• CP to acquire Central Maine & Quebec Railway

  • Discussion relating to the past and present operations of CPR. Official web site can be found here: CPKCR.com. Includes Kansas City Southern. There is also a KCS sub-forum for prior operations: kansas-city-southern-and-affiliates-f153.html
Discussion relating to the past and present operations of CPR. Official web site can be found here: CPKCR.com. Includes Kansas City Southern. There is also a KCS sub-forum for prior operations: kansas-city-southern-and-affiliates-f153.html

Moderators: Komachi, Ken V

  by Ken V
Canadian Pacific (TSX: CP) (NYSE: CP) and Fortress Transportation and Infrastructure Investors LLC (NYSE: FTAI) announced they have entered into a definitive agreement whereby CP will acquire the Central Maine & Quebec Railway ("CMQ").

CMQ owns 481 miles (774 kilometres) of rail lines primarily in Quebec and Maine. The end-to-end transaction will provide CP customers with seamless, safe and efficient access to ports at Searsport, Maine and to Saint John, New Brunswick, via Eastern Maine Railway Company (EMRY) and New Brunswick Southern Railway (NBSR), thereby preserving and enhancing competition.
CP press release
  by Engineer Spike
What potential traffic can this generate besides the obvious Irving traffic?
  by johnpbarlow
It's possible that some Maine/Maritimes to/from Albany/midwest US traffic could be diverted off a Pan Am routing - eg, I've seen Moose River lumber centerbeams loaded at CMQ at Jackman, ME on Pan AM POED running through Ayer. That traffic might be re-routed west on CP instead of going to Pan Am at Northern Maine Jct. Also, I'm guessing CP could route loaded LPG tank cars from the midwest to CMQ points in Maine or NBS interchange as a single line alternative to NS/CSX/Pan Am. Don't know how much if any paper mill business CMQ has acess to these days. Just speculating...
  by RGlueck
The Searsport, Maine, branch remains active and is in good condition. CPR may have the strength to generate more traffic delivered by ship to rail.
My question would be the fate of the old BAR F3A, stored indoors at Derby. She's operable with very little repair.
  by CVRA7
Wonder who actually owns the F3 these days? I think the Derby shop operation will stay independent for the time being based on info I've seen published elsewhere.
  by Rockingham Racer
Nobody seems able to come up with an answer about what will happen to the Rockland Branch.
  by johnpbarlow
Trains Magazine on-line reports on 11/22/19 that CP Chief Marketing Officer John Brooks told the RailTrends 2019 conference on Friday that
"Canadian Pacific will upgrade Central Maine & Quebec trackage so that the route linking Montreal and Atlantic ports can handle premium intermodal and automotive traffic [upgrading from CMQ's current MAS from 25mph]..."

and "...Rival Canadian National has a major presence in Atlantic Canada, including service to Saint John, as well as Halifax, Nova Scotia. Buying the CM&Q will enable CP to better compete, Brooks says..."

and specifically "...Acquiring the CM&Q also may permit CP to better compete for potash traffic that CN currently handles to the port of Saint John for export to Brazil..."

http://trn.trains.com/news/news-wire/20 ... um-traffic
  by trainsinmaine
The CMQ's Rockland Branch is leased, not owned. Since the State of Maine owns it, I would assume the State will determine who will be the succeeding operator --- an intriguing question, given the negotiations with Amtrak about running summer service on the line.
  by RGlueck
When Rockland was being operated by the Maine and Eastern, much money was invested as M&E parent company (Morristown & Erie) was trying to engage passenger traffic as well as freight. The change-over to CM&Q was a political back-stab by Gov. Paul LePage. CM&Q has only been interested in moving cement from the Dragon Cement plant, which kind of narrows the scope of the line. It should be interesting to see how this develops, but I wouldn't expect to see much dramatic change, at least not immediately. An outfit with the vision of the Strasburg could do great things on the Rockland branch, given some support.

BTW, I know of at least one private line that has expressed interest in the F3A, assuming the current owners want to release it.
  by douellet
I’m looking forward to seeing the CP return to Maine. Listening to PBS this morning I got the impression that the state was looking forward to increased use of the port facilities in Searsport.

