David Versus Goliath in Central Montana

by Steve Eshom on April 6, 2010

Last month the Great Falls Tribune published an article about the Central Montana Railroad (David) and its struggles with BNSF (Goliath) over subsidy payments BN agreed to pay when the Milwaukee Road shut down in 1980.  In January I published a post where I questioned the future of the Central Montana Railroad considering the planned fertilizer hub and the loss of those subsidy payments.  From the way the article reads others have the same questions.

CMR

Inside the article the Tribune covers both sides of the subsidy payment situation and the impact on the affected parties.  Most importantly the article discusses the famer’s point of view because after all they are the customer.  I think the farmer’s opinion (expressed in where they do business) is quite important here as it may truly determine the future of the CMR.  In fact I think the comments in the article are quite telling.  ”Some farmers in the area are torn. They clearly don’t want to lose the option of trucking grain to the nearby Central Montana Co-op elevators in Denton and Geraldine [on the CMR], but they are also pragmatic business operators.  Even with the extra miles, they still can make more money by driving to the new shuttle loaders built in the last decade in Moore, Moccasin and Carter.”  The bottom line is if the CMR can offer rates that are competitive for farmers they will stay put and so will the CMR.

Chew Choo

On the other side of this is the CMR.  When all the business, legal, and capitalism is removed I find these statements from the article most important (and encouraging) to railfans.  Carla Allen, general manager of CMR, was quoted as saying “…the line is not in jeopardy and that it is working within its capabilities to continue delivering loaded cars to the BNSF line in Moccasin, even though the short line has received no BNSF payments since November. We don’t solely depend on freight for revenue. We’re in business and we plan to be here.”  ”…other revenue is brought in from the Charlie Russell Chew Choo dinner train, storing cars and maintaining track for other rail companies.”

From a railfan’s perspective I hope Carla is right on!  If not another section of the former Milwaukee Road may fall.

  • http://www.oil-electric.com/ Robert

    Are my senior eyes failing me, or are those a/c units atop the mechanical hump?

  • http://steveeshom.com/ Steve Eshom

    Yes, those are A/C units. The RDCs no longer contain their original engines so these A/C units supplied cool air and were powered by a generator.

  • http://www.oil-electric.com Robert

    ('m always asking questions) Found out the “fleet” of RDC, 1-1 and 4-9's, began their career on the Boston & Maine. I do believe, with modest attention, Budd's cars will out live some of us! The roof top “ornaments” were added sometime after 2004.

  • http://steveeshom.com/ Steve Eshom

    “Ornaments”. That's a nice way to put that :-) I'll agree about the longevity of an RDC. I rode one of BC Rail's for 10 days back in 2000 and I'll say the thing was built well and built to last. Go Budd!

  • vermontanan

    I think Carla is being a bit disingenuous here. I fully expect one day for the farmers in the area to wake up and find that the railroad is filing for abandonment. Carla may say that Central Montana has other revenue, but it isn't much. The Chew Choo dinner train can hardly be huge revenue source. It runs mostly once a week in the summer, and a few other times during the year. It's a big investment for a train that operates in a sparsely populated area, is off the beaten path as far as major highways to bring in tourists, and that these types of operations, regardless of where they are, always have a tough time making it. They're basically done as tourist draws to help OTHER businesses in the area, but for themselves, they're a hand-to-mouth type operation.

    The Central Montana does get some money from storing cars, but this has to be minimal, too. In fact, within the past month, a stored coal train was moved off the Central Montana, reducing that income source. Maintaining track for other railroad companies? Where? Again, Denton, Montana (or anyplace in Montana) is not centrally located as a source for such a service. It's also interesting that the Central Montana will not be transparent with its rate structure.

    All this is on a backdrop of a very tough piece of railroad to maintain. The Central Montana is famous for its high bridges and a tunnel along the Chew Choo route, but beyond that, it has track that can't handle heavier locomotives and for grain shipped from Geraldine, a very steep 1.5 percent grade climbing away from Arrow Creek. Someday, a lot of work will be required on this line.

    The culprit here is not BNSF, but the State of Montana, which had no plan (after acquiring it from BN about 1984) for the line's continued operation. The only strategy was the continued (in perpetuity, evidently) subsidy by BN, and later BNSF, that would make up for the extra expense in hauling the grain off the Central Montana to Moccasin. After the shuttle elevator was constructed at Grove (Moccasin), it would have helped if the state would have seen the writing on the wall, and put some money into the Central Montana to upgrade the track to allow BN/BNSF power to handle shuttle trains to a similar facility on the Central Montana, like Denton, that could have possibly saved the line. Instead, shuttle facilities have been built all around the Central Montana, but not on it.

    The situation with the Central Montana has a bit of deja vu to it. The Central Montana is ex-Milwaukee Road track, part its route from Harlowton to Great Falls, and on to Agawam. The part of the route from Geraldine east to Lewistown was kept, as the track between Geraldine and Great Falls was unstable. Later, due similar problems with the wooden bridge over Spring Creek, cars off the Central Montana line were routed directly to Moccasin, rather than through Lewistown, which is what we have today. Central Montana interchanges its cars to BNSF at Moccasin, and trackage in Lewistown has been removed. So, what we have now is grain that is loaded in Geraldine being moved southeast 85 miles to Moccasin, and then BN moves it back west to Great Falls, and then to the Pacific Northwest (most grain loaded on Central Montana goes to Pacific Northwest, usually the Portland/Vancouver area). This backhaul is not unlike that of the Milwaukee Road prior to 1980, when grain from Great Falls had to be backhauled first to Harlowton, then west to the Pacific Northwest. This put the Milwaukee at a hundreds-of-miles disadvantage when it came to shipping grain off this line. Couple this with the fact that the grade ascending Arrow Creek was greater than any place along BN from Great Falls to Portland, and it is obvious that the Milwaukee operation was unsustainable, and they're not around today. The Central Montana situation is simply a smaller version of the same thing, and it, too, is unsustainable.

  • http://steveeshom.com/ Steve Eshom

    Thank you Mark for the nice reply!

    When I read Carla's comments I too was skeptical. I don't see how other business involvement that CMR has can subsidize the railroad and have it still makes sense to keep the railroad operating. If the other business like track maintenance are so good why take the profit from that and put it towards an operation that works at a loss?

    I know we don't have all of the CMR's finances in front of us so we are working only on what we find in the media but all the points you mention are certainly valid reasons why this operation just won't last. I hope the state of Montana puts their money towards working with BNSF on getting good rates from Moore, Moccasin (Grove), and Carter instead of wasting too much time on this issue.

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