Nostalgia & History > Milwaukee "Dead Freight" ?

Mark, I respectfully wish to add a few things here. Diesels need fuel moved to fueling locations. The Milwaukee's electrics didn't need fuel brought to them. It was right there in the wires. The Little Joes, and switchers being used in 1974 were long since paid for. They needed less maintenance than a diesel, and used no fuel while sitting. GE said they could last well into the 1980s. Pretty darn good 20 year old mainline power on heavy duty mountain railroading, eh?

As for the electrical system as a whole, the Milwaukee had five crews to maintain all of it's electrical system above it's tracks. Granted replacing the system ($39 million quote by GE in the early 70s) would have cost money, it would have paid for itself by the 1980s. Less maintenance, and less fuel costs with the electrics. The power contacts were for 99 years. The Milwaukee had a good deal buying electricity.

The Milwaukee's contracts with the power companies included shops, depots and signals. After cancelling their contracts for powering electric trains, the Milwaukee had to pay industrial rates. Add buying new SD40-2s, and fuel costs, the Joes ran for free. Just continuing to operate the Rocky Mountain Division electrification as is, would have saved the Milwaukee quite a bit of money for some time. Everything was in place, and paid for. The Joes peaked out at between 4,000 and 5,000 hp. That's alot of power that could have saved alot of money wasted on fossil fuels.

Cost of terminals wasn't really a big thing if the Milwaukee would have rebuilt the system, and connected it between Avery, ID and Othello, WA. Not as many diesels would have been needed, and crew districts would have been lengthened. (As they were after the power was turned off.) I doubt any new shops would have been needed to be built for a new electrical system. Everything was there.

IMHO, what it all comes down to was managers afraid of taking risks. C,M,&StP president Albert Earling wasn't afraid of risks. He was behind the PCE being built in the early 1900s. And it's electrification. If the managers of the Milwaukee in the 1960s and 1970s would have taken the risk of rebuilding the system with more power and new electrics, chances are there would still be tracks all the way from Chicago to Puget Sound. Many miles would be electrified, and saving huge sums vs. what railroads pay for fuel today.

IMHO, people who take risks get farther in life. Maybe every risk doesn't work out, but many do.

> The HUGE difference was the MILW electrification was already in place in 1974 when they decided to pull the plug. Needed upgrades would not cost nearly what new construction would have.


Yup, it was in place, but what was there was rapidly falling apart. While I didn't personally put my hands on any of that stuff, info I've seen & read indicates that much of the electrical system was essentially junk by the '70s - with a reliable operation requiring near-complete overhaul for big $. The main problems seemed to be with the substations and locomotives - both were badly in need of replacement/overhaul and those two elements represented a high % of the total cost required to keep things running.

I do RR consulting work for a living and we've come across electric operations similar to the MILW's at various locations around the world (similar traffic patterns, eqpt age/condition, etc). In every case when the systems are analyzed on a financial basis - considering all costs of ownership & operation - it doesn't pay to keep the operations going (the operation that existed north of Santiago, Chile is a perfect example). Note that those foreign systems all had equipment already in place, just as the MILW did. Even though you do end up paying more for diesel ownership & fuel vs. electric engs & power, in the end the RR's save millions of $ by getting rid of the cost burden associated with the supporting infrastructure (catenary/substations, etc).

The MILW may have been mismanaged on several fronts and bad decisions may have been made - including the eventual abandonment of the PCE. However, I have to say I'm not able to sign on to the popular belief that shutting down the electric operation was one of those bad decisions. I've seen the numbers on many similar systems and they just don't pay...

Take care,

Mark

Rob,

I suppose a book could be written on this subject, but I have one more question. I've heard it said that the real competitor of the PCE was not the BN but the UP. You were working for the UP at the time. Did the UP compete for the autos and other high-valued traffic?

BCHellman Wrote:
-------------------------------------------------------
> Rob,
>
> I suppose a book could be written on this subject,
> but I have one more question. I've heard it said
> that the real competitor of the PCE was not the BN
> but the UP. You were working for the UP at the
> time. Did the UP compete for the autos and other
> high-valued traffic?

Yes, of course. At UP we were very concerned about Milw competition to/from the PNW.

