CSX Acquisition of Pan Am Railways

Not so sure that anyone would be able to "easily" double the business on the MEC without some major inroads with someone like Irving and even that would be a stretch. Pan Am is doing pretty well right now in terms of market share with the mills with probably the biggest potential growth are being inbound fibre.

I think you would be surprised what higher velocity, reduced dwell time and better rates would accomplish as far as tonnage increases. Mills (and yes they are past owners) gave been quoted that they "would love to double the product being moved by rail if the railroad could move it."

Imagine a customer being able to get a car within 48 hrs of hitting the system instead of triple that. Rail becomes much more persuasive.

I'm not saying that there isn't room for improvement, there always is, but as things stand right now, Pan Am has a pretty high marketshare at the mills so you could have 24 hour service from mill to customer and it still won't double the business because there's just not that much more traffic to be had. I'm obviously talking about the mills that they serve directly and sure they could probably do more out of places like Twin Rivers at Madawaska or Irving at SJ with increased velocity, but I still don't see that doubling their business.

As far as those JB Hunt, Schneider, and UMAX containers on I-95 heading to and from Maine...

2 of those 3 approached Pan Am and NS a couple years ago about re-establishing service from the Midwest to Waterville. Pan Am was all for it. NS wasn't interested. It's been discussed on this forum before. It's why the Poland Spring train to NJ took a route via CSX instead. The Dark Horse could care less.

As for the claim about the mills doubling traffic if there were better rates and service...
That's the BS they always claim. New England is still a cheap outbound market for trucks. So no matter how cheap Pan Am or any other railroad lowers rates in Maine, there is always some trucking company who will do it cheaper just to keep from losing their backhaul.

I'm curious why if Pan Am wanted to handle containers to/ from Waterville for two of the three of JBHU, UMAX, or Schneider IM firms it didn't work something out with CSX to Worcester/Dewitt? Might have gotten shorter transit times west of Pan Am than with 22K/23K.

There are probably restrictions in the Pan Am Southern agreement about running intermodal to the Midwest from Ayer and Waterville. It would protect the NS and their part of the investment. The NJ lane for the water was not part of the restrictions. When trucking capacity grew and rates collapsed again out of New England in 2019, it killed the intermodal move from Waterville to northern New Jersey.

The main reason the Horse did not want to do it is that there is no traffic inbound going that far north into Maine. The Walmart DC is Lewiston-Auburn is pretty much the largest inbound destination for 53' domestic intermodal boxes. It is easier to just dray from Ayer or Worcester rather than dray back down from Waterville. The Horse prefers to run their intermodal trains as close to 100% capacity in both directions.

CN9634 wrote: ↑Tue Aug 25, 2020 9:05 pm The Pan Am CRISI grant details just were published in ANR&P (perhaps my criticism was heard, it was a very thorough and well constructed piece) so if you can go check it out. Abridged version is they are looking for $21M grant match to their own $21M (their contribute is ~$8M in cash and the rest 'labor and stuff') to rebuild from Waterville to Keag, dubbed the 'Pine Tree Corridor'. Project completion date is 2023.

The project basically installs 37 mile of relay 115# CWR, 40 new turnouts, crossings, bridges, ties, ect, gets them the whole 110 miles from Waterville to Keag up to 25MPH and 286K.

I can't access ANR&P. Does this grant proposal happen to show the need or mention a reason for the project such as the expected increase of traffic due to the expansion of the Port of Saint John? How are they making a case for the "Pinetree Corridor".

$42 million seems a bit short changed to get all of Waterville-keag to sustained class 2 speeds. Most of the line east of NMJ is basically excepted track and the roadbed is shot.

HarmonicRock wrote: ↑Wed Aug 26, 2020 11:32 am Or, the fact it may not sell at all.

I'll 2nd this notion.

