On the Yahoo Central Indiana board, we are discussing the connection that NS is placing at Claypool, In which will facilitate a direct connection between the NS’s NKP Ft Wayne - Chicago line with the Marion Branch. This will enable trains moving between Ft Wayne and Elkhart to run directly via Claypool/Marion Branch/Elkhart rather than Ft Wayne/Osborn/IHB/East Chicago/Elkhart. This daily NS train (365) will save 1 crew, reduce miles from 225 to 82 and obviously reduce time (and costs).
So, would a connection such as the one a Claypool be justified by the one train’s savings? I do not know the cost to install a connection, plus signals, land purchase, etc, but my guess is it would run $3-$5million. Just a guess on my behalf based on prior conversations on this forum.
Others state this connection will surely mean the rerouting of trains from the Marion Branch to the NKP line to Ft Wayne to New Castle District and south to Cincinnati rather than down the Marion Branch to Muncie, via Alexandria. No doubt this will give NS some options, as the Marion Branch was seeing considerable train growth over the years and was facing capacity issues with limited signals and sidings.
My point is to attempt to look at the investment strategy here by NS. No doubt the connection makes sense. The Fort Wayne - Elkhart train runs daily and is typically 60 plus cars. A few years ago it was typically 100-130 cars and often ran a second section.
Would the savings from the connection:
Reduction of crews from 1 to 2 for the train.
Reduction of mileage from 225 to 85.
Reduction in transit time by 10 - 12 hours
pay for the connection by itself? I can guestimate the crew savings costs (probably $250,000 - $300,000 per year of fully allocated costs),
I am sure everything is considered…crew savings, fuel savings, time savings, wear and tear on former line, etc. but also sales potential. I.E., such a connection could mean better, faster, more effecient service leading to more traffic/revenue because of the investment… A lot more goes into these decisions than meets the eye, and I am sure NS could provide more reasons.
He questions spending on a 3-5 million on a connecting track. Where is he when they buy gazillions worth of new locomotives with a lesser ROR on the investment?..Upper Operating Management candidate![:-,]
As to the costs: What’s the scope of the construction work = your estimate of the length of new track involved - presumably single track, number of turnouts, number of interlockings, and grade crossings or bridges, etc. ?
As to the potential savings: You said that ‘‘the Marion Branch was seeing considerable train growth over the years and was facing capacity issues with limited signals and sidings.’’ What is the magnitude of the ‘avoided costs’ of improvements to address those capacity issues, that will be saved by this new connection ? I don’t expect that you’ll have any kind of figure for that - but if it’s any kind of a big number, even a small fraction of that could well cover a good share of the cost of the new connection.
A few more thoughts/ insights on this - mostly based on mudchicken’s acerbic comment above (how true it is !), which I’m feeling pretty much compelled to add:
Another way to look at this is that the savings in avoided locomotive purchase/ investment alone would come close to paying for the cost of this connection. Since the connection will save 10 to 12 hours per train, for 2 locos on a train that’s 20 to 24 loco-hours per train - and if there’s 1 train a day, that’s almost an entire loco that doesn’t need to be purchased and used for this service - or viewed another way, 1 of the locos that was being used for it can now be assigned to something else. At $2 million per loco, that’s most of the cost of the lower $3 million construction cost estimate. If more locos or more trains are involved, the avoided investment is proportionally large
You, Paul, and hopefully RWM are the ones I hoped would jump on this.
I am not questioning the rational behind implementing this change. For years I was amazed that NS ran the 365 and for quite a while a corresponding train 324 from Elkhart back to Ft Wayne. Train 324 was always much smaller, usually 40-60 cars. It was annulled a year ago during the first wave of rationalizing operations.
What does interest me is the decision making process. I understand somewhat the rational used for determining which capex projects are given the green light. Often ROI models are used and those with the highest return are stamped “approved”.
What I am trying to get a handle on is …why so long and are my guestimates correct for constructing a connection. Plus, what are the costs for operating a train, for use in the equation.
