Is Lincoln currently a particular problem for container traffic? Would the avoiding line have been in any way suitable for container traffic?
Goods trains have always been a problem for Lincoln - and indeed vice versa. Long before the Joint Line was built, the original "Loop" or Fen line between Retford and Peterborough via Lincoln and Boston was intended to carry freight traffic, leaving the shorter but more steeply graded "Towns" line via Grantham for passenger services. Even in the 19th century the short distance between the level crossings in the city centre set a maximum length for goods trains, and rendered nugatory Sturrock's "steam tenders" (an early form of articulation, by providing the tender with a set of cylinders and motion to double the tractive effort of a locomotive without an extra crew) - it has to be said the idea was not popular with firemen!
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There is no reason it would have been any less suitable for container traffic than any other part of the Joint Line. It was built for heavy freight, as part of the Joint Line, and ran to the south of what was then the built up area, with no level crossings. As recently as the early 70s it still carried a lot of freight - in the early 70s I spent a lot of weekday evenings near the bridge that carried it over the Newark line, watching for exotica from as far afield as Stratford and Longsight depots.