PBMcGinnis wrote: ↑Thu Aug 27, 2020 7:42 am There are probably restrictions in the Pan Am Southern agreement about running intermodal to the Midwest from Ayer and Waterville. It would protect the NS and their part of the investment. The NJ lane for the water was not part of the restrictions. When trucking capacity grew and rates collapsed again out of New England in 2019, it killed the intermodal move from Waterville to northern New Jersey.

The main reason the Horse did not want to do it is that there is no traffic inbound going that far north into Maine. The Walmart DC is Lewiston-Auburn is pretty much the largest inbound destination for 53' domestic intermodal boxes. It is easier to just dray from Ayer or Worcester rather than dray back down from Waterville. The Horse prefers to run their intermodal trains as close to 100% capacity in both directions.

That doesn’t make a lot of sense considering the volumes and services are driven by the IMCs, with the only real RR boxes being the EMP pool that they work with 3PLs and brokers. Also the Johnny B boys told me they’ve been pushing for Waterville to no avail, remember they could route both NS and CSX, the weak link I was told was PAR. The opportunity isn’t just to route existing 53’ inbound boxes (there is a decent bit by the way) but highway to rail conversions. Walmart is one of the biggest opportunities for sure but Hannaford, Shaw’s, and other retailers have DCs as well.

I asked NS about the inbound to outbound ratio too, it’s not 100% as you mention, they repo a lot of empties west out of New England (probably their EMP box pool, not sure about Hunt). But they do have a very hands off approach in the PAS marketplace “it just goes” in their mind. Albany was the real breadwinner for them to compete with CSX

Hate to disappoint you CN9634 but you have been lied to about PAR being the weak link.
I know several players who were "at the table" when the talks went on with the 2 large IMC Retailers.

As someone who has done some hauling for JB,they would love to get Waterville.Drivers could do more drops per day instead of one or two turns a day out of Ayer or Wocester.

Gilbert B Norman wrote: ↑Wed Aug 26, 2020 1:43 pm

CN9634 wrote: ↑Tue Aug 25, 2020 9:05 pm This thread has certainly taken on legs of its own with some wild (underscore on that) speculation. Lets all take a step back and breath some air.

Mr. 9634, I appreciate participating at this topic because it appears to be populated by members "who do, or have done this stuff for a living". The loonie railfans with "Gee. can't they bring back the 'State of Maine', 'Bar Harbor', and the 'Atlantic Limited'" have kept those thoughts to themselves.

I think the "State ah Maine, Eyup" "Bah Hahbaa" or "Atlantic Limited" are quite feasible about 2065. Before then we will see Inland Regionals, Montreal, and more automation i think.

PBMcGinnis wrote: ↑Thu Aug 27, 2020 1:26 pm Hate to disappoint you CN9634 but you have been lied to about PAR being the weak link.
I know several players who were "at the table" when the talks went on with the 2 large IMC Retailers.

Not disappointed that's just the story that was told to me first hand so maybe Pan Am is the scapegoat in the mess -- still use Hunt and they're a great carrier to work with regardless. The real disappointment should be for all the shippers who really are stuck with a only a real CSX option but a subpar NS/Ayer option (IE unbalance competition).

The volume is almost like 3 to 1 or more CSX to NS for intermodal into New England, including solid footing with parcel guys. Not sure the last time you were at the ramp in Ayer but its basically a mud pit with a very embarrassing setup. There are no plans to either expand, modernize or relocate it either so really a sad state of affairs down there.

Pan Am don't seem to have a clear strategy for Waterville or any seat at any table with their 'partners' but again that is one side of the story as I've been told. To be honest the best thing would be for someone line Schneider to come up, they have a dedicated regional fleet that touches Maine everyday with a solid book of business. I've asked about Waterville too but largely get some excuses on why it can't be used for my moves (Ill leave it at that).

I'm not surprised that Pan Am was getting blamed but also consider the possibility that they are being scape goated to be very real. I've dealt with Pan Am in several different roles now (potential shipper, non-profit/advocacy and government) and I've never found them to be the issue. They have their ups and downs like any organization but I have seen much worse from others in that arena.

Sent from my Pixel 2 XL using Tapatalk