A few more thoughts/ insights on this - mostly based on mudchicken’s acerbic comment above (how true it is !), which I’m feeling pretty much compelled to add:
Another way to look at this is that the savings in avoided locomotive purchase/ investment alone would come close to paying for the cost of this connection. Since the connection will save 10 to 12 hours per train, for 2 locos on a train that’s 20 to 24 loco-hours per train - and if there’s 1 train a day, that’s almost an entire loco that doesn’t need to be purchased and used for this service - or viewed another way, 1 of the locos that was being used for it can now be assigned to something else. At $2 million per loco, that’s most of the cost of the lower $3 million construction cost estimate. If more locos or more trains are involved, the avoided investment is
Based on the round-about routing that NS has been forced to use to get tonnage from Elkhart to the southbound New Castle sub, I’m really surprised they hadn’t installed that connection before this. Granted, this issue only arose following the Conrail breakup; about ten years. From a pure operational flow viewpoint, the proposed connection at Claypool is really a no-brainer.
The routing of Elkhart - NCD traffic is really not that “round about”, trains 143/144 and 174/175 run down the Marion Branch to Alexandria then over to Muncie. If anything, it is probably a few miles shorter and Marion Branch and New Castle District basically run parallel.
The problem seems to be a lack of sidings on the Marion Branch. Looking at the ETT, there are only three sidings between Goshen and Alexandria with these being grouped north of Marion. I am not sure what the signal system is on the Marion Branch, but believe it is less than desired. Plus there is a bridge restriction (height) at Wabash,In.
What is the height of an auto rack? The bridge has a 19’1" restriction from what I have been told. That would restrict the movement of auto racks from the Honda plant in Greensburg, In to Elkhart.
I’d be really curious to know if this project is possibly an adjunct route to the NS’s Heartland Corridor?
I know it is a long shot, but they are sure spending a lot more than 3.5 million to improve the lane from Norfolk to the Windy???
I guess I managed to post this question while everybody else was answering other questions posed in this thread.
So from reading other responses, I am (possibly jumping to a conclusion?) that this project to get south out of Elkhart has another potential to create a link in a currently non-existant,possibly, low-important> route out of NW Ohio?
As if your eyballs weren’t already rolling into the back of your head on the Claypool connection, consider how these fit into the cost payback scenario:
Does NS have to pay to use the IHB on train 365’s current route?
Claypool has one of the larges bio-diesel plants in the world. This connection will give NS more flexibility in routing soybeans in, bio-fuel out.
At one time Triple Crown was running a roadrailer train on the Waterlevel Route, bypassing all things TC, Fort Wayne. If this train is still running, this connection would allow that train to access Piqua Yard and exchange blocks like all other roadrailer trains in NS’s schedule. It would return to the WLR via the former Wabash at Bulter, IN.
There is also another connecting track going in at Bucyrus, OH on the former Pennsy, now CF&E. Rumor has it this connection is to handle trains out of Columbus using the upgraded Heartland Corridor. Combined with the connecting track at Claypool, would give NS multiple options on traffic headed toward Chicago. (I helped build a conncection between the Pennsy and the NKP line in Fort Wayne that would make this routing possible)
PDN,
Just to add to your cost analysis, there are several new grade crossings with signals going in on the connecting track.
The Marion Branch has ABS using Pennsy Position LIght Signals that were supposedly salvaged from a line after the Johnstown flood. They have issues.
Two other things spring to mind. On the Fort Wayne Railfan sight there has been some discussion that this may turn into a directional running arrangement between the Marion Branch and the New Castle District North of Muncie. I dont’ see it as it would be a
This seems like a connecting track which had to be built. There are too many things happening for it not to occur. The auto racks from Honda, the Heartland project, the Elkhart - Southeast trains, and the new bio-diesel plant at Claypool makes this a no brainer.
