Ex. Grand Truck Trackage Question

[MQT1223]

So the other day I was talking to one of the members on here about the Grand Rapids Eastern and the state of the former Grand Trunk line it runs on today when it was under Central Michigan ownership. This included the now abandoned section from Ionia to Owosso (Lowell to Ionia is obviously not included because the CM didn't abandon that). I was told that the line had a pretty sustainable customer base, such as the huge elevator in St. Johns and that the then owner of the CM only wanted the line for the welded rail that was laid there. He said that a lot of people were pretty ticked off when the railroad ended operations and that things could've been different today had that line not been abandoned, or if the lines from Grand Rapids to Muskegon or Coopersville to Grand Haven hadn't been removed from service. If this is the case couldn't the Huron and Eastern (or Central Michigan) have been a much more dominant railroad and rail service in the Central part of Michigan would've been in much better shape if a through route ran by a regional could compete with the big Class 1's CSX and NS?

If G&W wanted to do it TODAY, could the line from Lowell to Owosso sustain itself with through traffic and create local traffic? St. Johns still has a pretty large elevator and plenty of towns could have economic upturn if a business moved in that wanted rail service. Rails WITH Trails is kinda the new thing now instead of ripping railroads out completely or wanting to rebuild on a converted ROW. Imagine if a NEW Central Michigan Railroad was created by combining the Huron and Eastern, the Grand Rapids Eastern and Marquette Rail after the line from Lowell to Owosso was rebuilt. Imagine if the Coopersville and Marne was bought out to the former PRR interchange (Passenger Trains could still run over the western portion of the line permitting) and the line from Marne to Muskegon was relaid and also incorporate the Michigan Shore. The Line from Coopersville to Grand Haven is too developed. This new Central Michigan would seem like a very dominating railroad that could create new business in many towns that wouldn't have to deal with the headaches of the big railroads. This new railroad that would interchange with CSX, CN, LSRC, GLC, and GDLK. I would think that regional carriers like Lake State, Great Lakes Central and Grand Elk would prefer this option over CSX and CN and it would take a bite out of the traffic on both of these lines, maybe even what little through freight traffic remains on the Michigan Line could be affected.

What would Michigan Railroads look like today if a couple of these Grand Trunk routes were still with us?

[AARR]

If G&W wanted to do it TODAY, could the line from Lowell to Owosso sustain itself with through traffic and create local traffic?

No, it couldn't then and it can't now. The elevator in St. John's is not huge and probably shipped 100-200 cars annually if they could get the cars from GTW.

The fertilizer plant in St. John's shipped around 50 cars annually when the track was abandoned. Although they ship a lot more than that from their new location in Ashley where they relocated in 2011.

At the time of abandonment (the lumber distribution yard in St. John's had relocated in Lansing for a loss of 500+ cars annually) the other customers were a pair of elevators in Ovid that each shipped 2-3 cars per month (they could have shipped 2-3x more but couldn't get cars), the elevator in St. Johns that shipped a few more than Ovid, and the fertilizer plant in St. Johns that shipped around 50 cars annually.

[trnwatcher]

Remember this line was built to get the Detroit,GrandHaven and Milwaukee to Grand Haven. The majority of the traffic on this line was overhead route traffic from cross lake shipping and the tge car ferries. Once the car ferries moved to Muskegon that is shen the GTW leased the GRIM from the Pennsylvania. Once the GTW pulled the plug on the Muskegon ferries the line dwindled quickly.

[AARR]

I feel what irritates railfans is CMGN was required to buy the Owosso-Muskegon segment in order to also get the Durand-Bay City segment. It is speculated that Mr. Pinkerton never intended to build up rail traffic and instead focused on maximizing the land value and selling it. From a business POV it was a smart investment but for railfans not so good.

[PatAzo]

First consider the cost to re-establish service between Lowell and Owosso. There are roughly 60 miles of track to be laid at $1M per mile. 50+/- grade crossings to be installed at $150,000+ each (cross bucks and stop signs won’t do). They are at over $60M just in track and crossings. Add in some bridge work, environmental studies, engineering work and a court challenge or two. For sack of argument say $70M and they are ready to move a car.

Now consider Genesee and Wyoming’s investors. They are going to expect a return on the investment. For $70M they have a short haul railroad with no customers and no revenue. It would be operated at a loss while trying to develop business.

We can debate the benefit to regional economy and the evils of Wall Street not taking a longer view. But the people that money belongs to will want a return. On a project like this private equity will want a 2-3 year payback, maybe four years. With no existing customer base generating revenue and no potential windfall like a mine opening the risk is too high, private equity will walk away.

[MQT1223]

First consider the cost to re-establish service between Lowell and Owosso. There are roughly 60 miles of track to be laid at $1M per mile. 50+/- grade crossings to be installed at $150,000+ each (cross bucks and stop signs won’t do). They are at over $60M just in track and crossings. Add in some bridge work, environmental studies, engineering work and a court challenge or two. For sack of argument say $70M and they are ready to move a car.

Now consider Genesee and Wyoming’s investors. They are going to expect a return on the investment. For $70M they have a short haul railroad with no customers and no revenue. It would be operated at a loss while trying to develop business.

We can debate the benefit to regional economy and the evils of Wall Street not taking a longer view. But the people that money belongs to will want a return. On a project like this private equity will want a 2-3 year payback, maybe four years. With no existing customer base generating revenue and no potential windfall like a mine opening the risk is too high, private equity will walk away.

What if it came back in sections, like if someone wanted service in Ionia so they build to Ionia again. But then this causes some potential business in St. Johns to come up. So if there was enough profit to build it in pieces with the ultimate goal of reconnecting Lowell and Owosso.

[Saturnalia]

Honestly, the GRE needs more customers with what they've got, before they start looking east!

[Raildudes dad]

Don't forget that RailTex was 2nd bidder on the MI GT trackage. They got GR to Ionia out of a court settlement against Mr Pinkerton over the sale. If they has been the winner, I'm speculating Muskegon to Durand would still be intact although Lowell to Durand might have been turned into a trail by now.. Muskegon to Harlem and an expensive Grand River bridge would be gone.

[PatAzo]

What if it came back in sections, like if someone wanted service in Ionia so they build to Ionia again. But then this causes some potential business in St. Johns to come up. So if there was enough profit to build it in pieces with the ultimate goal of reconnecting Lowell and Owosso.

In theory yes. If a large shipper/receiver opened who had a volume that would justify building to Ionia. No one will build on speculation, the business case has to be there. Many products are easily trans loaded and could be trucked to or from Ionia with a lower up front capitol cost. In reality what will ship to or from one of these towns that can't get there by truck?

[MQT1223]

Honestly, the GRE needs more customers with what they've got, before they start looking east!

I'm honestly surprised the GRE doesn't have a better customer base, there is a lot of potential that G&W has with that line.

Amway has always mystified me as to why they have such a big yard and they don't do more by rail.

Kings Milling in my opinion has exceeded the GRE's expectations in terms of what they ship. That 33 car train or whatever it was that Saturnalia caught last year was one heck of a delivery for the line. Shows you how much its come. If only things could be said for the other industries.

[trnwatcher]

Amway has always mystified me as to why they have such a big yard and they don't do more by rail.
.

Amway used to manufacturer more of their products in Ada. Like most companies they've moved more of that overseas and are shipping more by truck.