What's next for MMA?

If the "Keystone XL" pipeline troubles are an indication of this proposed Trans-Canada pipeline,the RR's have little to worry about,
if the proposed routing is thru Toronto's metro area or thru Ottawa's metro area,figure on a BIG NIMBY fight there,taking years to
settle.
As for the MM+A and Rail World N.America operations,headed to Bankruptcy Court,and sold to the highest bidder.

gokeefe wrote:

roberttosh wrote:Remember, MMA was barely hanging on with one man crews and low wages, so just can't see how CP could turn a profit.

That was before the oil trains. If they were to resume it seems as though the line would be viable.

They were upside down before the oil trains arrived and the oil trains merely allowed them to stay afloat. 1 to 2 oil trains per week and log/woodchip loads are not going to get the CP too excited, especially considering that they almost recently ditched the much more strategic Montreal-Albany main which sees almost daily ethanol and oil trains as well as multiple manifest trains.

Backshophoss wrote:If the "Keystone XL" pipeline troubles are an indication of this proposed Trans-Canada pipeline,the RR's have little to worry about,
if the proposed routing is thru Toronto's metro area or thru Ottawa's metro area,figure on a BIG NIMBY fight there,taking years to
settle.

Canada and the US are two totally different animals with a big part of Canada's economy being natural resource based. The main reason the Keystone pipeline has been held up is Obama and the left and that will not be the case with Canada's politicians. Not saying there won't be some fights, but they are building along side or converting an existing gas pipeline all the way to Quebec I believe and the rest of the pipeline is through the middle of nowhere. Having Irving involved isn't going to hurt either. Lastly, considering what just happened up in Lac Megantic, to many, the pipeline is going to look like a great idea.

Zeke wrote:Might the CP acquire the NBSR also ?

Only if Irving wanted to shoot themselves in the foot. I think Irving has more to lose if they don't acquire the remainder of MMA. If PAR had the cash and was feeling really ambitious I thinm they might consider this acquisition but for the moment I think they are totally focused on growing the business on their current network and would not see much good in acquiring the kind of mileage they have just spent the last 30 years getting rid of.

For Irving this does in fact represent a major opportunity and would place PARs pricing in direct competition with CP. That's an interesting scenario.

The value of the line for Irving is playing CN and CP off one another. Remember much of the traffic went over the International of Maine and CDAC and now goes over CN. The MMA had some rates that weren't competitive but with Irving having the whole line, they can play with the rates and they can get more money off longer hauls over the Moosehead. At one time there were as many as 2 or 3 pairs of trains on the CDAC.

CN9634 wrote:The value of the line for Irving is playing CN and CP off one another. Remember much of the traffic went over the International of Maine and CDAC and now goes over CN. The MMA had some rates that weren't competitive but with Irving having the whole line, they can play with the rates and they can get more money off longer hauls over the Moosehead. At one time there were as many as 2 or 3 pairs of trains on the CDAC.

I understand that due to traffic origins acquiring MMA allows for the play of CN and CP in a more regional sense. I was wondering if Irving would be in a position to pressure CP with regard to the number of trains they even contracted for via CP from the Bakken in general since MMA would be out of the middle.

I can't see any play in this for PAR. Geographically it hurts their core lines to divert maritime traffic over the Moosehead. Irving may be the one who gets it initially but I'm wondering if CP may at some point make an offer for all the lines they gave up in the 90's. Really retrench CN back to Halifax and try and win back some traffic siphoned off to PAR/CSX. Irving got into the railroad business by default and may be willing to get out with a healthy CP offer.

fogg1703 wrote:Irving got into the railroad business by default and may be willing to get out with a healthy CP offer.

I see that too but I'm under the impression they're starting to like what it does for them the more they do it.

fogg1703 wrote:I can't see any play in this for PAR. Geographically it hurts their core lines to divert maritime traffic over the Moosehead. Irving may be the one who gets it initially but I'm wondering if CP may at some point make an offer for all the lines they gave up in the 90's. Really retrench CN back to Halifax and try and win back some traffic siphoned off to PAR/CSX. Irving got into the railroad business by default and may be willing to get out with a healthy CP offer.