The auto unloading facilities in Seattle and Spokane were jointly served by Milw and UP, but not by BN. So UP competed for that business with Milw. I would say that circa 1973, Milw had a 70% share and UP a 30% share. A few years later, after Milw service collapsed, those percentages were reversed.

Portland auto unloading was on the SP in Tigard, so this was neutral turf. But UP had a time and service advantage to Portland. I would say UP had an 85% share of Midwest autos to Portland in 1973.

Milw blew away both UP and BN on intermodal movement of imports through the Port of Seattle. In those days, most of it was LCL, trans-loaded from marine boxes to domestic trailers. Milw thus had a better two-way haul in intermodal equipment than either UP or BN.

In the early 70s, Milw was on top for key accounts like Weyerhaeuser, Longview Fiber, Scott Paper, and Georgia Pacific from the PNW to eastern markets. By the late 70s, UP and BN had taken away much of Milw's share.

I like to think that UP did much better than BN over the course of the 70s. Traffic over the Blue Mountains grew much more strongly than traffic along Glacier Park. I think much of Milw's share went to the UP.

At UP I believe we ran much more consistent service than either BN or post-1973 Milw, but I think much of UP's success should be attributed at least as much to Milw self-destructing rather than UP innovation.

In the early 70s, UP and Milw were much more aggressive going after time-sensitive, high-rated commodities than was BN. Except for the Pacific Zip initiative, BN seemed to be preoocupied with growth in the coal fields rather than improvements in the PNW. The BN was badly short of power in the late 70s, the PNW shippers disliked the Bungleton. They remembered the service they got from NP and GN.

Best regards,

Rob L.

Mark,

You need to see the studies and the numbers on this one.

IF it was a given for the Milw to stay in business, rejuvenating the electrification was a no-brainer. The system was ridiculously cheap to operate. Its operating efficiencies were incredible. Just ask any of the crews who took trains over the mountains in the dead of winter. The system was NOT worn out. The Milw's own report said: "The only portion of the system in danger of failing is the track. All components of the electrical system still have decades of life." GE's report said the remaining life of the Joes was essentially unbounded. It did not recommned replacing the Joes, just adding power to replace the diesels. GE was willing to give incredibly cheap financing for the whole deal. Basically, no cash outlay whatsoever on Milw's part was required to fill the Gap and get new electric power to run west of Harlowton with no diesels. GE wanted the Milw electrification to stay alive so they could showcase it to other prospective clients in those dys of the Arab oil embargo.

Milw management abandoned the electrification becuase it believed the Milw (and the PCE in particular had no future as a stand-alone company), and it believed the investment in the electrification was an impediment to unification of the PCE with BN. They abandoned the electification because even though it was far superior economically, they had already decided to bail out of RR business.

There are lots of public documents about this and lots of testimony from people in the know. Check out the Milw Yahoo list, especially the postings of GE's study and Milw's study.

Milw middle managers like Brodsky were deeply shocked when top management had secretly given up on the RR yet publicly announced that they wanted to continue the RR and that discontinuing the electrification was the economically best decision for the on-going RR. It was the height of dishonesty.

Best regards,

Rob L.

mamfahr Wrote:
-------------------------------------------------------
> > The HUGE difference was the MILW electrification
> was already in place in 1974 when they decided to
> pull the plug. Needed upgrades would not cost
> nearly what new construction would have.
>
>
> Yup, it was in place, but what was there was
> rapidly falling apart. While I didn't personally
> put my hands on any of that stuff, info I've seen
> & read indicates that much of the electrical
> system was essentially junk by the '70s - with a
> reliable operation requiring near-complete
> overhaul for big $. The main problems seemed to
> be with the substations and locomotives - both
> were badly in need of replacement/overhaul and
> those two elements represented a high % of the
> total cost required to keep things running.
>
> I do RR consulting work for a living and we've
> come across electric operations similar to the
> MILW's at various locations around the world
> (similar traffic patterns, eqpt age/condition,
> etc). In every case when the systems are analyzed
> on a financial basis - considering all costs of
> ownership & operation - it doesn't pay to keep the
> operations going (the operation that existed north
> of Santiago, Chile is a perfect example). Note
> that those foreign systems all had equipment
> already in place, just as the MILW did. Even
> though you do end up paying more for diesel
> ownership & fuel vs. electric engs & power, in the
> end the RR's save millions of $ by getting rid of
> the cost burden associated with the supporting
> infrastructure (catenary/substations, etc).
>
> The MILW may have been mismanaged on several
> fronts and bad decisions may have been made -
> including the eventual abandonment of the PCE.
> However, I have to say I'm not able to sign on to
> the popular belief that shutting down the electric
> operation was one of those bad decisions. I've
> seen the numbers on many similar systems and they
> just don't pay...
>
> Take care,
>
> Mark

