Wednesday, December 7, 2016

Real Change in the Freight Transporation Industry

It's not that we oppose change to our communities.
Like those working in the rail industry, we just see the proposed Great Lakes Basin rail project as a generally dumb idea.

While Frank Patton imagines
GLBT with dreamy "Field of Dreams” eyes and a, "If you build it, they will come" attitude.
We chose reality of:
"The only constant through all the years has been baseball”.  Everything other than baseball changes.

Frank envisions all those tracks going to Chicago as though it always was and always will be.  In the rural Midwest, we see rail as a means of transportation for bulk commodities like grain.  We recognize market fluctuations and understand nothing is constant. Trends in freight transportation can take decades to move and sway.   Just like the path the creek chooses through the pasture moves and relocates itself depending on the water supply or lack thereof, supply and demand ebb and flow continuously.

Minneapolis once was a hot rail market for grain.  Now those elevators stand like silent tombstones throughout the Twin Cities.  Grain once traveled by ship through a series of locks and out the Saint Lawrence Seaway.  Here too, there may still towering silent structures reminding us of a bygone era. New Orleans is the new destination, the mighty Mississippi the new preferred route.

It's a basic lesson in economic history that farmers have learned.  Markets are not developed because that's where the rail tracks are laid.   Markets are developed because there is a supply or a demand and a means of transportation is discovered.  It's easy for people not familiar with the history of supply and demand to believe markets develop because that's where the railroad decided to lay the tracks.  Nothing could be further from the truth.    Tracks are laid because there is a product that requires transportation to or from a place.  

There is no question of what was first, the chicken or the egg.
The need for transporting something came first, the means by which to do that, whether it was rail, barge or truck, came second.

CEOs of actual railroads understand this basic concept:
They respond to a demand for transportation and compete for this demand with other modes of transportation.

The Chicago Stockyards are gone. The Joliet Stockyards are history.  Markets move on and the means of transportation move with it. Instead of shipping corn and beef to Chicago, today corn is shipped by rail from Illinois and Indiana to feedlots in Hereford, Texas.  Corn is shipped by rail from central Iowa to St. Louis where it is placed on a barge to go to New Orleans.  From there it travels via ship to somewhere in the world.
With Patton's logic, stockyards would still exist in Chicago because that's where the railroads chose to lay the tracks.

It's completely understandable why the Big 6 Class 1 railroads have no interest in a Chicagoland bypass toll railroad.    The industry is already too heavily vested into the Chicago market.  CEOs of the Class 1s recognize that to solve congestion in Chicago, the industry must get out of Chicago.    The industry must adapt elsewhere rather than embrace the congestion and build another layer on top of it.  Routes other than Chicago need to be developed as opposed to inviting more train traffic into the problem area.    Rail CEOs recognize that the nation’s transportation needs are changing and they must change with it in order to maintain or increase their market share.

Because baseball is the only constant in America.  Everything else changes.

Building more infrastructure in and around Chicago makes their problem worse not better.    They recognize their industry moves at the pace of a snail and legacy decisions like building more rail infrastructure in the greater Chicago area may turn out to be a curse if the nation's supply or demand decides to move elsewhere.  There is nothing new or innovative about building a bypass. This bypass does not address the bigger problem of transporting goods over longer and longer distances. Businesses are getting away from depending on their supplies coming from farther and farther away. They want a reliable and dependable supply line and are bringing suppliers closer.

Instead of Patton’s Chicago beltway,
*Intermodal container yard on the Mississippi River at St.  Louis area to create a new industry with barge to truck or rail at the old Army Depot in Granite City,  Illinois.
* Take advantage of barge freight being cheaper than rail freight and send containers up the Mississippi River into the Heartland of the United States. 
*Persuade the Department of Transportation for federal guaranteed loans to create an industry where no one dares.
* Create a new industry with containers by barge transportation to rail. Take west coast freight away from Chicago and create a new intermodal rail hub in the St. Louis area where none exists. 

That's real change to the freight transportation industry!

What Frank Patton is doing is assuming the only change in the rail industry's future is more of the same.  A bypass by its nature is only a bypass until urban sprawl catches up to it.  Frank isn’t think outside the Chicago box.  He’s only suggesting creating a bigger Chicagoland box with a beltway around the existing infrastructure.  Building a beltway around Chicago isn’t solving the problem but tying the rail industry to Chicago and making the problem worse.  The freight transportation industry will change.  Adding a Chicago beltway only makes the rail industry less adaptive to future change.

 It's not that the rail industry does not want to let Frank play trains with them.
It's not that we don't want industry or growth in our communities.

We all recognize if and when the market serviced by rail does not grow as speculated or as transportation needs change, we will be stuck with another abandoned rail, collecting empty beer and soda cans, plastic shopping bags and other trash in our back yards.

Rural Illinois already has thousands of abandoned rail track that pays little to no taxes!

