Watco wins GrainCorp's Queensland contract

 
  Graham4405 Minister for Railways

Location: Dalby Qld
SDSR has agreed in principle to Watco, a USA based commercial rail freight company, to base their maintenance facilities and activities onsite at the Precinct. This 10 year relationship will have a very positive impact on future SDSR activities and also local job prospects. Expect to see new 94.5 ton locomotives and wagons and container units based in Warwick in approx. 12 months. More details as they become available.
SDSR news sheet
An interesting development indeed!

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  james.au Chief Commissioner

Location: Sydney, NSW
SDSR has agreed in principle to Watco, a USA based commercial rail freight company, to base their maintenance facilities and activities onsite at the Precinct. This 10 year relationship will have a very positive impact on future SDSR activities and also local job prospects. Expect to see new 94.5 ton locomotives and wagons and container units based in Warwick in approx. 12 months. More details as they become available.
An interesting development indeed!
Graham4405
Very interesting.....

Wonder if Warwick council had some role in it, provided incentives etc?
  Sulla1 Chief Commissioner

Sounds like the Southern Line between Toowoomba and Warwick is about to get a lot busier with transfers. The mention of container wagons is interesting too.
  james.au Chief Commissioner

Location: Sydney, NSW
This changes our thinking on the future of the SW line too....
  Sulla1 Chief Commissioner

This changes our thinking on the future of the SW line too....
james.au

Predicting what will happen with railways is a cinch...until the railways do something unpredictable. A good example of how multiple operators and open access have and will become "disruptive" to the status quo in Queensland. Watco appears to be betting that nothing will be changing to the Queensland grain network for at least the next decade - both with the type of rollingstock it is purchasing and where it is basing its maintenance.

Most of Aurizon's grain rollingstock maintenance is done at Toowoomba's Willowburn Workshops (with some at Pring and Stuart), so moving down the road to Wariwck would have made a lot sense to Watco when it started looking for facilities.
  james.au Chief Commissioner

Location: Sydney, NSW
I have to do more thinking on this but I cant help but wonder what the complete net economic position of this is.  Ie, keep NG and invest in new rollingstock, or convert to SG and allow existing SG fleets to be better utilised.

Unfortunately in these decisions the government doesnt take the full economic view - just their own view I think.
  br30453 Train Controller

I have to do more thinking on this but I cant help but wonder what the complete net economic position of this is.  Ie, keep NG and invest in new rollingstock, or convert to SG and allow existing SG fleets to be better utilised.

Unfortunately in these decisions the government doesnt take the full economic view - just their own view I think.
james.au
I have been involved studies in conversion of parts of the QR network so am conversant with what is involved in such a project.

This is basically a 'closed' operation so the operational costs of keeping the existing NG network and purchasing new rollingstock would far outweigh any relative benefit of converting to standard gauge.

It is not just changing the gauge of the track but modifying structures and trackside fittings to the clearances necessary for the larger SG rollingstock.

Converting to the "magic" standard gauge is not the cure for all ills, or supposed deficiencies in NG operations.
  james.au Chief Commissioner

Location: Sydney, NSW
I have to do more thinking on this but I cant help but wonder what the complete net economic position of this is.  Ie, keep NG and invest in new rollingstock, or convert to SG and allow existing SG fleets to be better utilised.

Unfortunately in these decisions the government doesnt take the full economic view - just their own view I think.
I have been involved studies in conversion of parts of the QR network so am conversant with what is involved in such a project.

This is basically a 'closed' operation so the operational costs of keeping the existing NG network and purchasing new rollingstock would far outweigh any relative benefit of converting to standard gauge.

It is not just changing the gauge of the track but modifying structures and trackside fittings to the clearances necessary for the larger SG rollingstock.

