Eastern Railroad Discussion > Why doesn’t CN sell the B&LE?

The B&LE does not appear to logically fit in to the CN system since there is no direct physical connection. Therefore, would seem that CN would have an interest in spinning off this line through a sale to NS, CSX, or a G&W type.
However, I have not heard about any attempts by CN to sell off B&LE. Maybe they think they cannot sell it for what they consider it to be worth.
Would like to hear others thoughts.
ALLEN

It would be a great idea to sell it to increase competition.

Adding to that very interesting question is why has the CN held
​onto the "Erie Branch" which extends from CE Jct north of Albion
​to Wallace Jct, in Girard, PA.  Only traffic (perhaps 2x per month)
​serves the Emsco plant in Girard.  It was established some years
back that NS could do that work; Emsco is about a 1/2 mile from
​the NS.  The "B&LE" used to haul the Emsco cars, but in recent years
NS delivers the cars to Wallace, the CN runs into town light, does the
work, returns mtys to the NS, and then returns light.

There's probably (one would hope) good financial/business answers to
​these questions.  Maybe someday we'll know.

PeaBock619 Wrote:
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> It would be a great idea to sell it to increase
> competition.

How so?  B&LE already interchanges with NS and CSX.  And, with Union Railroad and with Wheeling & Lake Erie (?). But, W&LE is pretty much locked into CSX and NS anyway.

ETA: Maybe B&P, but they already connect there, too.



Edited 1 time(s). Last edit at 10/17/16 10:22 by Lackawanna484.

Even if there were reason to connect them, CN would have to get NS's blessing to use the W&LE as any kind of a link between CN rails in Toledo and the B&LE. The trackage-rights agreement W&LE exercises over NS between Toledo and Bellevue contains what I'd call a "poison pill," namely that if W&LE is sold to any other railroad, the trackage rights have to be renegotiated. Or something like that.
 



Edited 1 time(s). Last edit at 10/17/16 10:57 by toledopatch.

Think about what the B&LE carries in terms of traffic... Taconite south, coal north, plus scrap traffic... It's all dying traffic tied in with the steel industry, with hardly any prospect for future growth... There's barely any industry left, which would make a shortline operation difficult to say the least... Obviously what's left must still be profitable, or the railroad would have been downgraded/sold off a while ago... I know why it ended up in the CN camp in the first place; they wanted DM&IR, and that railroad was co-owned with B&LE, and the owners wanted an all-or-nothing deal... Why CN doesn't spin the Bessemer back off is an interesting question, but I'd suspect a lack of buyers for a route with slim chances for expanding the traffic base is a big reason...

In my 100% completely uneducated foamer opinion...



Edited 1 time(s). Last edit at 10/17/16 10:54 by MC6853.

MC6853 Wrote:
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> Think about what the B&LE carries in terms of
> traffic... Taconite south, coal north, plus scrap
> traffic... It's all dying traffic tied in with the
> steel industry, with hardly any prospect for
> future growth... There's barely any industry left,
> which would make a shortline operation difficult
> to say the least... Obviously what's left must
> still be profitable, or the railroad would have
> been downgraded/sold off a while ago... I know why
> it ended up in the CN camp in the first place;
> they wanted DM&IR, and that railroad was co-owned
> with B&LE, and the owners wanted an all-or-nothing
> deal... Why CN doesn't spin the Bessemer back off
> is an interesting question, but I'd suspect a lack
> of buyers for a route with slim chances for
> expanding the traffic base is a big reason...
>
> In my 100% completely uneducated foamer opinion...

Didn't the CN really want the EJ&E?  Maybe that and the DM&IR.  Again, part of the package deal.........

EJ&E was later on... My understanding was they wanted DM&IR mostly because of the trackage rights that former DW&P trains had to use on a portion of the Missabe (unsure of exactly where that was)...

Actually, what I would like CN to do is to dividend B&LE to their shareholders, therby making it an independent road.  (I have no financial interest in CN and none in any roads that connect with the B&LE.)  This would provide a real financial benefit for CN shareholders.  Additionally, this would provide for the independent identity and operation of this wonderful property for some time.
ALLEN   

Being primairly a bulk traffic road, I'd suspect that it contributes quite well to the CN bottom line on the basis of it not being much of a "loose car railroading" operation alone.  In this day of regional operations like G&W etc.  the notion of having a connected system is largely outmoded.