As for the BAR F3 that Dick mentioned, I hope the interested party would be based in Maine. Rode an excursion train pulled by the F3 during the BAR’s centennial celebration back in 1991 I believe. Still have my punched ticket.
  by Engineer Spike
To me this transaction has many parts. First being Fortress putting the company up for sale. This is the third operator since CPR spun off the lines. My opinion is hat this line has more potential as part of a large system. than it does alone.

CP has some strategic gaps in its system. Albany and Montreal are the only east coast ports left. These are hampered by the long river voyages to reach them. This is not too beneficial, as the sizes of the ships is limited.

I think that Irving may have even asked CPR to put in a bid, with a guarantee of traffic. CPR also gets whatever else it can drum up. This should be considerably more than what CMQ, nor its predecessors were able to do. To me, it seems like they can market an efficient single linehaul which could be to any point in the coast-to-coast system. Irving was basically captive to CN. Fortress has been pretty proactive about upgrading plant from the shambles which MMA left, but it still isn't great. The other option is Guilford. You may say that it is Pan Am now, but the same goons are still pulling the strings. Now Guilford can be circumvented altogether. If the NJ Loop in Delson was fixed up, and the curvature eased, then it would be a straight shot to the D&H.

Guilford has done some improvements, but 25 mph is still slow. On the B&M end, NS has done lots of work to the track. In the time period when most of Guilford's traffic was headed via Worcester, lots of double track and sidings were abandoned. Now the traffic has increased, but not much of the extra track has been replaced. That makes it a bottleneck.

I wonder if the other shoe will eventually drop. What I'm getting at is if Irving will keep its parts of the former CP lines. Is it worth it for them to run a railroad, or give CPR the rest of the line back, and wash its hands of the railroad business.
  by fromway
On another site there was a statement that CP was planning on having service from SJ to Montreal in 24 hours in the future. What kind of upgrades will have to be made to the CMQ to get to that point; Crew and Facilities wise? What part will Irving have to play in a 24 hr trip?
  by johnpbarlow
CP formally filed with STB to acquire CMQ US operations:

"...Applicants Soo Line Corporation ("Soo Line Corp") and Central Maine & Quebec Railway US Inc. ("CMQR US") file this minor application.... seeking approval from the Surface Transportation Board (the "Board") for Soo Line Corp to acquire control of CMQR US, a wholly owned subsidiary of Railroad Acquisition Holdings LLC ("RAH"). Soo Line Corp has agreed to acquire 100% of the equity interests in RAH [for $130M for RAH + $4.5M if Katahdin Railcar Services of Derby ME is acquired by CP, which appears to be the plan]. As a result of the transaction, Soo Line Corp will (indirectly) control CMQR US, which owns and operates approximately 244.2 miles of rail lines in Vermont and Maine, as well as the right to operate on approximately 57.25 miles of rail line leased from the State of Maine's Department of Transportation, for a total of approximately 301.45 route miles in the United States (the "Transaction"). This is an end-to-end control transaction and will assure the continued efficient movement of interline traffic interchanged between CP and CMQR via those lines, including overhead and local traffic..."

A footnote in the STB filing also says "...3 Soo Line Corp will seek authorization from the appropriate Canadian authority for its acquisition of CMQR Canada, including the approximately 236. 81 route miles of rail lines in that country..."

Interesting excerpts from the public filing:

- "...Assuming that the conditions precedent to closing the merger of Black Bear Corporation [Soo Line subsidiary] with and into Railroad Acquisition Holdings LLC have been satisfied, the parties intend to consummate the merger on December 30, 2019. In order to avoid unlawful control ofCMQR US in violation of 49 U.S.C. § 11323, immediately upon consummation all of the common shares of CMQR US will be deposited in an independent voting trust pending approval of the Transaction by the Board [CP/Soo requests that STB issue decision by May 12, 2020 with STB effectivity date of June 11, 2020] ..."

- "...CP expects to modify the parties' interchange at Iberville in Quebec to enable operation of longer trains, to invest substantial capital to improve track infrastructure to allow for faster, more efficient, economical and safe operations, and to provide seamless service..."

