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Guelph Junction Railway

Allandale25

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Since there are already threads for the Orangeville Brampton Railway and the Barrie Collingwood Railway, I thought I would create one for the Guelph Junction Railway because this is a really interesting article. It does mention that maybe some of the rail lines in Guelph could also be used for transit, so there's also a transit relevancy to this article.

 

urbanperson

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OSR is starting to look like a joke. First they ditch the Cayuga sub, stranding 5 customers, then they dump the GJR contract. What the heck is going on over there? You really wonder too, because if they had done things right on the Cayuga sub by just repairing their own trestle in Tillsonburg rather than leasing 30 miles of track and going the long way around, nobody would have lost rail service. Maybe if they took the money they spent on dozens of unreliable 60 year locomotives they didn't need and spent it on actually running a functioning railroad, they wouldn't be in this situation.
 

crs1026

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OSR is starting to look like a joke. First they ditch the Cayuga sub, stranding 5 customers, then they dump the GJR contract. What the heck is going on over there? You really wonder too, because if they had done things right on the Cayuga sub by just repairing their own trestle in Tillsonburg rather than leasing 30 miles of track and going the long way around, nobody would have lost rail service. Maybe if they took the money they spent on dozens of unreliable 60 year locomotives they didn't need and spent it on actually running a functioning railroad, they wouldn't be in this situation.
First of all, OSR doesn’t own any of those trestles....they were/are leased from CP/CN. Those five customers may not have represented enough traffic or revenue to persuade either OSR or CN/CP to make the investment to repair them. That traffic is all interchange traffic, meaning CP/CP got the lion’s share of the revenue. It wasn’t enough, apparently.
Second, The Cayuga line was shed first by CN and then by STER. It was clearly marginal. OSR was persuaded to prolong its life because a possible source of added revenue was anticipated. That source fell through and is now a dead idea. Maybe the writing was always on the wall.
Third, OSR’s lease for its other core lines (Woodstock-St Thomas/Tillsonburg) reportedly can be cancelled on relatively short notice. If CP saw merit in taking the lineback, or had a competing offer that would make CP more money, they have cards they can play. And CP knows it.
Last, GJR is owned by the City of Guelph. There are two parties to that operation.

I am not taking a position one way or the other about how OSR manages their money or their assets. I am simply saying that what may look illogical to the observer may have its reasons. One can lament the shrinkage in the rail network, but the solution might have been less straightforward and had more stakeholders/influencers than you suggest.

- Paul
 

urbanperson

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First of all, OSR doesn’t own any of those trestles....they were/are leased from CP/CN. Those five customers may not have represented enough traffic or revenue to persuade either OSR or CN/CP to make the investment to repair them. That traffic is all interchange traffic, meaning CP/CP got the lion’s share of the revenue. It wasn’t enough, apparently.
Second, The Cayuga line was shed first by CN and then by STER. It was clearly marginal. OSR was persuaded to prolong its life because a possible source of added revenue was anticipated. That source fell through and is now a dead idea. Maybe the writing was always on the wall.
Third, OSR’s lease for its other core lines (Woodstock-St Thomas/Tillsonburg) reportedly can be cancelled on relatively short notice. If CP saw merit in taking the lineback, or had a competing offer that would make CP more money, they have cards they can play. And CP knows it.
Last, GJR is owned by the City of Guelph. There are two parties to that operation.

I am not taking a position one way or the other about how OSR manages their money or their assets. I am simply saying that what may look illogical to the observer may have its reasons. One can lament the shrinkage in the rail network, but the solution might have been less straightforward and had more stakeholders/influencers than you suggest.

- Paul
TBH, I can't see OSR having much of a future. In the first half of this year, their operations have been cut in half. No more Cayuga, and no more GJR. A few years ago, OSR was considered a massive success story with big expansion and a growing customer base. Now, you really can't say that about them anymore.
 

smallspy

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TBH, I can't see OSR having much of a future. In the first half of this year, their operations have been cut in half. No more Cayuga, and no more GJR. A few years ago, OSR was considered a massive success story with big expansion and a growing customer base. Now, you really can't say that about them anymore.
Regardless of the situation with the GJR - which was tenuous, to say the least, for the last couple of years - carloads are up year-over-year. They are now operating 3 and 4 trains 6 days a week from Salford. They have convinced dozens of companies to ship by rail (and in some cases, ship by rail again). How is that not a success story?

