CSX Acquisition of Pan Am Railways

CIty of Auburn owns it and would be happy to sell it to just about anyone. They're in a strange pissing match with the SLR so its stuck in purgatory at the moment. The issue seemingly that SLR keeps using City of Auburn owned track for their own purposes (car storage basically) but there is no formal arrangement giving them access... and yet the City has done nothing productive to address it either sooooo who knows. But it's built and with a quick clean up could be ready to go for sure.

Funny timing, a new Rails & Ports just article came out on the PAS/CSX sale that as far as I can tell is a high level skimming of Newpy's comments (or strange coincidence) plus some fluff (no peanut butter though). Basically there is no news yet.

Any article with a question mark in the headline is suspect.

https://railsandports.com/2021/02/ns-si ... inghamton/. It sure seems like NS could care less about anything but it’s core route system and boutique traffic. This company doesn’t fight for traffic anymore.

RMB357 wrote: ↑Sat Feb 20, 2021 10:19 am It sure seems like NS could care less about anything but it’s core route system and boutique traffic. This company doesn’t fight for traffic anymore.

I don't know why I'm so hung up on Topper.

I see their rather clean C-44's (more so than Warren's; let's not get into "Kitty Power") go by here as "run throughs" both on crude and grain trains. I know they were formed from two of the most profitable roads out there and added a piece of a third that was expected to be a "Con Game" (attributed to EM Frimbo), but turned out to be relatively profitable. I've walked by 1200 Peachtree NE and awed by "this is a railroad HQ" (I've been inside 500 Water - it's a dump).

But I like to think "they ain't dumb" at either.

But even if one certain Equine is getting those hindquarters ready for "a good swift..." that will get whacked when the actual Surfboard filing is made, and if the traffic potential, with or without maritime, is as great as our experienced "hands" around here hold, I'm at a loss to know why Topper "bolted" with barely a "whinny".

If you take a look at an NS system map, it's pretty apparent that anything North and East of their Cleveland/Pittsburgh/NJ main line is considered more or less of a secondary route and it's hard to imagine the former D&H lines and or the PAS line ever becoming high density corridors. With the split-up of Conrail, NS clearly got the short end of the stick when it comes to upstate NY and New England traffic. CSX has the much better route structure with it's principal Chicago-NJ main line running across NY state as well as their superior I-95 North/South corridor running directly into the big hump yard at Selkirk. With Selkirk being at the crossroads of several key lines, it gives CSX a big advantage in terms of service/routing options and flexibility into New England and even NYC proper that the NS just can't touch. If the Pan Am sale to CSX does indeed go through, that will only serve to put the NS into even more of a corner in terms of potential future traffic growth in the region. At the end the day, I think that the NS felt that the Pan Am system was just too far removed from the its' core network, which it would be connected to by way of a patchwork of secondary lines, to be a good fit.

RE Auburn... location aside, the SLR site has the same problem as the Yard 8 facility. Low-tech and much too small for today's "mainstream" intermodal services. Portland has ~700-ft loading tracks; Auburn has ~1,100-ft loading tracks. Campare with "greenfield" Mechanicville, NY (~4,000-ft) and even "brownfield" Ayer (~3,200-ft). Now, if the Auburn facility was merged with the property to the west, now you're getting somewhere.

Market demand to support such a facility is another question.

This is the same railroad that spent 250 million to add onto Bellevue Yard only now to shut the hump and most of the operations there. A couple of trains a day means nothing to them. It’s the operating ratio and nothing else

Roanoke shop, nearly as bad. The list is only growing.

Think CSX as soon as EHH became CEO. I just hope there's something left if and when they come out the other side as CP and CSX have.

And the way NS is going is probably why the Pan Am sale to CSX is being held up. PAS is the issue. With what NS has been doing to the rest of their system to "Right Size" their network they probably don't want anything to do with PAS or even a NYSW style of operation. Are they going to give up on NE traffic? I guess time will only tell. I hope CSX can somehow secure Pan Am with STB approval.

The article mentioned under the pic that NS is going to look for a more creative route for their New England bound traffic to go south... whatever that means.

Probably means all E/W traffic will go Pittsburg-Enola up to Bingo. The heck with the southern tier.

I have no idea what to think about Norfolk Southern nowadays. On one hand, there are people at NS who want to grow as shown through efforts like Rail Pulse (GPS tracked railcars). At the same time, NS has been in full "Slash & Burn" for the past two years.

I think that NS took one look at Pan Am and said, "Cleveland-Buffalo-Binghampton and Enola-Binghampton-Albany-Ayer are already secondary routes, why would we add more onto that?" NS would have to build an entirely new operational center (East Deerfield perhaps?) in New England to make a Pan Am acquisition work. CSX has the advantage of Selkirk being "right there" so to speak. I also don't think NS is in a position to spend 700 million plus much more to upgrade Pan Am Railways.

This sale came at the worst time for them. If this were 5 years ago, then they would have had the ability and the will to make an acquisition. Looking 5 years into the future, NS in all likelihood will be in a position to go for such a thing. (Basing this assertion off of the trajectories that CN, CP, CSX took after initially embracing PSR.) I find it interesting that CSX is quicker to jump on an offer (Conrail 1996), while whenever NS has the opportunity to jump on an offer (Conrail 1986 and 1994) they always seem to drag their feet with it. History isn't repeating itself, but it showing its patterns.

The problem with using Deerfield as a new hub is that there will never be enough traffic there that would allow NS to build long distance trains like Selkirk is able to do to places likes Waycross, GA, Chicago, East St Louis, etc. Conway is probably the closest NS yard that can truly mimic what Selkirk does and there is just no good way to get there from Deerfield. No matter how you slice it, CSX's network is much better positioned in terms of moving traffic in and out of New England.

Whoever has owned the water level route with it's fundamentally lower cost and faster characteristics has always had the advantage over the owner(s) of the ex-NKP-Erie-D&H-B&M route over the long run and certainly in the deregulated era. This New England play by CSX highlights the balance achieved in the Conrail split between the 2 companies with NS getting the Pittsburgh line plum. And, long-term a company can't remain 500 bps over their head-to-head competitor's operating ratio, as has been the case recently with NS, so there has to be a strategic response.

In general, irrespective of NS "eye-candy", when you look over time the case can be made that CSX has out-innovated and out-played NS (dare I say far) more than the other way around right up into this era of PSR. One era of NS innovation occurred when Tom Finkbiner was with the company. Their current stated innovation strategy is rightly focused upon technology.

However, I would say that this CSX play for PAR/PAS visa vi NS, along with the possibility of single-line organic or truck-conversion growth, or big plays involving the Maritimes, gives me no less reason to believe that defense against Canadian incursion and/or facilitation of evolutionary changes within their dominant and valuable existing New England franchise and/or a big infrastructure deal centered on PAS provide any less possibility at this early date.