OmniTRAX posts abandonment of central Texas short line
August 20th, 2019
August 20, 2019 - TRA Newswire -
Traffic has dwindled on the Central Texas & Colorado River Railway line so short line operator OmniTRAX has called it quits. The 68 mile long line operated from the central Texas town of Lometa, Texas where it connects with BNSF's Lampasas subdivision to Brady, where the line terminates.
OminTRAX cited operating loses in the millions as crushed rock traffic it was expecting never materialized. Frac sand, which was another prime commodity carried on the line, bottomed out.
The Surface Transportation Board (STB) reported that in July the line was embargoes because of unsafe track and bridge conditions. OmniTRAX said repairs would cost over $2 million. The company had already invested over $2 million into the short line with little chance of payback.
According to the STB filing OmniTRAX said "the traffic base weighed heavily toward lower-margin minerals traffic (particularly sand) and agricultural materials, but CTXR reasonably believed that the on-line customers would provide a consistent revenue baseline from which to grow the railroad to profitability.”
Under 600 carloads were expected on the line this year, down from the expected 8-10 thousand loads from rock crushing enterprises that never materialized. Chief Commercial Officer Peter Touesnard said in the STB brief "the collapse of the crushed rock traffic opportunity was, by itself, enough to doom CTXR.”
OminTRAX noted in the STB filing: “despite CTXR's good faith efforts to work with existing and potential customers to generate sufficient operating revenues to keep the line in service, and despite CTXR's sizeable capital investments, hoped-for traffic increases, which had motivated the purchase of the line, have not materialized. Worse, a substantial on-line customer plans soon to cease operations, and the largest customer by revenue carloads recently sold its Brady-area facility to a new operator that projects to move roughly 20% of the traffic volumes of its predecessor. Collectively, all of these developments will only contribute to CTXR's already-unprofitable operation.”
Predecessor Heart of Texas Railroad was organized in 2012 and acquired the 67.5-mile line from the bankrupt Gulf, Colorado and San Saba Railway in 2013. OminTRAX took operational control in 2016. The short line has had plenty of bad luck. In 2013, a 300-yard-long trestle carrying the tracks over the Colorado River burned and collapsed. The loss was estimated at $10 million. At a cost of $4 million the bridge was rebuilt and opened in 2014.
Omni-Trax operates the Panhandle Northern Railroad and the Brownsville and Rio Grande International Railway in Texas. The company also operates the Sands Spring Railway near Tulsa, Oklahoma.
Traffic has dwindled on the Central Texas & Colorado River Railway line so short line operator OmniTRAX has called it quits. The 68 mile long line operated from the central Texas town of Lometa, Texas where it connects with BNSF's Lampasas subdivision to Brady, where the line terminates.
OminTRAX cited operating loses in the millions as crushed rock traffic it was expecting never materialized. Frac sand, which was another prime commodity carried on the line, bottomed out.
The Surface Transportation Board (STB) reported that in July the line was embargoes because of unsafe track and bridge conditions. OmniTRAX said repairs would cost over $2 million. The company had already invested over $2 million into the short line with little chance of payback.
According to the STB filing OmniTRAX said "the traffic base weighed heavily toward lower-margin minerals traffic (particularly sand) and agricultural materials, but CTXR reasonably believed that the on-line customers would provide a consistent revenue baseline from which to grow the railroad to profitability.”
Under 600 carloads were expected on the line this year, down from the expected 8-10 thousand loads from rock crushing enterprises that never materialized. Chief Commercial Officer Peter Touesnard said in the STB brief "the collapse of the crushed rock traffic opportunity was, by itself, enough to doom CTXR.”
OminTRAX noted in the STB filing: “despite CTXR's good faith efforts to work with existing and potential customers to generate sufficient operating revenues to keep the line in service, and despite CTXR's sizeable capital investments, hoped-for traffic increases, which had motivated the purchase of the line, have not materialized. Worse, a substantial on-line customer plans soon to cease operations, and the largest customer by revenue carloads recently sold its Brady-area facility to a new operator that projects to move roughly 20% of the traffic volumes of its predecessor. Collectively, all of these developments will only contribute to CTXR's already-unprofitable operation.”
Predecessor Heart of Texas Railroad was organized in 2012 and acquired the 67.5-mile line from the bankrupt Gulf, Colorado and San Saba Railway in 2013. OminTRAX took operational control in 2016. The short line has had plenty of bad luck. In 2013, a 300-yard-long trestle carrying the tracks over the Colorado River burned and collapsed. The loss was estimated at $10 million. At a cost of $4 million the bridge was rebuilt and opened in 2014.
Omni-Trax operates the Panhandle Northern Railroad and the Brownsville and Rio Grande International Railway in Texas. The company also operates the Sands Spring Railway near Tulsa, Oklahoma.