- "...Today, the CMQR system handles more than 24,000 carloads annually [from Exhibit 15 the Operating Plan "... CMQR traffic volume has increased rapidly in recent years, from approximately 20,300 carloads in 2016 to 24,600 in 2018..."]. Of that traffic, CMQR interchanges approximately {{ }} with CP at St-Jean sur Richelieu, Quebec. Thus, the CMQR system, which connects with CP end-to-end at St-Jean sur Richelieu east of Montreal, has become an important CP interline carrier and is a natural fit for CP’s network. As acquisition of CMQR by another Class I railroad could put much of this traffic at risk, when FTAI sought a buyer for the railroad earlier this year, CP sought to acquire it in no small part to protect the growing traffic volumes that it interchanges with CMQR. In this respect, CP’s ownership of the CMQR system is critical to preserving competition in northeastern U.S. and eastern Canada. This includes competition with Canadian National to the north, as well as Norfolk Southern and CSX to the south.
The Transaction will result in faster, seamless and more efficient service on Applicants' lines. Such improved service will benefit shippers, including by opening new markets such as the import and export markets served by the Atlantic deep-water ports of Searsport in Maine and Saint John in New Brunswick. Improved service to Searsport creates the potential to broaden the range of both the commodities handled and geographic markets reached through this recently reconstructed and revitalized Atlantic port [http://searsport.maine.gov/?SEC=65CA2B2 ... 65CD293C03]. CP intends to work with port facility owners and operators, shippers and receivers to improve the competitiveness of this deep-water port and expand the volume of traffic moving through it. The Port of Saint John, which is currently undergoing a CAD $205 million modernization and expansion that will nearly triple the port's container handling capacity by 2023, presents additional commercial opportunities for CP, CMQR and their customers..."

- "...In the near term, Applicants expect organic growth of the existing CMQR traffic base, particularly forest products and chemicals. Applicants also expect near and long term growth in CP's traffic base. The efficiencies that CP will drive, as well as the port expansion, make these import and export markets a more attractive option for current CP's customers and enhances Applicants' ability to win new customers from intermodal and intramodal competitors. Applicants estimate near term growth of 2% to 3% per year over the next four years. This would represent an increase by 2023 of approximately three to four thousand cars and approximately { { } } in revenue. Applicants estimate that there is the potential for additional growth of up to seven thousand cars for additional revenue of up to approximately { { } }.
Applicants also see opportunities to reduce costs of service by operating more efficiently between CP and the CMQR system as well as over the CMQR. For example, CP currently physically interchanges with CMQR Canada at Iberville east of CP's St-Luc Yard irt Montreal. Currently, due to the length of the interchange tracks at Iberville, train length is limited to 4,500 feet. CP expects to modify operations at Iberville to enable longer trains to operate between Applicants. Operating longer trains may in turn reduce the number of main line CMQR trains, although train frequency will largely depend on actual traffic volumes. Additionally, CMQR would gain access to CP's equipment pool enabling, for example, better alignment of locomotive horsepower to operations on CMQR's system, more flexibility on train lengths and speed, and improving CMQR's fuel efficiency. Further, CP expects that both CMQR and CP would be able to perform pre-blocking of traffic for each other, which would create additional operating efficiencies and cost savings.
To provide faster and more efficient service and ensure safe operations, CP plans to invest in CMQR's infrastrncture. CP's preliminary estimate is that Applicants will spend as much as $75 million or more over the next three years as part of a capital plan to upgrade the condition of much of the CMQR system to FRA Class 3 standards ( or Canadian equivalent standards on CMQR Canada). CP anticipates that this capital plan will include extensive tie replacement, rail replacement, joint elimination, shoulder cleaning, and switch and grade crossing upgrades. These investments will bring much of the CMQR system up to CP standards, allow Applicants to operate at speeds above 40 MPH and further improve safety. The faster operating speeds should reduce the number of train crews required, reduce cycle times, improve equipment utilization and improve the reliability and consistency of service..."