Converting to the "magic" standard gauge is not the cure for all ills, or supposed deficiencies in NG operations.
br30453
No I'm not saying that it is, and for large parts of the NG network in Queensland (eg Metro, NCL, QCCN) the economics of such a conversion wont stack up.  But there are parts of the network where it may, and given the similarity with the traffic in NSW (and Vic/SA for that matter), the SWQ lines would be in my view the best candidates.  And I think of these, goondiwindi-Thallon is a standout for an assessment.

First question I guess to try and quantify this - what would be an estimate for the capital cost of rolling stock to Watco for the SWQ services?  Given the alternative is current SG fleet, and if for now we assume that there would be no additional capital cost requirement in the SG scenario to purchase new rolling stock. My logic may be a little loose here but that cost would be a proxy for what could be spent on the network to convert it given it would represent saved expenditure.
  RTT_Rules Dr Beeching

Location: Dubai UAE
This changes our thinking on the future of the SW line too....
james.au
No, I would disagree, as soon as the Inland is open if not before, the far more direct, faster heavier axle load and longer train option of the Inland where its close to existing NG loading points will see the NG dropped/closed.

Watch the Feds also throw money to support the switch and the Qld govt dump the NG as fast as they can.

Basically if we think NG trains will continue from Gondawindi taking twice as long as the SG, with less than half the train weight, we are dreaming.

Prediction, if the Inland is opened 2025, the NG will be closed within 5 years after, if that long.

Someone posted the new operator has a 10 year lease, I doubt they will be extending! The rolling stock will either be fitted with SG bogies or sent elsewhere.
  RTT_Rules Dr Beeching

Location: Dubai UAE
I have to do more thinking on this but I cant help but wonder what the complete net economic position of this is.  Ie, keep NG and invest in new rollingstock, or convert to SG and allow existing SG fleets to be better utilised.

Unfortunately in these decisions the government doesnt take the full economic view - just their own view I think.
I have been involved studies in conversion of parts of the QR network so am conversant with what is involved in such a project.

This is basically a 'closed' operation so the operational costs of keeping the existing NG network and purchasing new rollingstock would far outweigh any relative benefit of converting to standard gauge.

It is not just changing the gauge of the track but modifying structures and trackside fittings to the clearances necessary for the larger SG rollingstock.

Converting to the "magic" standard gauge is not the cure for all ills, or supposed deficiencies in NG operations.
No I'm not saying that it is, and for large parts of the NG network in Queensland (eg Metro, NCL, QCCN) the economics of such a conversion wont stack up.  But there are parts of the network where it may, and given the similarity with the traffic in NSW (and Vic/SA for that matter), the SWQ lines would be in my view the best candidates.  And I think of these, goondiwindi-Thallon is a standout for an assessment.

First question I guess to try and quantify this - what would be an estimate for the capital cost of rolling stock to Watco for the SWQ services?  Given the alternative is current SG fleet, and if for now we assume that there would be no additional capital cost requirement in the SG scenario to purchase new rolling stock. My logic may be a little loose here but that cost would be a proxy for what could be spent on the network to convert it given it would represent saved expenditure.
james.au
There is barely enough traffic to keep the NG open and viable on its own, it will be closed and the Qld govt has already started to make moves with talks it will hand over the SW network.
  james.au Chief Commissioner

Location: Sydney, NSW
This changes our thinking on the future of the SW line too....
No, I would disagree, as soon as the Inland is open if not before, the far more direct, faster heavier axle load and longer train option of the Inland where its close to existing NG loading points will see the NG dropped/closed.

Watch the Feds also throw money to support the switch and the Qld govt dump the NG as fast as they can.

Basically if we think NG trains will continue from Gondawindi taking twice as long as the SG, with less than half the train weight, we are dreaming.

Prediction, if the Inland is opened 2025, the NG will be closed within 5 years after, if that long.

Someone posted the new operator has a 10 year lease, I doubt they will be extending! The rolling stock will either be fitted with SG bogies or sent elsewhere.
RTT_Rules
Yeah but if Watco set up at Warwick, they'll need to leave at least Warwick-Toowoomba open.

