Pan Am Southern / Patriot Corridor Discussion

South End of D&H I can see. North End is just too damn redundant with NECR. And they're too far along dumping money into NECR. Vermonter, St. Albans-E. Swanton, Connecticut...all that money's been spent, all that work is either underway, committed and about to commence, or wrapping up. That's a lot of waste to buy a duplicate Canadian gateway that itself needs a ton of work.

Looking at their system map they don't even have a reporting mark that direct-connects with D&H. Wellsboro & Corning interchanges with CP through trackage rights, and I think Quebec Gatineau does too (though I don't know if by D&H). Otherwise they're wholly dependent on NS and CSX to traverse New York State between their Great Lakes Region marks and their New England marks. And SLR/SLQ doesn't interchange with CP at all, just CN. If they buy there's got to be follow-up moves. Or maybe a "D&HPAS" partnership. NS just has too much leverage over their probable traffic here.

North End not being sold.

I agree, I have been trying to think of why this would make sense for them and I haven't been able to come up with anything.

I know we've have veered OT but wrt G&W as a candidate to buy the southern end of the D&H, two things:

1. NS obviously knows the south end of the D&H property intimately having supplied this portion of the RR with the vast majority of its traffic (plus crews and locomotives) over the past several years. NS officials and track inspection equipment have ridden over the line recently. What does G&W know about the D&H? They apparently have no significant business interdependency with the D&H. And I've not read on any CP or D&H forum that G&W personnel have been seen to be on the property in a hi-rail truck or inspection train.

2. PAS, presumably with NS knowledge and support(?), is taking the G&W's NECR to the STB over a dispute re: NECR's onerous operating conditions placed on PAS trackage rights freights on the Conn River line (ie, 25mph max speed and waybill presentation to NECR). So there might be a little bad blood between NS and G&W that might give NS pause re: continuing to nurture PAS business if G&W were the middleman instead of CP.

Maybe a G&W rumor is being used as a stalking horse to prod NS to close a deal.

Is the PAR forum always so pessimistic? I thought PAR was turning around. Also, when PAR purchased the D&H before, was it in better shape back then? Or about the same? Since no one has floated the idea of a PAS purchase at all. Everyone seems to think NS is souring on PAS, but if so, why did they continue investing in PAS, and if they have a 50% stake, then why don't they initiate some change?

Maybe I should just take all this pessimism with a grain of salt?

BostonUrbEx wrote:Is the PAR forum always so pessimistic?

You're not from around here, are you?

I think the G&W rumor is just that... and prior to this announcement of the D&H sale, I've heard of NS making some moves to take over the southern part of the line... so I'm going to go with that.

BostonUrbEx wrote:Is the PAR forum always so pessimistic? I thought PAR was turning around. Also, when PAR purchased the D&H before, was it in better shape back then? Or about the same? Since no one has floated the idea of a PAS purchase at all. Everyone seems to think NS is souring on PAS, but if so, why did they continue investing in PAS, and if they have a 50% stake, then why don't they initiate some change?

Maybe I should just take all this pessimism with a grain of salt?

D&H was in a free-fall when Guilford bought it 30 years ago. And then Guilford pretty much accelerated that free-fall to terminal velocity with labor strife. Strikes and a court ruling against Guilford, and they dumped it 4 years later with D&H immediately filing bankruptcy. Courts placed it under a caretaker operator (NYSW) for couple years until CP bought it in '90 and rehabilitated. So...yeah, total ruination in less than 4 years is pretty high-achievement mismanagement.


PAR's starting to stagnate in its turnaround. Less a reversal than just being very uneven of late. The old problems with staff and power shortages are returning, deliveries not being made, problems with the physical plant (like this summer's Downeaster slow zones) are returning. They're straining to keep up with the demands PAS is putting on the system, and NS isn't real happy about that. The recent devastating series of blows with mill closures in Maine is throwing north-of-Portland into chaos and seriously threatening the viability of traffic in ex-MEC territory. While at the same time they are closing big deals like Sea-3 in Portsmouth and seeing some new business in Eastern MA and in PAS territory.

They've proven they can chase new business and land big partners. Now the question is do they have the horses and internal discipline to actually serve it? That's where they're staggering around right now. And the Northern Maine situation is bad...bad bad bad. It erodes enough of their margins that ability to cope with new opportunities to the south and keep up with NS's demands on PAS gets a lot harder. And that's where a fed up NS is a real concern. They can trigger some non-performance clauses in the agreement that lets them take over ops on the Patriot Corridor, Conn River, and in Connecticut and basically relegate PAR to spectator whose goods get moved by giving someone else the keys. That's beneficial in the short-term for letting them cope with the rest of the system they can't find the wherewithal to keep running. But it's bad because then Northern Maine really really looms large, and their value as a company goes way down. If NS simply loses interest altogether and pays to get out of PAS...that's the doomsday scenario. They lose a ton of traffic, all their growth momentum, go into a free-fall, and probably don't survive it.


So...it's complicated. They have a lot of opportunity and some encouraging results Portland-south, but a scary situation Portland-north. Progress made on new customers, but they're starting to choke on the challenge of serving those customers and not reforming themselves fast enough to cope. And a Class I partner that sees lots of upside in the region, but little upside in the partnership. It's a dysfunctional house up in Billerica. It's always been a dysfunctional house up in Billerica. This is maybe somewhat different kind of dysfunction than the Guilford days, but it's still dysfunction that chases away opportunities and routinely shoots holes in their feet. They've not answered the question--still--about whether they are ready for the bigtime.