The CN Marketing department is what is holding up the CN from selling off, actually they probably wouldn't sell it off, but lease it out to a Short Line group. There has been talk and discussion about the possibility of opening a trans load facility on the line and running intermodal trains from Buffalo down to Butler via the BPRR and back onto the CN for Pittsburgh. None of this talk has ever gone too far other than initial planning discussions. What I don't understand is how or why they keep the signal operational. i would like to know what the Operating Ratio is for that line.

The transload facility is dead, as are the plans (currently, anyway) for
​the industrial park at Albion.  I think a tires-to-energy plant is still on the
​table, but not sure what rail impact that would have.  And, to the best of
my knowledge, there has been no coal this year, and dim prospects for the
future of that commodity.

I'd swear a few years ago there was a plan to sell the B&LE to G&W, but, G&W also wanted the URR which USS wanted too much for so the deal fell thru.

Posted from iPhone

DM&IR and B&LE were a package deal that also included lake boats (which CN, as a foreign corporation, could not operate so it leased those out). It was consummated in 2004. The key portion of DM&IR was indeed the section from Nopeming Junction to Itasca Junction that connected the DW&P and WC properties, including DW&P's Pokegama Yard which had been built along the DM&IR Interstate Branch. But CN has since shifted a lot of the DW&P's traffic south of Virginia, Minn., onto the DM&IR; in fact, I believe they pretty much run the railroad directionally between Virginia and Nopeming Jct., with southbound DWP traffic using the DM&IR. Northbound ore empties, limestone loads, and other traffic out of Proctor would still run the DM&IR side to reach the Iron Range, too.

The EJ&E was a separate acquisition, quite a few years later, although in a 2004 slide show I predicted CN would eventually take EJ&E over for the same reason it had just acquired DM&IR.

Who would fix the BPRR south of Buffalo ?  Currently BPRR uses NS to get from Machias to Buffalo.  CN traffic might not be something NS wants.

Bill Miller
Galt, ON

The BPRR has exclusive rights over the NS Machias Sub. No need to fix anything. I mean the BPRR leases the Machias Sub. We can anything we want to over the line.



Edited 1 time(s). Last edit at 10/17/16 18:29 by JOHNY5ALIVE.

toledopatch Wrote:
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> DM&IR and B&LE were a package deal that also
> included lake boats (which CN, as a foreign
> corporation, could not operate so it leased those
> out).

The boats operate under the name "CN Great Lakes Fleet".  GLF is registered in the US to comply with Jones Act restrictions and may likely be technically owned by Wisconsin Central Ltd., but it is not leased out and is actively managed by CN.

Gordon 

I hadn't thought about this part of it until earlier today... Another way to likely think about it is that a good portion of that iron ore on the Bessemer originates on the Missabe... If you include the lake boats that CN owns, too, you end up with a rail-water-rail route that looks like three different operations but actually is under the control of a single carrier... When you look at it that way, delivering the iron ore is technically a single-line service, which probably makes CN a fair amount of revenue... Selling off the B&LE would cause them to lose a portion of the haul; I'd guess that's the big reason they don't do it...

Now if mineral traffic happened to go belly-up tomorrow? My guess is it wouldn't be long before a "For Sale" sign appeared on the property...

I have to once again include the disclaimer: In my 100% completely uneducated foamer opinion...



Edited 1 time(s). Last edit at 10/18/16 07:21 by MC6853.

gbmott Wrote:
-------------------------------------------------------
> toledopatch Wrote:
> --------------------------------------------------
> -----
> > DM&IR and B&LE were a package deal that also
> > included lake boats (which CN, as a foreign
> > corporation, could not operate so it leased
> those
> > out).
>
> The boats operate under the name "CN Great Lakes
> Fleet".  GLF is registered in the US to comply
> with Jones Act restrictions and may likely
> be technically owned by Wisconsin Central Ltd.,
> but it is not leased out and is actively managed
> by CN.
>
> Gordon 

The subsidiary is named Great Lakes Fleet LLC, no CN in the name. In turn the boats are managed by Key Lakes LLC, 100% owned by US citizens and based in Duluth, MN.

I knew that when the CN got the DMIR they had to take the boats too. I don't think they really wanted them, but they did want the DMIR. US Steel told them all or nothing. I seem to recall it was costing them a million a month to run over the DMIR, and they ended up buying it.

I never even gave a thought to the boats until this thread about CN selling the BLE came up.

I did a quick search for Great Lakes Fleet, LLC., and found an interesting website. It did show the boats managed by Key Lakes, Inc., Duluth, Minnesota.
Interesting list of boats there.

Ron

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