But between now and 10 years, it might be a nice way of getting a new SG operator into the network....
  RTT_Rules Dr Beeching

Location: Dubai UAE
Yeah but if Watco set up at Warwick, they'll need to leave at least Warwick-Toowoomba open.

But between now and 10 years, it might be a nice way of getting a new SG operator into the network....
james.au
Yes it will stay open while they pay the rent and use the line.

The benefit of the Inland and converting the SW traffic to SG along with the works currently going on in Vic NW is that it increases dramatically the Grain network on SG and makes multiple operators more viable and flexible with regards to grain production. Certainly we should see less of grain fleets being mothballed because of localised drought on gauge captive regions.
  james.au Chief Commissioner

Location: Sydney, NSW
The benefit of the Inland and converting the SW traffic to SG along with the works currently going on in Vic NW is that it increases dramatically the Grain network on SG and makes multiple operators more viable and flexible with regards to grain production. Certainly we should see less of grain fleets being mothballed because of localised drought on gauge captive regions.
RTT_Rules
I am the converted on this....
  Sulla1 Chief Commissioner

Let's look at it from Watco's point of view. It has made good business out of near moribund grain lines across Kansas and the Great Plains, and has just resuscitated an old New York Central line in West Virginia that was partly closed by Norfolk Southern and then sold. It's now hauling chemicals and coal that wasn't there two years ago.

The GrainCorp contract will come close to making Watco the single quasi-shortline operator on the Southern and Southwestern lines, free to attract other traffic like cotton, plus roadhauling NSW grain and cotton to Goondiwindi...and generally doing things Aurizon hasn't been bothered with now or in the future. Regional and rural freight are things Watco is good at.

It may well be thinking it has a good ten years to grow regional freight where it can dominate the market. It may even be thinking it can continue to offer shortline services on the Southwestern Line, even if the Inland Rail happens...that is what shortline operators do.

Now look at the Inland Rail project. There are still no new sections built or committed to building...2025 is now seven years away with nothing but moveable lines on maps so far. The current Federal Government is the major proponent, support from the states hasn't been wildly forthcoming. A likely change of government in Canberra will probably delay construction while more reports and studies are done. I'm thinking (and Watco maybe too) that 2025 will come and go and only existing infrastructure will still be in place.

Lets just see if Watco goes after other freight next year and how well it does with the rail assets it has to use before deciding what will and won't be around when we get to 2025...I suspect the situation has changed and perhaps radically.
  RTT_Rules Dr Beeching

Location: Dubai UAE
Let's look at it from Watco's point of view. It has made good business out of near moribund grain lines across Kansas and the Great Plains, and has just resuscitated an old New York Central line in West Virginia that was partly closed by Norfolk Southern and then sold. It's now hauling chemicals and coal that wasn't there two years ago.

The GrainCorp contract will come close to making Watco the single quasi-shortline operator on the Southern and Southwestern lines, free to attract other traffic like cotton, plus roadhauling NSW grain and cotton to Goondiwindi...and generally doing things Aurizon hasn't been bothered with now or in the future. Regional and rural freight are things Watco is good at.

It may well be thinking it has a good ten years to grow regional freight where it can dominate the market. It may even be thinking it can continue to offer shortline services on the Southwestern Line, even if the Inland Rail happens...that is what shortline operators do.

Now look at the Inland Rail project. There are still no new sections built or committed to building...2025 is now seven years away with nothing but moveable lines on maps so far. The current Federal Government is the major proponent, support from the states hasn't been wildly forthcoming. A likely change of government in Canberra will probably delay construction while more reports and studies are done. I'm thinking (and Watco maybe too) that 2025 will come and go and only existing infrastructure will still be in place.