It will be a slow weekend on the east end of PAS - good opportunity to get roster photos of engines on parked trains:

http://www.nscorp.com/content/nscorp/en ... yerma.html

"We have been advised that the MBTA will be doing a track work project that will affect train operations on the PanAm RR West of Ayer, MA beginning at 2:00am Saturday October 4th through 9:00pm Sunday October 5th. Customer freight on the following trains operating between Chicago/Toledo and Ayer will be delayed as noted below:

22K-02 (Chicago to Ayer) - 48 hour delay; Loads should be available by 5:00am Monday October 6th.

206-02 (Toledo to Ayer) - 48 hour delay; Loads should be available by 5:00am Monday October 6th.

22K-03 (Chicago to Ayer) - 36 hour delay; Loads should be available by 5:00pm Monday October 6th.

206-03 (Toledo to Ayer) - 36 hour delay; Loads should be available by 5:00pm Monday October 6th.

22K-04 (Chicago to Ayer) - 24 hour delay; Loads should be available by 5:00am Tuesday October 7th.

206-04 (Toledo to Ayer) - 24 hour delay; Loads should be available by 5:00am Tuesday October 7th.

22K-05 (Chicago to Ayer) - 12 hour delay; Loads should be available by 5:00pm Tuesday October 7th.

206-05 (Toledo to Ayer) - 12 hour delay; Loads should be available by 5:00pm Tuesday October 7th.

23K-05 (Ayer to Chicago) – train scheduled to depart Saturday morning will be annulled.

23K-06 (Ayer to Chicago) – 12 hour delay; will depart Ayer Sunday evening October 5th.

23K-07 (Ayer to Chicago) – 8 hour delay; will depart Ayer Monday afternoon October 6th.

We regret the late notice and any inconvenience this may cause our customers."

Things should heat up starting Sunday night, though!

BostonUrbEx wrote:Is the PAR forum always so pessimistic? I thought PAR was turning around. Also, when PAR purchased the D&H before, was it in better shape back then? Or about the same? Since no one has floated the idea of a PAS purchase at all. Everyone seems to think NS is souring on PAS, but if so, why did they continue investing in PAS, and if they have a 50% stake, then why don't they initiate some change?

Maybe I should just take all this pessimism with a grain of salt?

Take it with a grain of salt. A lot of people who have been around for a long here. We are all passionate about the B&M and MEC but this forum has more realism I think than others. You're going to hear the good and the bad.

I couldn't have written a better summary of affairs than F-Lines post.

NS is not going to let their investment go up here now. They have been here in one way shape or another since not too long after the Conrail split, so well over 10 years. They made commitments to their customers, e.g. all of the intermodal and auto business they drummed up, so why leave now? The line is arguably in better shape than after the Conrail split but before PAS started in 2009. All NS needs to do is hold on and just keep doing what they have been doing and that is keep the trains moving, doing the summertime track repairs here and there and hold on until Pan Am says they are done. To NS, this is not a bad deal, ST does all of the work for them, then they take it west from Mechanicville. NS will work on getting control of the D&H first, then work east from there.

Looking at the Norfolk Southern route map . . . how can it not be them?

F-line to Dudley via Park wrote: So...it's complicated. They have a lot of opportunity and some encouraging results Portland-south, but a scary situation Portland-north. Progress made on new customers, but they're starting to choke on the challenge of serving those customers and not reforming themselves fast enough to cope. And a Class I partner that sees lots of upside in the region, but little upside in the partnership. It's a dysfunctional house up in Billerica. It's always been a dysfunctional house up in Billerica. This is maybe somewhat different kind of dysfunction than the Guilford days, but it's still dysfunction that chases away opportunities and routinely shoots holes in their feet. They've not answered the question--still--about whether they are ready for the bigtime.

F-line, I think that is the most coherent, fair, and realistic assessment of PAR that I've read in a LONG time. Well said.

F-line to Dudley via Park wrote:South End of D&H I can see. North End is just too damn redundant with NECR. And they're too far along dumping money into NECR. Vermonter, St. Albans-E. Swanton, Connecticut...all that money's been spent, all that work is either underway, committed and about to commence, or wrapping up. That's a lot of waste to buy a duplicate Canadian gateway that itself needs a ton of work.

Looking at their system map they don't even have a reporting mark that direct-connects with D&H. Wellsboro & Corning interchanges with CP through trackage rights, and I think Quebec Gatineau does too (though I don't know if by D&H). Otherwise they're wholly dependent on NS and CSX to traverse New York State between their Great Lakes Region marks and their New England marks. And SLR/SLQ doesn't interchange with CP at all, just CN. If they buy there's got to be follow-up moves. Or maybe a "D&HPAS" partnership. NS just has too much leverage over their probable traffic here.

Keep in mind its not the G&W pumping money into the NECR, it has been the government all along with TIGER grants and such, for rerouting the Vermonter and the "Knowledge corridor". I have heard that the NECR is not doing that well under G&W rule. witness the fighting with PAS/VRS over trackage rights. If the G&W were to get the D&H (which I doubt its them, I would go with NS) then maybe they would unload the NECR to VRS or another carrier. Just my thoughts

Mike Scholz

RBMN and NYS&W names thrown into the mix recently.

newpylong wrote:RBMN and NYS&W names thrown into the mix recently.

NYSW makes some degree of sense since they were the bankruptcy court-appointed caretaker operator for D&H when Guilford vomited them back up in 1988. Although weren't they owned in a 40%/40% stock split between NS and CSX when they last got bought 15 years ago? That sort of points the arrow right back at NS.

Can't imagine either of these roads has the independent cash to compete with any native-NS or G&W bid.