Here are a few tidbits from Exhibit 15 Operating Plan - Minor not mentioned above:

- "...Current Interchange with CP: The physical interchange between CMQR and CP is performed at Iberville, QC. CP serves the interchange on local train F91, which departs St-Luc yard, located on the island of Montreal, six days per week ( except Saturdays). After performing interchange at Iberville, Local F91 returns to St-Luc yard. CMQR Job 814/812 is the local service operating between the Iberville interchange and the CMQR yard at Farnham, QC. CMQR local Job 814 runs Monday to Friday, and Job 812 operates on Sundays.
The interchange track at Iberville is about 4500' in length. The track length limits the size of the interchange to 4500' of traffic and requires coordination between CP and CMQR. CP and CMQR do not pre-block traffic for each other, so all traffic that arrives on Local F91 is switched by CP for outbound train services. Similarly, on arrival back at Farnham yard, Job 814/812 traffic is switched for CMQR outbound train connections...."

- "...CMQR US operates seven yards across the CMQR system:
• Derby Yard near Milo, ME: supports car and locomotive service activities at the facilities in that yard.
• Newport, VT: operational six-days-a-week to operate eastbound and westbound mainline trains, set-out and pick-up mainline train cars for Sherbrooke, deliver/pick-up St. Lawrence & Atlantic Railway interchange trains, and perform local train service and car switching for customers at or near Lac Megantic, QC. [Newport is site of Vermont Rail System interchange].
• Brownville Junction, ME: operational seven-days-a-week to operate westbound mainline trains to Jackman, ME, build trains operating to/from Northern Main Junction, ME and Millinocket, ME, build haulage trains interchanged with New Brunswick Southern Railway, provide local train service for customers, provide service to Derby yard/shops, and switch cars in yard.
• North Maine Junction, ME: operational seven-days-a-week to operate trains to/from Brownville Junction, ME and Searsport, ME, interchange traffic with Springfield Terminal/Pan Am Railways, provide local service for customers, provide service to Derby yard/shops, and switch cars in yard.
• Rockland, ME, Searsport, ME, and Millinocket, ME: support the operations of crew stationed at other CMQR US yards..."

- "...CMQR US does not currently handle any intermodal traffic..."

- "...Pursuant to a rail service contract with Ohio River Partners-the owner and common carrier on the line-CMQR operates the Hannibal subdivision, a 12-mile rail line in Ohio [leased NS line - CP will terminate this agreement]..."

- "...There is significant potential to create a more efficient main line operation between major yards on in integrated CP-CMQR system. The mainline train service between CP's St-Luc yard and CMQR's Brownville Junction yard will be reviewed in order to, among other things, eliminate the 4500' interchange restriction at Iberville. This will also improve mainline railcar transit times and reliability. Local train service and yard assignments will be reviewed to identify other consolidation opportunities. As a significant portion of CMQR's volume is interchange traffic, translating improvements in traffic blocking and mainline operations into improved interchange operations will be a priority. For example, Applicants will seek to establish optimal timed connections to local jobs or interchanges as this will create benefits for both customers and interline carriers. Of particular interest will be exploring scheduled connections between new mainline train services and the NBSR..."

- "...As to the Rockford [sic - should be Rockland] subdivision, a non-contiguous line to the rest of the CMQR, the immediate intent will be to maintain the present services between Rockland, ME and Brunswick ME. Changes will be considered in the event of a significant change in the volume of interchange traffic with Springfield Terminal/Pan-Am at Brunswick, or a change in the Amtrak agreement...The only passenger service operating on lines owned or operated by CMQR is the Amtrak service operating on the Rockland subdivision. Amtrak terminates at the Brunswick Terminal at the west end of the line and does not operate over the line. The Rockland line is owned by the State of Maine, and CMQR is under contract to operate and maintain the track between Brunswick, ME and Rockland, ME. There are no plans to make any changes to the operations or management of the Rockland operation that would alter Amtrak's future ability to operate..."

- "...The [attached] table shows the estimated number of trains on the Rail Segment Lines per month before and after the Transaction. Because the expectation is that there will be little or no immediate change in current train operations after the Transaction, the below traffic volume chart does not reflect any Transaction-related changes in the volume of rail traffic. Eventually, and depending on the variables described above, there may be some changes in the volume of rail traffic, however, those changes do not necessarily correlate to increased train operations. Operation of longer trains may lead to fewer main line trains and/or allow CP to absorb some or all of the volume growth in existing train service. At this time, CP anticipates that any change in train volumes will be minor..."

https://dcms-external.s3.amazonaws.com/ ... 300195.pdf
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