Northern Illinois is not just collar counties for Chicagoland.  Collar counties of every large city are not utility closets.  Urban centers, like Chicago, fill our landfills.  They tap into our aquifers that we choose to protect.  We host their power plants when Chicago chooses to close theirs.   We host electric transmission lines.  We host their wind turbines.  We host their pipelines.  As “collar county” residents, many are tired of Chicagoland not fixing their own problems.  Adding a rail beltway is not a solution for Northern Illinois and it is not a solution for the rail industry.

Monday, December 5, 2016

Frank Patton had a Bad Day

This is shaping up to be a tough week for strawman railroader Frank Patton. First he sends a letter to the Surface Transportation Board explaining he can't keep up with the Environmental Impact Statement homework. EIS are hard and he wants to put that on hold and work on the Great Lakes Basin Transportation llc application to the STB.

Why does this sound like high school term projects?

Patton's motivations for this tactic are unclear.

Is  Frank in over his head?

Does Patton want to bifurcate and divide the process into two halve, move forward on two parallel tracks, and finish the process in half the time?

It’s hard to say exactly why Patton has requested to suspend work on the EIS.   Either Frank Patton is over his head with the EIS and financial backers are becoming hesitant to invest in GLBT at this point or GLBT has more strength on his team than originally estimated, and his team is capable of working in the application and the EIS.   That would mean the "suspension" of the EIS process is just a ruse to force his opponents to spread resources thinner.  This tactic could be logical if GLBT has greater resources than volunteers in a grassroots effort.  If Patton has the financial resources he claim, this tactic makes sense.    

My guess is it's getting lonely for Patton at GLBT as he has underestimated the resistance to the proposed GLBT project, and his financial backers are distancing themselves from him. In requesting a suspension of the EIS process, it shows the STB and the rail industry GLBT does not have the financial capabilities to complete the paperwork.  This creates a new question.

How does Frank Patton hope to run this transportation company if he can't manage the STB review process?

Frank's letter to the STB was made public Friday. Monday was worse for Frank. Norfolk Southern sent a letter to the STB indicating Patton has not talked to the railroad before sending its response to questions to the STB.   It turns out Patton's estimations of NS usage of the GLBT tracks are greatly over exaggerated.  The actual number of trains using the proposed GLBT is actually zero.

One can either look at this situation as Patton's GLBT team made up the information and protections in a smoke & mirrors tactic or the GLBT is so inept there is no communication between them and the Class 1 railroads.

If the numbers provided by GLBT about the potential NS usage are complete ca-ca, how accurate are the projections of usage from the five other Class 1 railroads?
Will BNSF use GLBT?

Maybe Patton had a heads-up and indications the NS letter was coming.  If that is the case, requesting to suspend the EIS process to work on the application is about the only tactical move he can make.  GLBT is getting shellacked by the rail industry and by grassroots though social media on grounds GLBT is not needed and there will be no benefit.   Patton needs to make progress with the application if he has any hope of justifying the existence of his proposed project.  

Can this week get any worse for Frank Patton?

Is anyone else giddy with excitement?

Here's a song to pick you up Frank.

Sunday, December 4, 2016

The GLBT Juggler of Imaginargy Economic Development

"You are jugglers of imaginary sins."  Martin Luther.  

Frank Patton reminds me of a the Martin Luther quote as he juggles claims of imaginary economic development while . Perhaps Patton is simply running his baler without any twine in it.  He's making a lot of noise, there's a lot churning, but his proposed economic development reasoning is lacking the "twine" that holds his plans together.  Like a hay bale with no twine, a nice tightly bundled business plan unravels and goes everywhere.  Such is the case with Frank and GLBT.

Frank Patton’s response to the Surface Transportation Board continues to follow his pattern of ambiguous answers.  Frank Patton just responded to the third information request of the STB. As with the answers to information requests #1 and #2, Frank Patton’s answers continue to be based on speculation.

This is not the time for GLBT is be ambiguous.
This is the time for GLBT to lay it out on the table.
Patton, provide specific answers to specific questions!

Thousands of families should not have their future being so masked that not even the game of 20 more follow up questions grants any clearer picture of Great Lakes Basin Transportation’s real impact on 11 counties in three states.

1. In GLBT’s latest response we learn that while GLBT wants 15,500 acres of eminent domain for a “railyard”  (wink, wink), GLBT will provide an easement for access to the  “(a)ccommodation of, and access to Heusing Cemetery and Zion Lutheran Church”.

Wow, how generous that GLBT will not seek to use eminent domain to legally steal the cemetery and the Zion Lutheran Church.  GLBT will just develop a “railyard” (industrial park) around it. 

Really?  GLBT intends to take half a township but leave the church and cemetery.  Mind explaining that one further Frank?

2.       GLBT still refers to a potential development of Rockford industrial park once GLBT comes to town. 

Why will this “development” as an industrial park be any more successful than the failure it is now?

As understood, the Rockford “industrial park” property is already serviced by the Illinois Railway (IR) from Rochelle.  Rochelle is indisputably touted as a success by many with its city owned short-line.  Rochelle has done a great job attracting industry, manufacturing, and jobs.  They have actually made their train success into a tourist attraction with their observation deck at the Rochelle Railroad Park.