mamfahr Wrote:
-------------------------------------------------------

>
> Yup, it was in place, but what was there was
> rapidly falling apart.
> Mark

Well, no it was not rapidly falling apart. The substations in particular has received routine maintenance over all the years. While the equipment was 60 years old they motor generator sets had been rebuilt as needed. The transformers were pretty much bullet proof and the control circuits were pretty basic and even automated where possible. There were some leaky roofs in the substations in places but the structures themselves were in good shape. What would have been required repair would have been the wooden trolley poles. This could have been done incrementally and the replacements probably would have included an upgrade with weights used for the tensioning of the lines to reduce the annual spring tightening of the lines and the fall loosening of the lines. Lawrence Wylie's plans for an upgrade included keeping the 3300 vdc system intact with plans to move the MG sets to the heavy grade portions of the system and adding solid state components in the flatter portions of the line to replace the MG sets. As Rob L has noted GE and the western power companies were standing in line to be extremely generous to the MILW with regard to the upgrades.

Gas prices were going up and copper prices were going down. It was a bad time to scrap the electrification. I also note that Montana Power company moved right in to take over the 50kv supply line and an amazing number of those wooden poles are still in place. The last 10 years have seen number of the poles replaced but that is more than 20 yrs after the electrification was abandoned by the MILW. Prior to deregulation, electricity in Montana was a bargain.

DH7324 Wrote:
-------------------------------------------------------
> I've seen photos posted on here and other websites
> that have a Milwaukee train pictured in them known
> as the "Dead Freight". Does anybody know why was
> it called that? Thanks!

See what you started?

BCHellman Wrote:
-------------------------------------------------------
> DH7324 Wrote:
> --------------------------------------------------
> -----
> > I've seen photos posted on here and other
> websites
> > that have a Milwaukee train pictured in them
> known
> > as the "Dead Freight". Does anybody know why
> was
> > it called that? Thanks!
>
> See what you started?

He didn't start it. His question was asked and answered.

You started it with your comments that begged for a response.

Best regards,

Rob

> You need to see the studies and the numbers on this one.

Rob,

As you know, I've been asking around from time to time trying to obtain some documents on this topic as well as on the PCE overall - thus far I've come up empty handed. I'd love to get a look at some of the official documents/studies but haven't yet found anyone willing/able to share what they have. I'll eventually get 'hold of some things I suppose but so far I haven't been able to.


> IF it was a given for the Milw to stay in business, rejuvenating the electrification was a no-brainer. The system was ridiculously cheap to operate. Its operating efficiencies were incredible.

This was the key issue it seems - whether the MILW intended to keep running in the longer term or were instead in the early stages of an "exit strategy" or maybe just struggling desperately for survival. If they were cash starved and/or had already made the decision to "dis-invest" in the PCE as part of an exit strategy, then cutting the electric service would have made sense to them, based upon what's been said here (relieve short-term cash needs but sacrifice long-term benefits as a result...).

I'd mentioned that it was my experience that electric freight RRs needed some sort of subsidy to make electric operation worthwhile for the operator and, reading between the lines here, it appears that's what MILW was enjoying, in effect. Reading the various posts it appears that both GE and the power suppliers were essentially willing to provide MILW with assets (locomotives and associated equipment), power & even financing at or below cost for various reasons - essentially subsidizing the operation. I wonder how long they'd have been willing to keep that up? We know now what happened to inflation rates through the mid-70s but they wouldn't have known that was coming when they offered those "perks" to the MILW. Inflation would negatively impact interest rates, cost of labor, assets, etc - making the "subsidy" and the electric operation much more expensive (rising along with the cost of diesel...). I wonder if the various parties would have tried to pull back on their "help" in the mid/late '70s once they saw what it was costing them - and once they started to see a lack of serious interest on the part of the other RRs in electrification of their own lines. I don't know the answers here, just raising the points for consideration...

