CSX Acquisition of Pan Am Railways

CN9634 wrote: ↑Thu Feb 18, 2021 8:55 pm I guess being moot in more way than one I can tell you everytime I went to the port and ask how the rail was coming along the answer was the same — “Pan Am is hard to work with”

I've had very similar conversations. As far as I can understand, the relationship between PAR and Eimskip has been frosty at best. There have been a few test moves over the years but PAR has always been the weak link in the chain.

Wall Street Journal reporting on the sale by Nestlé’ of the Poland Spring brand to a private equity concern. Bottled water, being dense and packaged with a mimimum of Tare, seems like an attractive lading for rail movement (not that high value, no environmental concerns if it "spills" - derailment). In short, good traffic that can be handled over an FRA Class 2 road:

https://www.wsj.com/articles/nestle-to- ... 874?page=1

Fair Use:

Nestlé SA agreed to sell most of its North American bottled-water brands, including Poland Spring, Arrowhead and Pure Life, for $4.3 billion, hoping to jump-start growth by focusing on a slimmed-down group of upscale and trendy brands.

The world’s largest bottled-water maker said the sale to private-equity firms One Rock Capital Partners LLC and Metropoulos & Co. would allow it to focus on premium brands Perrier, San Pellegrino and Acqua Panna..........Mainstream bottled water has faced fierce competition from store brands, making the category less attractive for Nestlé, which in recent years has sought to sharpen its focus on faster-growing, more lucrative products such as infant formula, coffee and plant-based foods...........Moreover, Nestlé and the rest of the industry—long criticized for bottling a drink readily available from the tap—are contending with mounting concerns about plastic waste. The company has pledged to address environmental concerns, saying it would halve its use of plastic derived from fossil fuels and make its water portfolio carbon neutral by 2025

Finally allow me to note earlier in the discussion, I referred to the Poland Spring brand being owned by Coca-Cola. Evidently, that was mistaken, and I ask the Forum to accept my advance apology.

Just as a point of reference, from what I can gather, Wilmington, NC is the smallest container port that CSX provides on dock or direct intermodal service to (though on a limited basis). It handles over 300,000 TEU's annually, has the capacity to handle 600,000 TEU's annually and has received 14,000 TEU vessels. I don't have the Portland figures handy but am guessing they would pale in comparison.

The word is a March filing now. Yep, believe it when we see it though.

roberttosh wrote: ↑Thu Feb 18, 2021 9:46 pm Just as a point of reference, from what I can gather, Wilmington, NC is the smallest container port that CSX provides on dock or direct intermodal service to (though on a limited basis). It handles over 300,000 TEU's annually, has the capacity to handle 600,000 TEU's annually and has received 14,000 TEU vessels. I don't have the Portland figures handy but am guessing they would pale in comparison.

You're right. Portland handled about 28,000 TEU in 2019, and the IMT couldn't handle ships larger than about 2,000 TEU(the biggest ship regularly calling at the IMT now is the Pictor which is about 930 TEU. Even if the IMT attracts another shipping line, it's likely going to be a short-sea feeder service or some other "niche" carrier. Theoretically the IMT would max out at around 50,000-60,000 TEU per year. There just isn't enough real estate there to handle too much more than that.

What I think is much more likely for Portland is that refer ships on the USWC-Europe trade may start calling in Portland once the cold storage facility is up and running. Right many ships on that trade call in Bayside, NB to unload fish and seafood bound for points on the east coast. Portland could easily take that traffic....too bad the cold storage facility is being built without direct rail access.

Although I stick to my argument that Portland "punches above it's weight" as a Port since it's the best US marine gateway to the Arctic, and that a lot of the rail movements currently going on CN from Halifax could easily go through Portland, rail service from yard 8 is difficult to make work unless it's tacking onto an existing intermodal lane.

Assuming CSX swallows PAR whole, how much will the STB require them to divest?

As for the Nestle divestment of their US bottled water division, that is yuge. Will Poland Spring move forward with rail initiatives or just go status quo and "milk" the water. Nestle sold their US candy operations, now water, what is left?