Dan
 

urbanperson

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Regardless of the situation with the GJR - which was tenuous, to say the least, for the last couple of years - carloads are up year-over-year. They are now operating 3 and 4 trains 6 days a week from Salford. They have convinced dozens of companies to ship by rail (and in some cases, ship by rail again). How is that not a success story?

Dan
There are many reasons OSR isn't the success story many make it out to be. The first thing is that their primary business is switching for CAMI. All the talk of expanding business and getting businesses to choose rail may have some merit, but not as much as people say. Primarily, they just switch an auto plant. The next thing is that they have WAY too many locomotives. They have over 20 locomotives, and for a railroad their size, that is too much, and to make matters worse, most of their engines are almost 60 years old and of obsure classes, making maintenance expensive. Finally, their recent retrenchment. This is the biggest pointer to them not being the success story people say that they are. In just a few short months, they have cut their track mileage in half. Of course, in the case of the GJR, it could be argued that they wanted out of a bad contract, but with the Cayuga sub, they just made a bad decision to take on a line that didn't have enough business to support itself. Though they can't take all the credit on that one, CN did spend over $1 Million to rehab the line before they began operation. Looking at the current situation, OSR doesn't really have many avenues for growth left. There really aren't many companies left that they can offer their services to and in some cases such as the south end of Tillsonburg, even if they wanted to serve an industry, their line wouldn't be able to reach them anymore.
 

smallspy

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There are many reasons OSR isn't the success story many make it out to be. The first thing is that their primary business is switching for CAMI. All the talk of expanding business and getting businesses to choose rail may have some merit, but not as much as people say. Primarily, they just switch an auto plant.
That is not correct. It's a large part, sure - but it's not their primary business, not by a long shot. And the work that they do within the CAMI plant isn't included within their carload totals anyways.

The next thing is that they have WAY too many locomotives. They have over 20 locomotives, and for a railroad their size, that is too much, and to make matters worse, most of their engines are almost 60 years old and of obsure classes, making maintenance expensive.
First off - they are a private corporation. They can buy as much or as little as they want.

Second off - of those "20 locomotives", many of them are solely to be used as spare parts sources to keep the other locos. The actual operating list of locos is closer to a dozen.

Third off - the President AND the General Manager of the railroad are both railfans (as well as a number of other key employees), and have purchased much of their roster due to their affinities to those particular models. And yet in spite of this, they have purchased other power for which they have no affinity towards, but were in good condition and is more economical to run than some of the older locos that they own.

Fourth off - you seem to not appreciate how the used locomotive market works, or frankly how a lot of old industrial equipment works. Just because something is "old" does not mean that maintenance will be expensive. The parts supply for many of those old locomotives is arguably better now than it was when they were state-of-the-art, as there are now multiple organizations supplying parts and know-how, and in some cases still producing new and manufactured parts.

Finally, their recent retrenchment. This is the biggest pointer to them not being the success story people say that they are. In just a few short months, they have cut their track mileage in half. Of course, in the case of the GJR, it could be argued that they wanted out of a bad contract, but with the Cayuga sub, they just made a bad decision to take on a line that didn't have enough business to support itself.
GJR - wasn't their trackage. They were contracted to operate there, just like they are contracted to switch CAMI. And just like how they used to be contracted to operate the Petro Canada facility in Clarkson.

Cayuga Sub - they are being forced out of operating there due to factors outside of their control, which you sort of touch on below but I don't think you really grasp how important they are. But then again, I guess the fact that they are looking to build a transload facility on the active rail to continue servicing the industries there counts for nothing?

Though they can't take all the credit on that one, CN did spend over $1 Million to rehab the line before they began operation. Looking at the current situation, OSR doesn't really have many avenues for growth left. There really aren't many companies left that they can offer their services to and in some cases such as the south end of Tillsonburg, even if they wanted to serve an industry, their line wouldn't be able to reach them anymore.
And the bridge is going to cost in excess of that amount, but no one is willing to step up to fork that money out. It certainly isn't in OSR's best interest (yet) to do so if they are solely a tenant, is it?

