Iron Horse Update for January 2014

Westbound Dakota, Minnesota & Eastern freight between Huron and Rapid City, SD seen passing through Wall, SD with CP Rail and Dakota, Minnesota & Eastern SD40-2s in June 2007- a year before the CP Rail takeover. JJ Schrader photo

CANADIAN PACIFIC- CP Rail and shortline operator Genesee & Wyoming have reportedly reached a deal to purchase more than 600 miles of former Canadian Pacific (ex Dakota, Minnesota and Eastern, nee Chicago & Northwestern) trackage in South Dakota, Minnesota, Nebraska and Wyoming.

The price tag for the deal was reportedly $210 million and is Genesee & Wyoming's first transaction since last year's takeover of Rail America. The new name for the line will be the Rapid City, Pierre and Eastern and will run from Tracy, MN west to Colony, WY by way of Rapid City and the South Dakota capitol of Pierre. According to a GWR press release, the transaction includes a branch from Rapid City to Dakota Jct, NE as well as trackage rights over CP from Tracy to Mankato, MN to interchange with the Union Pacific as well as trackage right over BNSF between Yale and Watertown, SD and a separate line between Wolsey and Aberdeen, SD where the Rapid City, Pierre & Eastern could also interchange with the independent regional Dakota, Missouri Valley and Western. This stretch of the line primarily hauls ethanol, wheat, bentonite clay and cement.

Prior to 2008, the line was part of the Dakota, Minnesota & Eastern system. The DM&E was reportedly interested in expansion by building a new line in Wyoming to access coal from the Powder River Basin and ship it to power plants throughout the Midwest. However, the line between Pierre and Rapid City featured unstable roadbed as well as aging track and bridges limiting speed limits to 10 MPH over that portion of the line and creating a significant bottleneck. With the 2008 CP Rail takeover, a number of proposed improvements were approved but quickly forgotten after competition from natural gas and regulatory burdens on coal drove prices down and the CP Rail installed Hunter Harrison as its new CEO after a 2012 hostile takeover by the Pershing Square Capital Management hedge fund. With the focus shifting to rising oil traffic from Alberta and North Dakota, the former DM&E lines became viewed as insignificant backwater and an increasing burden by CP Rail management.

The DM&E itself was started up after the Chicago & Northwestern announced their intent to abandon marginal and unprofitable lines through South Dakota and parts of Minnesota in the early 1980s. Responding to pressure from shippers and then-US Senator Larry Pressler, the C&NW spun off their lines between Winona, MN and Rapid City, SD to the newly formed Dakota, Minnesota & Eastern in 1986 and the railroad began operations with castoff equipment and facilities.

In addition to their Powder River ambitions, the DM&E purchased the 1700 mile I&M Rail Link in 2002. The I&M Rail Link ran between the Twin Cities and Kansas City via the former Milwaukee Road/Soo Line main and also ran to Chicago via Iowa. The newly-formed sister railway- called the Iowa, Chicago & Eastern- gave shippers in South Dakota access to the Twin Cities, Chicago, St Louis and the Great Lakes. Ironically, the Canadian Pacific reacquired most of the lines in 2008 with their acquisition of the DM&E and IC&E that their Soo Line subsidiary spun off in the late 1990s. To hardly anybody's surprise, the former IC&E trackage between the Twin Cities and Kansas City as well as the Sabula, IA to Chicago line weren't on the chopping block.

Pere Marquette Berkshire #1225 seen passing a grain elevator in the village of Carland, MI with an excursion on December 13, 2013. Brian Plant photo

MICHIGAN- After a hiatus of nearly four years, Pere Marquette 2-8-4 #1225 is back in service for the Owosso, MI based Steam Railroading Institute. The big Berkshire re-entered service at the end of November, in time for the SRI's Polar Express excursions over the Great Lakes Central Railroad between Owosso and Ashley, MI in December [although some of them were cancelled due to a state of emergency being declared in Shiawassee County, MI due to a snowstorm- NANESB].

The locomotive last ran at the end of 2009, when it was pulled from service for it's FRA-mandated 15 year boiler inspection. A few months prior, the #1225 was one of the marquee attractions at the 2009 Train Fest, which also included fellow Berkshire Nickel Plate #765 and Southern Pacific's colorful 1941-built Daylight #4449.