Lets just see if Watco goes after other freight next year and how well it does with the rail assets it has to use before deciding what will and won't be around when we get to 2025...I suspect the situation has changed and perhaps radically.
Sulla1

Agree,

The Inland basically will run past most of the existing freight sources with exception of Thallon on both SW and Millerium branches. Any work they pick up will easily transfer to SG once the line is in and suitable arrangements installed at both ends. The SG will offer significant advantages in train efficiency over the current NG.

Is the Inland just lines on a map with a "undetermined political future", I doubt it. Numerous studies starting in early 2000's under Howard over the years had the Inland due for opening around 2025, this has survived a few changes of govt and 4 PM's. Progressive funding for the Inland corridor (existing) has been ongoing. To the best of my knowledge the ALP under Billy has not talked the project down or attempted to block funding.

Is there risk that the project won't be completed by 2025? Yes, but is it high? I doubt it. How well its completed is another story. ie a bit like the One Nation SG to Brisbane Port and Mel to Adelaide.

The Qld govt has been supportive although rightly the Qld govt should be dropping at least $1B on the table to support the project that fixes the outdated SW and Western NG network for them. The Qld govt around 1 May 2018 started the process to hand over the SW corridor to the Feds for the Inland project, thus making the Inland easily to complete with control of the land for which some of the line will be built on and conversion to DG.
  james.au Chief Commissioner

Location: Sydney, NSW
RTT can you elaborate on the events around 1 May?  I haven't seen any chatter about a SW handover since the original article last year
  RTT_Rules Dr Beeching

Location: Dubai UAE
RTT can you elaborate on the events around 1 May?  I haven't seen any chatter about a SW handover since the original article last year
james.au
Sorry I meant 2017

I cannot open the paywall, but story was originally free to read.

https://www.couriermail.com.au/.../queensland/queensland-government/...queensland/.../...
May 1, 2017 - ARTC's Melbourne-Brisbane inland rail proposal ... The State Government is believed to be considering signing over ownership of the existing Goondiwindi to Toowoomba rail corridor – part of the South West Rail System – to the ... The Federal Government allocated $593 million to buy land for the project ..
  james.au Chief Commissioner

Location: Sydney, NSW
Let's look at it from Watco's point of view. It has made good business out of near moribund grain lines across Kansas and the Great Plains, and has just resuscitated an old New York Central line in West Virginia that was partly closed by Norfolk Southern and then sold. It's now hauling chemicals and coal that wasn't there two years ago.

The GrainCorp contract will come close to making Watco the single quasi-shortline operator on the Southern and Southwestern lines, free to attract other traffic like cotton, plus roadhauling NSW grain and cotton to Goondiwindi...and generally doing things Aurizon hasn't been bothered with now or in the future. Regional and rural freight are things Watco is good at.

It may well be thinking it has a good ten years to grow regional freight where it can dominate the market. It may even be thinking it can continue to offer shortline services on the Southwestern Line, even if the Inland Rail happens...that is what shortline operators do.

Now look at the Inland Rail project. There are still no new sections built or committed to building...2025 is now seven years away with nothing but moveable lines on maps so far. The current Federal Government is the major proponent, support from the states hasn't been wildly forthcoming. A likely change of government in Canberra will probably delay construction while more reports and studies are done. I'm thinking (and Watco maybe too) that 2025 will come and go and only existing infrastructure will still be in place.

Lets just see if Watco goes after other freight next year and how well it does with the rail assets it has to use before deciding what will and won't be around when we get to 2025...I suspect the situation has changed and perhaps radically.
Sulla1
Agreed, 2025 looks like a deadline that might slip, but the only things I would counter your other points with this with are:

1. The Inland is supported on both sides of the aisle, so I doubt a delay due to government change will be significant, if at all; and

2. All of the Queensland section from Goondiwindi to Brisbane is (currently planned as) DG, and will provide a vastly more competitive route with much higher TAL, and will most likely be the path of choice for operators, meaning the remainder of the SW line between Goondiwindi-Warwick-Toowomba and then down the range will become redundant