When CP got rid of the line in the 90s, they had 3 solid pairs of trains. I think you'd have to see that return. There could be strategic value for the line in the future, but there is a long way to before that happens. All keep in Mind, if Irving takes over the line, this will be the first time both halves as well as the Bangor & Aroostook is combined into one system. If it happens, it will be interesting to see how traffic grows on the line.

From the Maine Sunday Telegram:

Maine Sunday Telegram wrote:A rail hub in Maine, suddenly too silent
Its link to Quebec and a wider world severed at Lac-Megantic, Brownville struggles with layoffs and the loss of its lifeblood.

BROWNVILLE – Normally, this is a noisy place, as workers shift railroad cars around a network of tracks in the north end of town.

The clang of steel and rumble of diesel is almost constant.

But now an unwelcome silence has settled here.

"When it's quiet, nobody is working," said Richard Monahan, 63, standing on the front porch of the American Legion Hall on Railroad Avenue in Brownville Junction, the neighborhood around the rail yard.

"This town is hurting now," he said. "The railroad is the only thing we have here."

Read more at: http://www.pressherald.com/news/a-rail- ... 08-04.html" onclick="window.open(this.href);return false;

one needs to understand railroad pricing to opine on future ownership of the mma trackage. the rate 'division' is given by the originating railroad to the delivering railroad. it is not a complicated process. it reflects the 'what the traffic will bear' pricing and estimates of 'costs'. the stb has gone to 1.80x costs which gives the delivering railroad a card, albeit not an ace since everyone argues about their 'costs'. given this environment, irving would have many variables to consider before embarking on ownership. frankly, the uncertainties surrounding mm&a leads me to conclude that irving will never become more involved beyond trying to limit it's ownership of the disaster. pan am will move all the oil. there are no competitive marine alternatives. ken patrick

KEN PATRICK wrote:there are no competitive marine alternatives. ken patrick

Barge or tanker rail-marine transshipment via Global at Albany isn't competitive?

gokeefe- i was interested in the albany adventure after the first shipment ran agound about a mile from albany port. i don't think i did a post on my numbers. the tanker day rate was a killer when you factor in the transit. this vessel type cannot transit the cape cod canal. it must go south of nantucket shoals before heading east. also factor in the interest costs for a 15 day cycle. you won't see that move again. ken patrick

KEN PATRICK wrote:gokeefe- i was interested in the albany adventure after the first shipment ran agound about a mile from albany port. i don't think i did a post on my numbers. the tanker day rate was a killer when you factor in the transit. this vessel type cannot transit the cape cod canal. it must go south of nantucket shoals before heading east. also factor in the interest costs for a 15 day cycle. you won't see that move again. ken patrick

Here's the list of ships calling at the Port of Albany so far this year.

http://www.portofalbany.us/images/pdf/S ... .27.13.pdf" onclick="window.open(this.href);return false;

M/T Afrodite cleared the port on 6/29 with a cargo of fuel oil bound for Canada. Not sure how often this list is updated but I happened to see the exact same ship yesterday afternoon from the deck of a ferryboat on Lower New York Bay. She had just cleared the Narrows and was making for the open sea; I think it's reasonable to assume she might be on a shuttle run.

If they have no problem transporting fuel oil on the Hudson, I doubt anyone would have a problem with crude.

Wouldn't any potential buyer of MM&A also be assuming the legal liability of the company? I'm not too familiar with corporate/railroad law... but would MM&A by simply "declaring bankruptcy" eliminate its legal and financial distress, thus absolving the suitor (buyer) of the mess? I would imagine any buyer of MM&A would inherit the legal and financial burdens of the company, not to mention to public scrutiny and NIMBYism that is sure to follow all along the route...