Appropriately enough, there is another gathering of vintage iron horses- as well as aircraft and autos- within a few months of the #1225's return to service. The gathering is dubbed Locomotives Wings and Wheels and in addition to the #1225, the gathering is scheduled for June 20-22 and will also feature restored WWII era P-51 Mustangs from the Commemorative Air Force as well as SRI's Flagg Coal Company 0-4-0 switcher and visiting steam locomotives from the Little River Railroad.

CANADIAN NATIONAL- Just days after a fiery train wreck and derailment in Casselton, ND, a Canadian National freight carrying crude oil and liquefied propane derailed in rural New Brunswick near the village of Plaster Rock. According to a CN spokesman, 19 cars and one locomotive derailed on the 122-car four locomotive train.

Unlike the Lac Megantic disaster last July of the BNSF oil train explosion in Casselton, ND earlier this month, the CN train involved in the derailment was a mixed freight, meaning it was carrying other commodities besides petroleum and liquefied natural gas. However, the wreck prompted the evacuation of nearby residents and some of the derailed cars burned for four days after the derailment.

Transportation officials believe that a mechanical failure prompted the train to apply the emergency brakes prior to the derailment. There were no reports of injuries to the crew.

Plaster Rock, NB is about 30 miles away from the Canada/US border in the northwestern corner of New Brunswick and has a population of roughly 1100 according to Canada's 2011 census.

Today's Train of Thought- Clearing the Maine Line, February 26th, 2013

Today's train of thought revisits the New Brunswick Southern railway in somewhat leaner times, before the JD Irving owned railroad found itself shuttling unit trains of crude oil.

The 200km line began service in 1995, shortly after Canadian Pacific abandoned their lines east of Montreal due to decades of declining traffic in the Maritime Provinces [CP Rail had been operating those lines under the name Canadian Atlantic since the late 1980s- NANESB!]. Instead of using an all-Canadian route like rival transcon Canadian National, the CP chose a more direct path, cutting through the woods of Northern Maine between south central Quebec and southern New Brunswick. In addition to providing the shorter route, this allowed CP to interchange directly with US railroads like the Maine Central and Bangor & Aroostook. However, by the mid-1980s those lines were suffering from declining traffic levels, ineffecient operating practices, deferred maintainence and an indifferent ownership. Along with the Boston & Maine and Delaware and Hudson, the Maine Central found itself under the Guilford umbrella while the Bangor & Aroostook would find itself a subsidiary of Iron Road Railway Holdings within weeks of CP's abandonment of their lines east of Montreal.

Between Montreal and Brownville Jct, ME the former CP Rail line became part of Iron Road's Canadian-American Railroad while from Brownville Jct to Saint John, NB, Irving operated the newly-formed New Brunswick Southern. The Iron Road presence in Maine lasted until 2003 when the parent company of the BAR and CDAC filed for bankruptcy and the Montreal, Maine & Atlantic began operations, assuming control over both railroad's trackage.

For several years, the New Brunswick Southern was pretty much dependent on the whims of the forestry industry and hauled wood chips, paper products, lumber and chemicals used for paper-making. Until 2006, the New Brunswick Southern and Montreal, Maine & Atlantic provided dedicated intermodal trains to and from Montreal. More recently, the New Brunswick Southern's parent company was awarded a contract by the state of Maine in 2011 to operate more than 230 miles of former MM&A (nee- Bangor & Arostook) trackage between Madawaska and Millinocket, ME and began operations as the Maine Northern.

While the contract more than doubled the mileage of the Irving-owned railroads, the fact remained that all the lines, as well as interchange partners MM&A and Pan Am (formerly Guilford, nee Maine Central) were still dependent on the volatile fortunes of the lumber and paper industry.

However. that would change with the advent of hydrofracking and increased oil drilling on the northern great plains. With no east-west pipelines to transport the oil from North Dakota's Bakken shale, transporting the crude to east coast refineries in dedicated unit trains was the next best solution.

And this is where the New Brunswick Southern's parent company- JD Irving- comes in. The privately held Maritimes-based conglomerate involved in everything from shipbuilding to forestry- but also owns Canada's largest oil refinery. With US-based refineries at or near capacity, the JD Irving facility in Saint John, NB was receiving an estimated 90,000 barrels of oil a day by rail from North Dakota and Alberta.