3. Watco would still be limited by low TAL on the current lines and the volumes and nature of the product dont lend themselves to low TAL haulage.
  LancedDendrite Chief Commissioner

Location: Trapped in a meeting with Rhonda and Karsten
Y'all shouldn't forget that GrainCorpse also has primary receival sites in the Central Queensland rail network and along the West Moreton line to Charleville, where there is no foreseeable gauge conversion. There appears to be no appetite to gauge convert any of the South West network branch lines that would connect to the Inland Rail route - only the Milmerran line looks like it will be fully decommissioned.

Warwick just happens to be Watco's maintenance and stabling base - sure it might be out of the way after Inland Rail goes in, but as long as either Warwick-Toowoomba or Warwick-Inglewood remain open they won't have any problems. Ideally their trainsets would be only doing runs from the ports to receival sites during grain season anyway.
  james.au Chief Commissioner

Location: Sydney, NSW
Agreed, though re GrainCorp, they are on record wanting the Thallon line standardised in their submission to the 2015 agricultural white paper (refer p9-10).

There are more documents i have from others (such as Port of Brisbane) that make it clear that they want better rail access to the port (all of which were being raised before the Inland connection to PoB became an issue), and they noted that lack of below rail investment and lack of above rail competition were major issues impacting the competitiveness and therefore use of rail to improve port efficiency.

There is a case to be examined here, just the Feds are not touching it as they are loaded up with the Inland, and Qld is not touching it as they are loaded up with debt and so may not be able to justify the spending, and their other rail projects like cross river.
  james.au Chief Commissioner

Location: Sydney, NSW
Here is some more interesting info, more recent too, in their submission to get exemption from the port regulations for Firshemans Island.  Refer page 11.

https://www.accc.gov.au/system/files/15-06-01%20ACCC%20Submission%20-%20Brisbane_for%20publication_2_0.pdf
  RTT_Rules Dr Beeching

Location: Dubai UAE
Y'all shouldn't forget that GrainCorpse also has primary receival sites in the Central Queensland rail network and along the West Moreton line to Charleville, where there is no foreseeable gauge conversion. There appears to be no appetite to gauge convert any of the South West network branch lines that would connect to the Inland Rail route - only the Milmerran line looks like it will be fully decommissioned.

Warwick just happens to be Watco's maintenance and stabling base - sure it might be out of the way after Inland Rail goes in, but as long as either Warwick-Toowoomba or Warwick-Inglewood remain open they won't have any problems. Ideally their trainsets would be only doing runs from the ports to receival sites during grain season anyway.
LancedDendrite
But how much traffic south of Toowoomba?

Goondiwindi to Thalloon will be gone as this will be SG for sure, why would you put up with the slow, light, short train outdated route? and any traffic around Inglewood will also be put on the SG.
  Graham4405 Minister for Railways

Location: Dalby Qld
WATCO
As you may have seen in the press, SDSR has been working in the background for several months to achieve a working partnership with WATCO. Watco Companies, LLC, is a Pittsburg, Kansas, based transportation company providing transportation, terminal and port, supply chain, and mechanical solutions for customers throughout North America and Australia.

There is a great opportunity for rail infrastructure in the South East of Queensland in reversing the decline in rail usage and getting heavy freight off the local roads. New diesel locos and freight wagons will be seen operating in the Warwick area and provides for more local employment. WATCO will be using our yard and loco shed for routine loco maintenance purposes.

Queensland Rail update
SDSR committee and volunteers are very appreciative of QR for recent upgrades to their local infrastructure. The heritage sandstone station is now looking splendid after cleaning, re-pointing and painting. Also a huge amount of work has been done to the track bed on the Wallangarra line. The train now runs very smoothly on thousands of new hardwood sleepers and ballast.
SDSR Newsletter October 2018


Interesting about the trackwork on the Wallangarra line...

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