3.       If Rockford is connected to the success of Rochelle with the IR, why has Rockford been a failure in developing industry? 

Could it be that Rockford is not a good location to develop a manufacturing industry that requires rail service?  Could it be that Rockford in not an ideal location to develop intermodal service, even with potential to develop additional air freight service?

4.       Why would running a parallel railroad from Rochelle to Rockford with GLBT and IR both going from Point A to Point B stimulate any new industrial development?

5.       Why isn’t GLBT seeking eminent domain to force the sale of the IR track?  Why seek to use eminent domain for a new track and an additional bridge when there is already an existing track?

It is likely that GLBT does not want to admit that Rockford is a bad location for industrial development, or rather that Rochelle is a better location for industrial development with both UP and BNSF going through the town as well as having access to Rt 88 and Rt 39.  Rochelle provides truck coverage to Chicagoland and beyond, as it is centrally located. Rockford on the other hand is out of the way, inconvenient and probably too far north.

The proposed GLBT rail is not going to bring success, development, and jobs to Rockford.  The cost of development and transportation to and from Rockford are disadvantages for potential developers. 

The fact that Rockford has an airport is irrelevant.  If air shippers wanted to utilize rail from UP or BNSF from Rochelle, they would have developed such a business plan already.    Patton is using the notion that GLBT could bring development to Rockford as a selling point where no selling point exist. 

Will an air freight company develop a rail freight business in Rockford to complement one another only with a purposed Great Lakes Basin Transportation?  That’s doubtful.  Rail freight to truck is a different industry than air freight to truck.  It would be interesting for those who think air to rail freight transportation could enhance Rockford.  The industry really doesn’t exist. 

6.       If the potential development for Rockford is real, why are air transportation companies like United Parcel, Federal Express, and other shippers silent?

There are no corporations showing excitement about the proposed GLBT.  No one is lining up to develop industries in Rockford or anywhere else.  As much as Frank Patton talks, there is no one backing him up.  As much as Patton wants to claim development will come, without corporations lining up to say they will bring business and jobs to Illinois, we have to face the fact that no potential jobs exist.   

Speculations do not make a feasible action plan. 

It’s the same with Class 1 railroads.  Patton’s latest answers to the Surface Transportation Board questions, are still based on the assumption UP, BNSF, CSX, NS, CP, and CN will use the proposed Great Lakes Basin Transportation rail.  Union Pacific and Norfolk Southern have indicated they will not use GLBT. 

Not a single railroad has stated they will use GLBT. 

Specifically, Burlington Northern SantaFe and CSX have not stated they will use GLBT.  There are no publicly identified customers for Great Lakes Basin Transportation’s toll railroad.  No one publicly supports Frank Patton.  The responses to the Surface Transportation Board by Frank Patton are based on the false presumption that there will be customers. 

7.         Where are GLBT’s proposed Class 1 railroad customers going to come from?

We know the Canadian Pacific buyout of Norfolk Southern is dead.  Does Frank Patton anticipate that the BNSF merger talks with CSX are actually continuing?  Is there something between BNSF and CSX that Frank Patton is privy to but we aren’t? Something that would make the proposed GLBT rail hugely beneficial to either one or the other? 

Have any backroom deals  been made between railroads that Patton is in on. And will profit from? (Are there backroom deals between a couple railroads that Patton is aware about and is instrumental to the marriage?

If the answer is no, if there is no planned merger between BNSF and CSX, then there is no need for the proposed Great Lakes Basin Transportation project.  Yes, a bypass around Chicago would be the ideal link to connect an Eastern continental railroad (like Norfolk Southern or CSX) to a Western continental railroad (like Union Pacific or Burlington Northern Santa Fe) to make a true transcontinental railroad.  

The Surface Transportation Board or the public should not view the silence from BNSF and CSX as a voice of support.  No Class I railroad has come out supporting Frank Patton and Great Lakes Basin Transportation.

Even still, it is curious why some of these companies remain silent.  It almost makes one wonder if there are still merger talks between two West and East railroads. 

Frank Patton needs to stop the ambiguity about who supports his plan and the real potential effects.  It’s time to come out with specific facts about GLBT and recognize speculation for what it is.   If there are really supporters of GLBT, then show us the GLBT community.  Show us the corporations who support GLBT and will build the industrial park in Rockford.  Show us the GLBT supporters in the Class 1 railroad industry.  If Patton is hiding supporters of Great Lakes Basin Transportation in the closet, it’s time to go public with his friends.  If there are Class 1 railroads supporting GLBT because it will benefit a potential merger, that needs to be discussed openly and not in backrooms.    If there are intentions for further development to the 15,500 acre “railyard”, like an oil refiner or a full service intermodal yard, then this needs to be discussed and planned accordingly in the Environmental Impact Study. 

This is not a time for Frank Patton and GLBT to play games with vague ambiguous hypotheticals.  Too many lives, family businesses and homes are at stake for merely game playing.  Speculating with the property and lives from unwilling participants in Frank’s rail adventure should not be allowed.