Dan
 

urbanperson

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That is not correct. It's a large part, sure - but it's not their primary business, not by a long shot. And the work that they do within the CAMI plant isn't included within their carload totals anyways.
Agree to disagree here. Beyond CAMI, their traffic is rather light. They rarely end up in St. Thomas and Tillsonburg more than 3 times per week.

First off - they are a private corporation. They can buy as much or as little as they want.
Doesn't make it a financially responsible decision though.

Third off - the President AND the General Manager of the railroad are both railfans (as well as a number of other key employees), and have purchased much of their roster due to their affinities to those particular models.
That much is obvious.

Fourth off - you seem to not appreciate how the used locomotive market works, or frankly how a lot of old industrial equipment works. Just because something is "old" does not mean that maintenance will be expensive. The parts supply for many of those old locomotives is arguably better now than it was when they were state-of-the-art, as there are now multiple organizations supplying parts and know-how, and in some cases still producing new and manufactured parts.
Sure, but just because something is old and cheap, that doesn't make it economical. Take for example, the FP9s they own. The FP9, thanks to its carbody construction is difficult to maintain and has poor ergonomics, particularly for the operation that OSR runs, where switching and reverse moves are very common. They would have been better off in museums. Of course, then there is the numerous MLW locomotives that they own, of which parts and know-how are scarce, especially given that MLW was purchased by Bombardier and stopped producing locomotives 40 years ago.

GJR - wasn't their trackage.
I am aware of this, which is why I acknowledged that in this specific instance that they may have been wanting out of a bad contract. With that said, GJR was one of OSR's biggest operations, so the loss of it is serious.

Cayuga Sub - they are being forced out of operating there due to factors outside of their control, which you sort of touch on below but I don't think you really grasp how important they are. But then again, I guess the fact that they are looking to build a transload facility on the active rail to continue servicing the industries there counts for nothing?
I perfectly understand the factors which have led to this situation, but those factors are so clear, it is surprising that OSR ever took the line in the first place. The end of service is not a good thing though, as it will almost certainly lead to abandonment and removal. They are expanding some transload facilities in the north end of Tillsonburg, but it is important to realize that these facilities only serve Future Transfer (Univar) and not any of the customers that they lost, such as Adient Seating or the ethanol plant. Transloading is also a rather poor solution for most customers, as the additional costs and complexity compared to delivering a car direct to a siding make trucking more economical in many cases. In addition, by losing network footprint, they have less adjacent land to their tracks where potential customers could locate to recieve rail service, meaning that they have less ability to grow in the future.
 
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crs1026

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Agree to disagree here. Beyond CAMI, their traffic is rather light. They rarely end up in St. Thomas and Tillsonburg more than 3 times per week.
On a carmiles per mile of track basis, their business is solid to support their lease. Many short lines survive on less. OSR has one of the best MOW forces of any short line in Ontario. If they were neglecting the track - as, for instance, GEXR seemed to, one might express concern.

Sure, but just because something is old and cheap, that doesn't make it economical. Take for example, the FP9s they own. The FP9, thanks to its carbody construction is difficult to maintain and has poor ergonomics, particularly for the operation that OSR runs, where switching and reverse moves are very common. They would have been better off in museums. Of course, then there is the numerous MLW locomotives that they own, of which parts and know-how are scarce, especially given that MLW was purchased by Bombardier and stopped producing locomotives 40 years ago.
The F’s are an oddity, and may have been a subjective choice, but they are not mechanically dissimilar to the GP9 model which OSR also uses extensively. MLW/Alco parts are actually quite easy to find - the prime mover is still found in other applications - and the RS23’s are one of the most fuel efficient locomotives out there. And, we don’t know the purchase prices or rebuild costs. Unless one has the spreadsheet, I wouldn’t conclude that OSR’s motive power strategy is hurting its bottom line.

