hopefully this will give the scope of needed revenue and profits to pay this purchase off.
Granted, it is “OPM” (other peoples money) but it doesnt make sense to me.
Greyhound or someone…please explain how this will work, not with new maps, but with new returns.
I’m not a financial expert by any means, but my take is that the $31B investment doesn’t just bring new profits. The CP investment also buys them significant KCS tangible, fixed assets as well.
CP has access deals to negotiate with both UP and NS. CP can commit to capacity enhancement in the Rosenberg-Houston Terminal-Beaumont corridor in exchange for keeping the Laredo Gateway fluid for UP. CP would be best off getting trackage rights from Shreveport up the Cotton Belt/MP via Thebes to East St Louis. I can see NS giving CP rights from Springfield all the way to Detroit. Possibly rights to Louisville via East St. Louis. Louisville originates significant amounts of autoparts for Mexico.
