Domtar in Port Huron

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AARR
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Domtar in Port Huron

Unread post by AARR »

First I've heard of this. LSRC worked hard to grow the traffic to this plant and now they're going to close :( . Dunn Paper is the smaller of the two mills and handles less traffic.

From the other board.
Posted by Charles W. on 8/24/2020, 11:54 am, in reply to "Re: Heads Up Lapeer/Imlay/P.Huron Friends"
Only the Domtar mill is closing. The Dunn Paper mill at the end of the line, on the St. Clair river is still open.

Charles W.
PatC created a monster, 'cause nobody wants to see Don Simon no more they want AARR I'm chopped liver, well if you want AARR this is what I'll give ya, bad humor mixed with irrelevant info that'll make you roll your eyes quicker than a ~Z~ banhammer...

arty flowers
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Re: Domtar in Port Huron

Unread post by arty flowers »

Well LSRC could get a new customer when domtar vacates the property when they close the doors. And whats the possibility of the Lake States taking over the Marysville Branch should CSX decide to leave town?

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LansingRailFan
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Re: Domtar in Port Huron

Unread post by LansingRailFan »

arty flowers wrote:
Tue Aug 25, 2020 10:15 pm
Well LSRC could get a new customer when domtar vacates the property when they close the doors. And whats the possibility of the Lake States taking over the Marysville Branch should CSX decide to leave town?
CSX makes a lot of dough on Marysville Branch. Plus LSRC will not get trackage rights over CN like CSX has currently.

Why does everyone want CSX to sell that so badly?

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AARR
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Re: Domtar in Port Huron

Unread post by AARR »

It's possible, but unlikely, when Domtar closes another rail customer will take over the building. The mill will probably be razed and the lot repurposed for residential or retail.

It's not that we want to CSX to sell it just seems short lines do a better job at developing new business opportunities and we like to see more trains :D . Look at how LSRC grew Domtar's business. The additional business was wood pulp that traveled by rail to Toronto then trucked to Port Huron. LSRC persuaded Domtar to keep it on rail all the way to Port Huron. Why couldn't CN do that? I don't have the answer but it seems short lines do. I suspect if a short line operates the CSX St. Clair branch they would develop more business. There are several big and some smaller businesses with spurs who ship zero by rail but might if a new operator who is better able to meet their needs takes over.
LansingRailFan wrote:
Wed Aug 26, 2020 6:25 am
arty flowers wrote:
Tue Aug 25, 2020 10:15 pm
Well LSRC could get a new customer when domtar vacates the property when they close the doors. And whats the possibility of the Lake States taking over the Marysville Branch should CSX decide to leave town?
CSX makes a lot of dough on Marysville Branch. Plus LSRC will not get trackage rights over CN like CSX has currently.

Why does everyone want CSX to sell that so badly?
PatC created a monster, 'cause nobody wants to see Don Simon no more they want AARR I'm chopped liver, well if you want AARR this is what I'll give ya, bad humor mixed with irrelevant info that'll make you roll your eyes quicker than a ~Z~ banhammer...

KenB
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Re: Domtar in Port Huron

Unread post by KenB »

Yes LSRC is very good at developing business BUT the traffic would still have to go to CSX so cars off the PH&D would have to be given to the CN to be hauled to CSX at Walbridge than taken where they have to go. The line to Dunn Paper was a CN line so all the traffic goes to the CN.

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DaveO
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Re: Domtar in Port Huron

Unread post by DaveO »

The Surface Transportation Board now seems to be concerned about those captive traffic terms in the leasing contracts.
The LSRC lease of the Plymouth to Flint line from CSX being an example.
So if LSRC was to lease the PH&D, the traffic will not necessarily flow to CSX.

joeyuboats
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Re: Domtar in Port Huron

Unread post by joeyuboats »

I am not familiar with all the rules and regs, but, if CSX wants to drop the old PH&D, and turns it over to LSRC, then why would LSRC have to give it to a certain carrier? They should be free to who works the best, or who prices the best. If CSX wants out, then they lose all protections.

Super Chief
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Re: Domtar in Port Huron

Unread post by Super Chief »

Once a paper mill closes now it usually is the end of the line for it. White Piegon and the 4 other Graphic Packaging mills that the new Kalamazoo mill will replace will close as they call it in the board room Capacity Neutral. Only the newest and more efficient paper machines are kept running at the expense of the older machines. Been happening in the paper industry last 10 years. Just look west to Wisconsin and how many are shuttered there. Boxcars will be less and less.

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Re: Domtar in Port Huron

Unread post by GTWChris »

joeyuboats wrote:
Wed Aug 26, 2020 7:52 pm
I am not familiar with all the rules and regs, but, if CSX wants to drop the old PH&D, and turns it over to LSRC, then why would LSRC have to give it to a certain carrier? They should be free to who works the best, or who prices the best. If CSX wants out, then they lose all protections.
A majority of these class I divestitures to short lanes are long-term lease agreements, whereas the class I retains ownership of the physical assets (mainly, the property) but the short line operates the line. The lessor/lessee can stipulate any clauses they wish in the lease agreement - assuming the STB approves, such as these captive traffic terms. At the end of the day, both parties freely and willing accepted the terms of the agreement.

The same is true in an asset purchase agreement if one were to purchase the line outright. The buyer/seller can add whatever clauses they please to the asset purchase agreement. However, the validity/enforceability of such restrictive clauses in an asset purchase agreement is questionable. But again, both parties freely and willingly accepted the terms of the agreement

GreatLakesRailfan
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Re: Domtar in Port Huron

Unread post by GreatLakesRailfan »

The Dunn mill in Port Huron had been shut down by its owner for a while when Dunn bought it and reopened it. I'm drawing a blank on who owned it when it was shut down, but it was a James River plant at one time. Unfortunately there probably aren't any more startup companies looking for a closed mill to buy, unless the Dunn owners want to increase local capacity. The mills apparently make specialty papers, and with everything shutdown right now, the demand for what they make is down.

Domtar has a couple mills that make similar product as the PH mill that are also closing. There were about 200 people here being let go, but altogether it's about 750 people who are losing their jobs. I take it Domtar has other mills that can take over the capacity they're losing by closing these mills.

Super Chief wrote:
Wed Aug 26, 2020 9:42 pm
Once a paper mill closes now it usually is the end of the line for it. White Piegon and the 4 other Graphic Packaging mills that the new Kalamazoo mill will replace will close as they call it in the board room Capacity Neutral. Only the newest and more efficient paper machines are kept running at the expense of the older machines. Been happening in the paper industry last 10 years. Just look west to Wisconsin and how many are shuttered there. Boxcars will be less and less.

Man o' War
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Re: Domtar in Port Huron

Unread post by Man o' War »

It is my understanding that Dunder-Mifflin is taking a hard look at the Domtar property...

Man o' War

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AARR
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Re: Domtar in Port Huron

Unread post by AARR »

And they will move The Office there
Man o' War wrote:
Thu Aug 27, 2020 7:00 pm
It is my understanding that Dunder-Mifflin is taking a hard look at the Domtar property...

Man o' War
PatC created a monster, 'cause nobody wants to see Don Simon no more they want AARR I'm chopped liver, well if you want AARR this is what I'll give ya, bad humor mixed with irrelevant info that'll make you roll your eyes quicker than a ~Z~ banhammer...

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