The Bakken oil has been taking a somewhat circuitous route in the 2500 miles between the Dakotas and Saint John- starting off on the BNSF before heading east to Chicago where it's handed off to either the Canadian Pacific or CSX. If it goes via CSX, it travels all the way east to the Pan Am interchange at Rotterdam Jct, NY before travelling the entire length of the Pan Am system to Mattawamkeag, ME. If it travels via Canadian Pacific, it utilizes trackage rights over Norfolk Southern between Chicago and Michigan before entering Canada and heading east to Montreal where its handed over to the MM&A. Whether it takes the CP/MM&A or CSX/Pan Am route, the New Brunswick Southern handles that crude for the final 120+ miles.

Here, railpictures.net contributor Issac "Skippy" Greenlaw caught NBSR GP38-3  #2318 leading eastbound Train 908 through Chester, ME in much simpler times. It's apparent from the accumulation of snow on the hood and pilot steps of the lead unit that it's been busting snowbanks ever since its departure from Brownville Jct. The train is getting ready to slow down to pick up some interchange cars from Pan Am at Mattawamkeag before continuing east into Canada on Fenruary 26th, 2011.

According to the photographer, this train ran only three times a week at the time of the photo, but two years later the New Brunswick Southern is leasing at least a dozen additional locomotives from Helm and Pan Am Railways to not only keep up with the oil traffic, but a modest rebound in forestry and paper carloadings on the 220+ mile Maine Northern.

Sticky Situation Update- Stolen Maple Syrup Reportedly Surfaces in Quebec, New Brunswick

Barrels of maple syrup at the Federation of Quebec Maple Syrup Producers warehouse in Laurierville, Quebec. Yves Charlebois- QMI photo

It was the heist that launched a thousand breakfast puns- in late August, thieves siphoned anywhere from C$20 to C$30 million worth of maple syrup from a warehouse in St Louis du Blandford, Quebec. The warehouse- owned by the Federation of Quebec Maple Syrup Producers- is part of Canada's Maple Syrup Strategic Reserve [a phrase one usually associates with commodities like oil, gold or uranium- NANESB!]. They syrup at St Louis du Blandford warehouse and other facilities is stored in barrels, but instead of taking the barrels the thieves had siphoned off the liquid gold, leaving behind empty barrels so that the theft wasn't noticed until immediately.

In October, officers from the Royal Canadian Mounted Police and Sûreté du Québec executed search warrants at two seperate locations following the heist. RCMP officers reportedly found a significant quantity of syrup believed to be from the heist at a processing and export facility in Kedgwick, New Brunswick.

Quebec Provincial Police officers also raided a warehouse south of Quebec City about 10 days later. Less was known about the warehouse in St Nicholas, QC than the export firm in New Brunswick. The warehouse owner, who asked not to be identified, said he leased the building to syrup distributors who owed them money. A worker at a neighboring business said the current tennants had been there for about a year.

In the latest development, a lawyer for S.K. Export Inc- the New Brunswick firm that had approximately 660 barrels confiscated when police served a search warrant- has convinced a Quebec judge to return at least some of the 660 impounded barrels to the firm.

Étienne St.-Pierre, the owner of S.K. Export is also contemplating seeking compensation from the Quebec Provincial Police and the Quebec Federation of Maple Syrup Producers, contending that the Federation has been trying to put him out of business due to his long-standing practise of circumventing the Federation when he purchases surplus syrup from Quebec producers.

Police declined to comment on how they determined the syrup at S.K. Export was from the St Louis du Blandford heist due to the ongoing investigation.

Mid February Iron Horse Roundup- EMD Announces Closure of London Plant; Steel Silk Road in the Works? 'New' Power For Farmrail, New Brunswick Southern

Two EMD SD80ace's are seen on flatcars outside of Canadian Rail Collision and Refubish's Toronto, ON facility. The locomotives- destined for Brazil- have just been repainted and are part of the last order constructed at EMD's London, ON facility before Progress Rail announced they were closing down the facility. Photo- Oscar Majcher

EMD/PROGRESS RAIL- After a month-long lockout and standoff with the Canadian Auto Workers over a new contract, EMD parent company Caterpillar [NYSE: CAT] announced they were shutting down their London, Ontario plant this month.

Electro-Motive Canada announced it was shutting down its plant, wiping out the jobs of 475 locked out workers as well as 200 non-union staff.

Sixty-two years after it started making locomotives in the city and two years after it was purchased by a subsidiary of heavy equipment giant Caterpillar Inc. the plant was history.

It’s the biggest plant closure the city since 1994 when the Northern Telecom plant employing 2,200 shut down.

It will likely cause another spike in the London-St. Thomas unemployment rate which dropped to 9% last month, but is still the second highest of any major city in Canada.

