CSX Acquisition of Pan Am Railways

Come now; does someone "down there" really have visions of having Searsport become a Southwest Harbor, Damariscotta, Rockland, or any "hole" the Fairfield Navy likes to visit?

Failing that, I think it is "win win" to grant Chessie access to Searsport (and after reviewing the discussion of the past day, to fix the track).

Six-axle locos typically have less weight per axle than four-axle locos. If six packs are prohibited from the Searsport Branch, it might be related to track curvature, which would be a much harder nut to crack than simply installing new rails and ties.

Having said that, CP appears to have a pretty good sized fleet of four-axle road switchers, mostly GP38-2s and GP20ECOs, which are well suited for this kind of service. If they need more than they currently have, the worst case scenario is that they lease some GP38-2s/GP40-2s from GATX or LTEX or they buy some Dash 8-40Bs from GE (who's practically giving them away at this point).

Mr Norman, I’m curious, so what types of products do you envision CSX wanting to handle through Searsport?

Gilbert B Norman wrote: ↑Sat Dec 11, 2021 8:30 am Come now; does someone "down there" really have visions of having Searsport become a Southwest Harbor, Damariscotta, Rockland, or any "hole" the Fairfield Navy likes to visit?

Failing that, I think it is "win win" to grant Chessie access to Searsport (and after reviewing the discussion of the past day, to fix the track).

I guess I'm lost here... how is CSX getting access to Searsport? It's not part of this transaction, and probably never will be part of anything. How did we even arrive at this fantasy?

In my past life dealing with (dry goods forest products) Spliethoff, G2 and Wagonborg, they all had no problem going under hook at Portland or Searsport with railed in or out loads. A lot of times they get a partial load out of somewhere else, and have capacity for another 2, 3 or 4 thousand tons all headed the same place. UPM uses Spliethoff considerably, so back when they had their mill running I'm sure they either pulp'd in or paper'd out some loads via Merrills. It's not as busy as it once was, but the break bulk business is no strange to Portland via Rail. The warehousing was the important aspect, but Pan Am and BAR/CDAC/MMA/CMQ all had boxcar fleets that they would stretch the demurrage on if they were happy to let boxcars sit out in yards a few days. I scheduled a few SIT cars with Pan Am early on and everyone laughed at me, said just send it it'll all arrive the same time anyways.

CN9634 wrote: ↑Fri Dec 10, 2021 1:43 pm Lastly, I heard a rumor that I don't want to let any cats out of bags for... but if its true we'll know this month and it would be a major change in the transaction as we know it. Would be a refiling done of the application and could mitigate any 'competitive concerns'.

Could you elaborate on what this means. There are competitive concerns with the CSX-Systems merger east of Ayer. CSX will control the lion's share of the New England freight rail business with the B&A, the eastern end of the B&M and the MEC as there is only one main line to the State of Maine from the rest of the U.S. The other lines, e.g. NECR, PAS, & SLR will have what is left.

Relative to the known facts of this transaction in the STB docket I haven’t seen anything citing competitive concerns outside of PAS… but I would be happy to be corrected since there are thousands of pages of documents so any oversight would certainly be possible.

GTIKING wrote:Has anyone been paying attention to PARs Hy-Rail trucks. I haven't looked into it however I've been told the Systems logo has been removed from them as of late.

Some of the new trucks have yet to get the logos applied. I have noticed more F-350's with tool beds as of late, compared to the 2010 era Chevy 2500 and 3500's Pan Am has used for the past 5 or 6 years. I know some of those trucks are in rough shape, and it appears the logos on the doors have faded off, since you can still see the sticker minus the lettering.

Gilbert B Norman wrote: ↑Fri Dec 10, 2021 8:53 am Are we overlooking Searsport?

Is that becoming a "niche" as well?

I wouldn't completely rule out Chessie accessing such. No question whatever, maritime companies prefer ports with two roads. Could that double Searsport's traffic? That would be a win-win for everyone:

1) Good paying UNION jobs in Maine.
2) No X-border Customs concerns.
3) Better line haul for Chessie than, say, Portland.
4) Cut out the Irving road and that the originating road always gets a disproportionate "chunk" of the interline. Division.

Nuff said?

Whatever is currently at Searsport, is the same traffic you would see if CSX somehow got the branch. The port is basically dead in the water when it comes to expansions. The town of Searsport has pushed back against virtually every attempt to develop the port. The LPG terminal, IM terminal at Sears Island, the dredging of the harbor, and the list goes on. The former port at Cape Jellison is all condos now, which have a view of the harbor. And I am sure it keeps the out of staters up at night, just thinking of the port. The scrap metal facility which was moved from Portsmouth a few years back, even had push back against it. Last I knew they have to do constant air and water testing around that site to appease the NIMBY's. The only way I can see Searsport getting busier is if trace amounts of Mercury or other chemicals from Holtrachem or GAC are found in the harbor. That would be about the only way you would ever see the port dredged. Which GAC is the reason why they don't want to dredge it in the first place. Prior to harsher EPA standards waste was dumped from the old plant into the harbor, so under that sediment is some nasty stuff. As for the advertising by CP, the way I see it, is CP just did it to get STB approval for the purchase of CMQ. I imagine if in the STB documents they alluded to the fact that they really only wanted the Moosehead (which is what it looks like), there would have been more push back from customers. And even if CP were to dump the Bangor Sub, it would likely end up as the next NBSR subsidiary, since industries at Searsport support a number of JDI business.

