News & Reviews News Wire OmniTRAX gives up on Texas short line, files for abandonment NEWSWIRE

OmniTRAX gives up on Texas short line, files for abandonment NEWSWIRE

By Bill Stephens | August 15, 2019

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WASHINGTON — Short line operator OmniTRAX is throwing in the towel on its Central Texas & Colorado River Railway.

OmniTRAX this week filed to abandon the 67.5-mile line, citing its dim prospects and millions of dollars in operating losses since it acquired the route in 2016.

The prime culprits: New crushed rock traffic that never materialized as expected and rapidly declining shipments of frac sand.

The entire route was placed under embargo on July 25 due to bridge problems and unsafe track conditions that would require $2.3 million in repairs, OmniTRAX said in its filing with the Surface Transportation Board. The line has more than one bridge per mile.

OmniTRAX spent $2 million to improve the Central Texas & Colorado River trackage after acquiring it from the Heart of Texas Railroad.

“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,” the railroad’s filing says.

A proposed rock-crushing facility was expected to generate 8,000 to 10,000 loads annually. But the facility never opened as planned in 2017 and is unlikely to ever be developed.
“The collapse of the crushed rock traffic opportunity was, by itself, enough to doom CTXR,” OmniTRAX Chief Commercial Officer Peter Touesnard wrote to the board.
CTXR’s frac sand volumes have declined considerably as oil and gas drillers rely on new sand mines closer to their operations in western Texas.

The railroad expected to haul just 553 carloads in total this year, down from 1,210 in 2018.

“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,” OmniTRAX said in its filing. “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.”

The route, which connects with BNSF Railway’s Lampasas Subdivision at Lometa, Texas, some 85 miles northwest of Austin, was built in 1910-11 by Santa Fe subsidiary Gulf, Colorado & Santa Fe Railway.

5 thoughts on “OmniTRAX gives up on Texas short line, files for abandonment NEWSWIRE

  1. Update on the railroad as of February 2021. The original signage of the Gulf Coast and San Saba railroad are all still there at the main yard in Brady on the original building, The historic depot across the street from it is almost abandoned, it has been for sale for a little while now, all rail is still there, and all cars at the Jacoby’s Feed and mill are still there, they have a damaged track mobile, and another one in their yard. All cars appear to still have original markings from leasing railroads, but those leasing companies will never get the cars back it seems. In San Saba, there is an abandoned (ITGX) hopper that’s been there since 2017 I believe. But the tracks are sniped by a crossing just northeastern of San Saba. At the connection point with Lometa between the shoreline and BNSF, the tracks are loaded with brand new AOKX Covered Hoppers straight in storage from economic delay from the pandemic. They go a couple miles down getting close to the snipped track portion. Most trestles still stand pretty well, Never got to check all of them, but the tracks are very well hidden in weeds as they were when they were in service. BNSF uses the yard tracks in Lometa now to store MOW tie hoppers and Herzog Ballast hoppers. All original company buildings either went abandoned from loss of the railroad, sold off to new companies, or were torn down. The yard full of cars at the Jacoby’s feed and grain are pretty interesting as they are fairly old cars. I’d say about 30-40 cars are there landlocked. The ITGX hopper in San Saba appears clean and fine looking, but will most likely as well remain stranded.

    1. *edit
      Not all buildings from there were abandoned, changed ownership, or torn down, but the tracks still run through them and those portions of factory to train are abandoned. almost looks like they’re stuck in time

  2. The state of Texas better step in and take control of this line for future use before Omnitrax rips it up like they’re so fond of doing

  3. @Steve German: I believe the customer had to have a haulage agreement in place with OMNITrax before they could get their financing. They finally got their financing, but the market demand has slumped by 80% in the interim. So they looked to OMNITrax to fulfill the haulage and they can’t because the volume won’t cover their costs.

    While people rip corporate thinking and it is well deserved many times, I would like to believe that OMNITrax ordered those hoppers from Greenbrier Finance (AOKX) with the correct lead times involved based on what the customer’s original start date was going to be.

    Since the hoppers and engines were leased, they will probably be returned to the lease agents now.

    In this case I think OMNITrax was being responsive to the customers needs and the customer just couldn’t get it going quick enough and the rail operator (CT&CR) was left holding the bag.

    Best guess is that the State of Texas will railbank the line for some need in the future.

  4. Well, they shouldn’t have ordered 100 brand new Ortner Hoppers for a customer that wasn’t online yet even close to completion of the site. Those cars have been sitting on various sidings and tracks for over 2 years AOKX reporting Mark’s. They also ordered 2 more GP38-2’s from GATX which have been sitting down in Brady unused for over 6 months. Love corporate thinking.

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