The lockout of the London workers had been a lightning rod for protests with the company asking employees to take as much as a 50% wage cut. A rally on Jan. 21 drew more than 5,000 people.

According to Caterpillar, a key sticking point with the CAW was wages and temporary hiring of outside non-union contract employees to deal with large orders. While the decision to shut down the London plant has understandably sparked outrage throughout Canada [including calls for the seizure of Caterpillar's assets in Canada- NANESB], it's also worth pointing out that whether it was General Motors, Greenbriar Equity or Caterpillar, EMD remained an American company that happened to have a major plant in Canada the whole time the London facility was open.

Prior to Caterpillar's announcement, members of the CAW Local 27 had blockaded flatcars carrying some of the locomotives from the final order from London's plant before leaving of their own accord. The locomotives are destined for Brazilian mining and logistics firm Companhia Vale do Rio Doce [NYSE- VALE] which operates more than 8700 km of track through three subsidiaries in eastern Brazil.

According to Canadian Railway Observations, EMD also received orders for new power from Norfolk Southern, Brazil's VALE and Union Pacific as well as freight and mining railroads in the UK, Australia, Mauritania and the United Arab Emirates. Meanwhile, Canadian Pacific announced that they selected Progress Rail to undertake an extensive rebuild of their aging fleet of four-axle GP9s and six-axle SD40-2s.

Shortly after the announcement regarding the London plant, Progress Rail hosted a job fair for it's Muncie, IN plant and announced a second one set to take place in early March. Coincidentally, Indiana Governor Mitch Daniels had signed a right-to-work bill a few days prior to Caterpillar shutting down the London plant. The bill makes the Hoosier state the first 'rust belt' state with right-to-work laws.

A Russian-built locomotive brings in freight from across the border with Uzbekistan to the frontier town of Hairatan. Photo- Railways of Afghanistan/Asian Development Bank

AFGHANISTAN- Operations began on a new 45 mile rail line in Afghanistan linking the city of Mazar-i-Sharif with the Uzbekistan border at Hairatan earlier this month.

The inaugural load comprised nine wagons of flour from Kazakhstan and three of timber from Siberia. Unloading began shortly after the train arrived at Naibabad, which lies just east of Mazar-i-Sharif airport.

Nominally operational since mid-2011, the line saw its first test trains reach Mazar-i-Sharif in late December, following further work to reinforce the trackbed and improve security. The line is being operated by Uzbekistan’s state railway under a three year concession signed on August 4, but UTY had been waiting for formal safety approval before starting commercial operation.

In addition to supplying NATO forces in Afghanistan and domestic customers, an expanded rail line could also play a role in transporting much of Afghanistan's untapped mineral wealth to markets in Asia and elsewhere for export.

FARMRAIL/GRAINBELT- According to a press release, Farmail subsidiary Grainbelt Corporation has taken delivery of five additional GP38 diesels.

The press release didn't mention where the GP38s came from, but the prior batch of GP38s were purchased by the western Oklahoma railroad secondhand from the Iowa Interstate Railroad. This brings the total number of units in service on the Farmrail/Grainbelt system to 31, including some of the former

Although agricultural traffic on the 300+ mile Farmrail/Grainbelt system has taken a hit due to drought conditions throughout Texas and Oklahoma late last year, this has been offset by increased drilling activity and shipments of crude oil throughout the Anadarko Basin.

Former Grand Trunk Western GP40-2s seen with a Fort Worth & Western genset at Hodge yard in Ft Worth, TX on Dec 31st, 2011. Photo, JT Leal

FORT WORTH & WESTERN- The Fort Worth & Western acquired a pair of former Grand Trunk Western GP40-2s (nee Detroit, Toledo & Ironton) from Rail Management leasing.

The 1972-built roadswitchers join a fleet of about a dozen second-generation roadswitchers and two gensets on the 275-mile Texas carrier. In addition to being repainted in the FW&W's yellow and blue paint scheme, the locomotives will also receive the name of a historical figure or locale along the route as is custom for the Fort Worth & Western.

NEW BRUNSWICK SOUTHERN- JD Irving's New Brunswick Southern has taken delivery of their first-ever 6-axle locomotives. The Canadian National delivered Helm Leasing SD40-3s #6200 and #6318 to the NBSR in January.

Although one of them has already reportedly been repainted in NBSR colors, both locomotives are currently on short-term lease from Helm and being evaluated for service on the mainline between St John, NB and Brownsville, ME.

[Hat tip- Canadian Railway Observations; Railways of Afghanistan]