The fact of the matter is that CSX doesn't originate or terminate any potential import/export business anywhere near Searsport, which will be a distant outpost for them if the deal goes through. They can handle anything they need to at existing port terminals up and down the East and Gulf coasts, from Albany to New Orleans, which again, are much easier and less expensive to get to than going all the way to Searsport. We can talk about this for the next 10 years, but at the end of the day CSX has absolutely no reason to push for access to Searsport and it isn't on their radar screen.

The Canadians are searching for deep water ports that stay open year round. Albany is great only a few months a year but has a year round disadvantage, the Hudson.
There are problems with aging ice breaking equipment for the st Lawrence seaway and the RRs don't want to dump the capital on them. So warmer ports it is!

GTIKING wrote: ↑Fri Dec 10, 2021 10:13 pm The sale/trade has already happened a year ago. 800 million in stocks and a pristine seat on the board is what Timmy demanded in exchange for Systems. He did it this way to avoid captial gains tax.
All CSX needs is for the Feds to rubber stamp the trade.

I would suspect that is "promised" once the transaction has been finalized. The STB is not likely to "rubber stamp" it and no one would be foolish enough (him nor CSXT) to proceed prior to that.

Furthermore, there are SEC regulatory requirements that are triggered when an individual procures 1% or more of a public traded company in common stock. These are public records whereas lesser transactions are not. $800M would put him well past this threshold. Has there been a filing listing Timoty Mellon as a minority shareholder in CSX to this tune?

CPF363 wrote: ↑Sat Dec 11, 2021 10:40 am

CN9634 wrote: ↑Fri Dec 10, 2021 1:43 pm Lastly, I heard a rumor that I don't want to let any cats out of bags for... but if its true we'll know this month and it would be a major change in the transaction as we know it. Would be a refiling done of the application and could mitigate any 'competitive concerns'.

Could you elaborate on what this means. There are competitive concerns with the CSX-Systems merger east of Ayer. CSX will control the lion's share of the New England freight rail business with the B&A, the eastern end of the B&M and the MEC as there is only one main line to the State of Maine from the rest of the U.S. The other lines, e.g. NECR, PAS, & SLR will have what is left.

None of their customers have infact filed any such concerns though that I've seen. The only concerns regarding non-PAS territory have been passenger (or irrelevant politically) related. I could have missed a filing within the hundreds though, I stopped looking a while ago.

The PAR sale has been green lit for a long time, no issues with that end. We'll most likely see Systems go then the PAS issue handled in it's own case. I really hope CSX bankrupts PAS as planned to move forward.

If my resources were sketchy I wouldn't be so bold in saying what I have been over the last following weeks, in attempt to shed some light on the behind the scenes for you guys. You gotta be one of the ' good fellahs' if you know what I mean, to get close enough. Anyhow I called CSX being the wild card for ownership in August 2019, what happened? Bam CSXT time.

All would be very suprised with CSXTs 5 year plan for the ex PAR. Some great long over due stuff coming our way!

I think many of you would benefit from trip to Central Florida right now. CSX is making huge strides with ports down there. Lots of happy customers and lots of bulk transload facilities going in around Tampa. Big Bend, FL is getting a couple miles of yard for grain trains as one example. Many miles of double track going in on the S line above Plant City with interlockings every 2 to 3 miles. It's big time railroading.

So never say never for port potential in New England. The Almighty dollar triumphs good or bad.

backroadrails wrote: ↑Sat Dec 11, 2021 12:53 pm Whatever is currently at Searsport, is the same traffic you would see if CSX somehow got the branch. The port is basically dead in the water when it comes to expansions. The town of Searsport has pushed back against virtually every attempt to develop the port.

So is this to say, Mr. Backroad, that the "Fathers" of Searsport wish to forego industrial activity in favor of another Southwest Harbor so that the Fairfield Navy will make such a Port of Call on their Summer cruises?

The description you have set forth certainly suggests that is where they want to go. A bunch of college kids to tend bar and wait on tables when "The Navy" has their "Shore Dinners" hardly equates to having Good Paying year-round UNION jobs that a maritime port would provide.

Mellon is on the board and has significant say. He owns Systems Inc and controls the stock /cash flow in it. Systems owns PAR and STs subsidiaries B&M MEC PT.
And the stubborn guy changed his demands for third time while working out a deal with csx. I'm not sure why after making a stink about capital gains tax, but it went from 8M in CSXT stocks to 4M in CSXT stocks and 4M cash *pending*. The next elephant in the room is the operator and owners of the line for the soon to be former PAS.
We have some good educated outcomes however there's way too many possibilities being explored at this time for us to sort through. It's a true wait and see moment. They range from CSA, RB&N esp with NS pulling away from the D&H/ Southern tier. NYSW would have been a good fit but CSX has 10% in them and is a STB no no. Regardless how this ends it will be a repeat of how the D&H went in 1988. Mellon ALWAYS wins, don't forget that. He stripped the D&H and he'll do it again
Imagine if he did make the payments to NY state and fully owned it! There wouldn't be a RR out there today!