One other item I've asked about before but not gotten an answer on - does anyone know how high MILW's overhead wire was ATR? Given that double stack began appearing in the mid/late-80s in that corridor, assuming tunnels and other obstructions were cleared, if MILW's line & electrification had survived could they have operated double stack trains without modifying (or removing) the wire/catenary?

Anyhow, I have to say I appreciate the civilized discussion we've had here on this topic, I've learned a lot. This sort of MILW/PCE topic in other forums often seems to deteriorate into an emotional, sometimes nasty, exchange for one reason or another. A compliment to those who participated here on this thread. Thanks for sharing your thoughts and taking the time to provide info.

Take care,

Mark

I dont know how high off the rail the catenary was, but I know they were able to run tri-level auto racks. I've heard stories that occasionally the antennas of the autos would catch the trolley wire though so there couldnt have been much clearance above the racks. I would guess they would have had to raise the catenary to get double stacks thru though. (yet another cost the Milwaukee would have incurred to keep the PCE electrified)

-Mike

mamfahr Wrote:
-------------------------------------------------------
> As you know, I've been asking around from time to
> time trying to obtain some documents on this topic
> as well as on the PCE overall - thus far I've come
> up empty handed. I'd love to get a look at some
> of the official documents/studies but haven't yet
> found anyone willing/able to share what they have.
> I'll eventually get 'hold of some things I
> suppose but so far I haven't been able to.

As I suggested in my previous post, you should download the posted documents from the Milw Yahoo list. I think the folder called "Electrification" is where to look.

>
>
> > IF it was a given for the Milw to stay in
> business, rejuvenating the electrification was a
> no-brainer. The system was ridiculously cheap to
> operate. Its operating efficiencies were
> incredible.
>
> This was the key issue it seems - whether the MILW
> intended to keep running in the longer term or
> were instead in the early stages of an "exit
> strategy" or maybe just struggling desperately for
> survival. If they were cash starved and/or had
> already made the decision to "dis-invest" in the
> PCE as part of an exit strategy, then cutting the
> electric service would have made sense to them,
> based upon what's been said here (relieve
> short-term cash needs but sacrifice long-term
> benefits as a result...).

Exactly. Top management had already privately made the decision (or maybe the default by doing nothing) to bail, to work for liquidation and/or inclusion in other RRs. If the large required investments in the PCE track were not to be forthcoming, then it made no sense to commit to deals on electrification that depended on at least maintaining and preferably growing the traffic levels.

Milw required a serious strategic rationalization, a serious surgery. The whole system, as it was, was untenable. It needed a extremely strong and aggressive leadership willing to fight the battles to bail out of the Midwestern network and pour money into, and make the deals to nourish, the transcon. It never got the leadership.


>
> I'd mentioned that it was my experience that
> electric freight RRs needed some sort of subsidy
> to make electric operation worthwhile for the
> operator and, reading between the lines here, it
> appears that's what MILW was enjoying, in effect.

Not clear.

The existing Milw electrification system indeed had favorable power rates, but then all the heavy PNW industries enjoying the legacy Bonneville Power Admininstration contracts also had favorable rates. In exchange for low rates from Montana Power, Milw provded the right of way and transmission facilities to the power companies to enable them to link up their networks and wheel/swap power between the companies. That was worth a lot to the power companies. Getting right of way for high-tension lines is a big headache for the power companies.

The new deal proposed by GE offered extremely generous financing in the sense that Milw's operating savings could retire the investments involved. In effect, GE offered to take on the risk that Milw would be able to retain or grow its traffic levels, and, in that sense, it would have been a big subsidy to Milw in the form of capital radically cheaper than Milw could obtain in the marketplace. But again, a modernized, operating Milw electrification would have been worth a lot to GE as a marketing tool. So does that constitute a subsidy?

I think in general, you are absolutely right that it is hard to economically justify the huge investment required for new electrifications. But if already in place and the gear is not worn out and still serviceable, it is hard to beat.