I am aware of this, which is why I acknowledged that in this specific instance that they may have been wanting out of a bad contract. With that said, GJR was one of OSR's biggest operations, so the loss of it is serious.
It’s a lot of carloads, sure. But if you are losing a dollar per car, you can’t make it up on volume. Again, unless you have the contract, and can point to what cost OSR is compelled to incur, versus what Guelph charges and pays via its GJR entity, I wouldn’t secondguess them.

I perfectly understand the factors which have led to this situation, but those factors are so clear, it is surprising that OSR ever took the line in the first place. The end of service is not a good thing though, as it will almost certainly lead to abandonment and removal. They are expanding some transload facilities in the north end of Tillsonburg, but it is important to realize that these facilities only serve Future Transfer (Univar) and not any of the customers that they lost, such as Adient Seating or the ethanol plant. Transloading is also a rather poor solution for most customers, as the additional costs and complexity compared to delivering a car direct to a siding make trucking more economical in many cases. In addition, by losing network footprint, they have less adjacent land to their tracks where potential customers could locate to recieve rail service, meaning that they have less ability to grow in the future.
Consider the potential cost of repairing the trestle in Tillsonburg, which may exceed the cost of a dozen locomotives, and imagine that cost applied to the billing for those customers. The transload may well be the lesser evil, and once built it may attract additional customers.

- Paul
 

smallspy

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Agree to disagree here. Beyond CAMI, their traffic is rather light. They rarely end up in St. Thomas and Tillsonburg more than 3 times per week.
You can disagree all you want, you're still wrong. The carload numbers don't lie.

Doesn't make it a financially responsible decision though.
That's their problem. You're not a shareholder, are you?

Sure, but just because something is old and cheap, that doesn't make it economical. Take for example, the FP9s they own. The FP9, thanks to its carbody construction is difficult to maintain and has poor ergonomics, particularly for the operation that OSR runs, where switching and reverse moves are very common. They would have been better off in museums. Of course, then there is the numerous MLW locomotives that they own, of which parts and know-how are scarce, especially given that MLW was purchased by Bombardier and stopped producing locomotives 40 years ago.
I'm not going to disagree with the Fs. They aren't great for freight. I know why they bought them, so that's their problem. That's also why they aren't used often.

As for the MLWs, that's not remotely close to the truth. The specific parts of the MLWs are extremely common on the open market. There are organizations making brand-new parts to keep them running. And what isn't specific is shared with other locos of their vintage and even newer.

And then there's the fuel economy angle, as Paul touched on. Quite a few of the guys at OSR have said many times that if it hadn't been for the MLWs historically they would not have afforded to be able to keep running. They use about 25% less fuel than an equivalent EMD loco.

I am aware of this, which is why I acknowledged that in this specific instance that they may have been wanting out of a bad contract. With that said, GJR was one of OSR's biggest operations, so the loss of it is serious.
It's substantial, yes. But is it going to result in their downfall? Nope. Hell, I suspect that they feel that they are on better financial footing with it out of the way.

I perfectly understand the factors which have led to this situation, but those factors are so clear, it is surprising that OSR ever took the line in the first place.
Then no, I don't think you do understand. OSR took on a contract from CN to service the line, because it was no longer cost-effective for CN to do so. If OSR didn't feel like the traffic justified it, than they would have just told them "no". That they did means that either they did feel that the traffic could be justified, or that CN threw in incentives to make it worth their while.

As to which one of those you think it applicable, I'll leave that to you.

The end of service is not a good thing though, as it will almost certainly lead to abandonment and removal. They are expanding some transload facilities in the north end of Tillsonburg, but it is important to realize that these facilities only serve Future Transfer (Univar) and not any of the customers that they lost, such as Adient Seating or the ethanol plant. Transloading is also a rather poor solution for most customers, as the additional costs and complexity compared to delivering a car direct to a siding make trucking more economical in many cases. In addition, by losing network footprint, they have less adjacent land to their tracks where potential customers could locate to recieve rail service, meaning that they have less ability to grow in the future.
The ethanol plant will be trucking their product to the transload facility. I don't know about anyone else, but apparently they have made the facility available to existing and new customers should they be able to use it.

Yes, it is a poor solution. But it may also serve as a bridgehead - if the traffic level increases and gets to a critical mass, then the question will need to be asked: "can the bridge be justified?"

Dan
 

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