NS should have quite a nice system in place in Northern Indiana for moving freight to and from Chicago when this is implemented.
Note that NS is spending the money for that even with the terrible economy in that area and over the last year or so. It’s just a small drop in the bucket of NS’ Capital Expenditures - ‘CapEx’ for 2009, which are supposed to be approx. $1.412 Billion, of which 28 % is ‘Growth/ Productivity’ (as opposed to ‘Replacement/ Core’), and of which $170 million - up 36 % from 2008 - is for ‘‘Infrastructure = Network capacity and service improvements’’. Source: NS’ Investor Book 2009, Financial Performance, Capital Expenditures, ‘pdf’ version, Pages 4, 16, and 17 of 20, 1/27/2009 version, by Deborah H. Butler, Executive Vice President Planning and Chief Information Officer, at
A useful answer requires knowledge of a lot of information that is unlikely to be made public. I could speculate about the costs and the benefits but that’s not a good idea. If it was accurate information there would be legal ramifications, and if it was inaccurate information it would just mislead you and others.
In the general case, before an investment decision is made, a detailed calculation will be performed that compares the costs versus the benefits and reduces it to a net present value with the appropriate discount rate. All of these projects then pass upward through a series of committees that look not only at the instant case of the cost-benefit analysis but also at the long-term strategic picture, government relations issues, the regulatory environment, and other demands upon the free cash flow. If the project survives all that it goes to the executive committee, and if it’s really expensive, to the board of directors, for final approval.
I get to put my fingerprints on some of these cost-benefits analyses and every once in awhile something I do actually happens.
A major reason why the investment in such connections are harder to justify and get approved than for locomotives* - which Railway Man has pointed out before - is that the investment in the track is sunk in a fixed location, irrecoverable, can’t be picked-up and moved to be used elsewhere, etc., so if someone’s traffic or revenue estimates are off or the economic situation changes - too bad for that. But the loco is far more mobile, hence versatile and flexible, and so not as vulnerable to being rendered obsolete in place.
Plus, let’s not overlook that for most people - including almost all types of railroad officials, including operating, mechancial, and administrative, bankers, and public relations staff - purchasing, financing, and promoting and admiring the newest, more powerful, ‘state-of-the-art’ locomotives is inherently a lot more attractive, interesting, appealing, and ‘sexy’ than any new track construction or connection, except for a few wackos like me and MC and our ilk . . .
This one is something that John Kneiling recognized and wrote about often - and as sales-oriented professionals, ed/ MP173 and henry6 should, too: Locos have salemen; but new track connections - and other infrastructure improvements do not (at least not yet). Think about how that works, and what it
I certainly understand your reluctance to speculate on such a matter.
We have often discussed on this forum the general cost guidelines for constructing railroad, often in a per mile application. Those numbers are generally rough estimates and vary based on local conditions.
Having not seen the connection, nor the plans, nor being privy to the matter, it just struck me as a task that would have been considered for several years. Obviously there were factors that held it off the “approved” list and factors that moved it to the “approved list”
What I have been attempted to determine is if the movement of one train would be enough to clear the hurdle. I dont think so. Other options were available and the use of that capital was more critical and had a higher ROI.
Something changed in order to move the project forward. Someone commented that it might be in conjunction with the Heartland Corridor project and anticipated traffic increases. Perhaps it is the increase in traffic (and congestion on the Marion Branch). Doubtful if I will ever have the insight as to why it moved forward.
One of the neat things about my job is that I am one of those sales guys that gets to call on businesses. Often, if I know the person well enough a question might be asked about the “ballpark cost of _______.” It might be a piece of equipment, special vehicle, tank car, etc. “That looks like about a $100,000 piece of equipment” (filling in the $$$value based on what I perceive). It is a question often asked of me prior to examining a project, to give a ballpark figure. An ambigous answer with a wide range is often the best answer
Looking at the Claypool project, there is property purchase, planning, permits, engineering, signals, probably siding(s) on both lines, road crossings,