> Reading the various posts it appears that both GE
> and the power suppliers were essentially willing
> to provide MILW with assets (locomotives and
> associated equipment), power & even financing at
> or below cost for various reasons - essentially
> subsidizing the operation. I wonder how long
> they'd have been willing to keep that up? We know
> now what happened to inflation rates through the
> mid-70s but they wouldn't have known that was
> coming when they offered those "perks" to the
> MILW. Inflation would negatively impact interest
> rates, cost of labor, assets, etc - making the
> "subsidy" and the electric operation much more
> expensive (rising along with the cost of
> diesel...). I wonder if the various parties would
> have tried to pull back on their "help" in the
> mid/late '70s once they saw what it was costing
> them - and once they started to see a lack of
> serious interest on the part of the other RRs in
> electrification of their own lines. I don't know
> the answers here, just raising the points for
> consideration...

You will enjoy reading the comparative studies. In retrospect, we all know what happened - PNW power rates did not move up much, while oil prices went way up. And copper prices went way down. The Milw analysts and the GE analysts did not consider a scenario even remotely close to what actually happened, yet the electrification still looked like the way to go.

>
> One other item I've asked about before but not
> gotten an answer on - does anyone know how high
> MILW's overhead wire was ATR? Given that double
> stack began appearing in the mid/late-80s in that
> corridor, assuming tunnels and other obstructions
> were cleared, if MILW's line & electrification had
> survived could they have operated double stack
> trains without modifying (or removing) the
> wire/catenary?

I don't have this handy, but I remember finding it out once. If I recall correctly, the clearance when catenary was in place was not sufficient for double stacks, certainly not sufficient for domestic double stacks. Without catenary, it was close.

Milw spent all that money in the early 60s to make clearance for tri-levels and high-cubes, but they didn't do enough to make room for double stacks plus catenary. So to keep electrified operation in the modern era, they would have had to go back and lower the tunnel floors some more and notch the tunnels.

>
> Anyhow, I have to say I appreciate the civilized
> discussion we've had here on this topic, I've
> learned a lot. This sort of MILW/PCE topic in
> other forums often seems to deteriorate into an
> emotional, sometimes nasty, exchange for one
> reason or another. A compliment to those who
> participated here on this thread. Thanks for
> sharing your thoughts and taking the time to
> provide info.
>

Yes, the insults and mud-slinging on the other list are pretty appalling.

Best regards,

Rob L.

mamfahr Wrote:
-------------------------------------------------------
> One other item I've asked about before but not
> gotten an answer on - does anyone know how high
> MILW's overhead wire was ATR?

24 feet 2 inches, according to Noel Holley's book.

rob_l Wrote:
-------------------------------------------------------
> BCHellman Wrote:
> --------------------------------------------------
> -----
> > DH7324 Wrote:
> >
> --------------------------------------------------
>
> > -----
> > > I've seen photos posted on here and other
> > websites
> > > that have a Milwaukee train pictured in them
> > known
> > > as the "Dead Freight". Does anybody know why
> > was
> > > it called that? Thanks!
> >
> > See what you started?
>
> He didn't start it. His question was asked and
> answered.
>
> You started it with your comments that begged for
> a response.
>
> Best regards,
>
> Rob

Actually, I'm really happy I did. I have a good feeling Rob knows what hes talking about, it's been completely fascinating. I had heard years ago (when I still lived 'back east') that MILW scrapped the electrification to try to raise money because copper prices were so high, but when they finally did, the prices had fallen and they only got about half of what the expected. I did not realize the PCE was such of "bone of contention" with foamers, or that the MILW upper management was so..corrupt, it would seem. Thanks to all who have contributed!

-Z Man

>> Anyhow, I have to say I appreciate the civilized
>> discussion we've had here on this topic, I've
>> learned a lot. This sort of MILW/PCE topic in
>> other forums often seems to deteriorate into an
>> emotional, sometimes nasty, exchange for one
>> reason or another. A compliment to those who
>> participated here on this thread. Thanks for
>> sharing your thoughts and taking the time to
>> provide info.
>
> Yes, the insults and mud-slinging on the other
> list are pretty appalling.

I concur and applaud all who have contributed in such a gentlemanly and professional manner.

steeplecab