When I visited Miami a couple years ago in the summer, you had to drink water constantly, and everybody had spring water or filtered water and it was almost all Nestle brands!

newpylong wrote: ↑Thu Feb 18, 2021 9:55 pm The word is a March filing now. Yep, believe it when we see it though.

2021?

Cosakita18 wrote: ↑Thu Feb 18, 2021 10:22 pm Although I stick to my argument that Portland "punches above it's weight" as a Port since it's the best US marine gateway to the Arctic, and that a lot of the rail movements currently going on CN from Halifax could easily go through Portland, rail service from yard 8 is difficult to make work unless it's tacking onto an existing intermodal lane.

A Portland block quite easily could be set off and picked up in Rigby by a theoretical Waterville to Ayer (and beyond) service. However I think the detriment to a lot of tonnage is the size of the yard - I think only 15 lifts per track. Not sure if the picker can reach track 2. Then again, others are more familiar with IM service than I.

BandA wrote: ↑Fri Feb 19, 2021 5:47 am Assuming CSX swallows PAR whole, how much will the STB require them to divest?

I would assume none. The trackage that most arguably (by NS) goes against competition is the core mainline in District 2. Without that, there isn't really a point to the sale. The other tentacles are fairly meaningless in this respect.

Cosakita18 wrote: ↑Thu Feb 18, 2021 9:23 pm

CN9634 wrote: ↑Thu Feb 18, 2021 8:55 pm I guess being moot in more way than one I can tell you everytime I went to the port and ask how the rail was coming along the answer was the same — “Pan Am is hard to work with”

I've had very similar conversations. As far as I can understand, the relationship between PAR and Eimskip has been frosty at best. There have been a few test moves over the years but PAR has always been the weak link in the chain.

You only hear one side of the story. I know that the people involved with the intermodal prospects at both Eimskip and Pan Am used to work at the same steamship line together. There is no animosity there.

Does anyone really believe that the CSX Intermodal folks are going to visit the Port of Portland and walk away all enthusiastic and excited about the prospects of developing a new Intermodal service to that location?

You all have to remember that Eimskip calls Halifax for a reason... cooperative agreement in place with CMA, also looking at COSCO and ONE, they can feed into Portland via the Halifax connections basically anywhere in the world now. No need for rail at Portland either with CN providing a full coast-to-coast network. The only thing CSX might provide them would be some kind of north-south access, but I think thats unlikely.

Also, its highly unlikely CSX would want to use IMT for a domestic terminal. When you place an intermodal facility somewhere you want to 1.) maximize the service area (drawa 150 mile bubble around it), 2.) maximize the efficiency (good highway connection, minimal surface work/road/truck impace) and 3.) not cannibalize your other terminals. Portland misses the mark on all three-- half the service area is the ocean, theres already too much truck traffic on Commercial St (Eimskip probably would want to protect what's there for their own growth) and 3.) its too close to Worcester.

That means Waterville is a much more likely candidate because its basically shovel ready with plenty of land and access. I'd argue the best place for an intermodal terminal remains Auburn/Lewiston area given its intersections of primary rotes and highways, but CSX would need to greenfield for that or find a way to access the City of Auburn terminal cost effectively (not outside the realm of possible, but a challenge for sure).

Well said, the only reason that CN does any business with Eimskip at Halifax is because they already have a bunch of other line's base business there at what is a major port facility so it's a simple add on. Eimskip is never going to generate enough business going through Portland to warrant an independent Intermodal lane/operation.

CN9634 wrote: ↑Fri Feb 19, 2021 1:42 pm The only thing CSX might provide them would be some kind of north-south access, but I think thats unlikely.

Access to the NY and mid-Atlantic market is something Eimskip does want though...They do also still have a warehouse and freight forwarding office in Norfolk. But like I said I think the only way intermodal from yard-8 makes sense is if it's "tacking on" to an existing intermodal lane...and then only for ship-rail transfers.

I wonder if CSX could gain access to the currently disused SLR ramp in Auburn...seems a lot easier than trying to build a facility from scratch.