CSX Acquisition of Pan Am Railways

I am not on railroad related Facebook groups (for several reasons), but I hear that the world's greatest railfan is saying the application is not going to be a slam dunk, specifically with objections from VTR, which he pretends to work for.

I don't think anyone believes that it is going to be a lay up by any means, but there certainly are mitigating factors within the application on several fronts including the commitment to fair and carrier neutral pricing/routing by B&E.

Outside of the application, I think the guaranteed assignment of operations of the entire Northern to NEGS is a pretty good step. However, as VTR will be boxed in to the south by G&W roads, I wonder if they would want trackage rights (whether they excercise them or not) from Hoosick Junction to Mohawk/XO to gain a direct interchange with NS and RJ for CSX. They already have qualified crews to Buskirk to use the double iron EB to HJ.

It is not clear to me how broad the Everett “switching service “ would be. It is discussed at the bottom of page 265

I read this as no added fee to deliver to PAS instead of going via CSX single line haul. CSX will deliver the cars to PAS if that is the shipper's desired route. The first line is key, "As an alternative to the independent competitive option..."

Here's another question, what if CSX is able to resurrect the Ethanol train move to Global at Revere, would they take the straight shot over the B&A and the GJ or do they run it up to Ayer and then over the Fitchburg?

Trinnau wrote: ↑Tue Mar 02, 2021 1:03 pm I read this as no added fee to deliver to PAS instead of going via CSX single line haul. CSX will deliver the cars to PAS if that is the shipper's desired route. The first line is key, "As an alternative to the independent competitive option..."

Ah, that makes sense

Can you imagine 80 loads of Ethanol rolling through those Cambridge Streets? There would anarchy lol. I think it would slip in from the West or North.

roberttosh wrote: ↑Tue Mar 02, 2021 1:12 pm Here's another question, what if CSX is able to resurrect the Ethanol train move to Global at Revere, would they take the straight shot over the B&A and the GJ or do they run it up to Ayer and then over the Fitchburg?

Is there even still the ROW where they could build new track that gives trains access to global?

Im thinking Global in South Portland, ME as well (which NS has previously looked at), which takes ethanol via barge from NY/NJ area. I'm told the cost of getting the terminal setup was something Pan Am balked at and there was no support from NS financially.... whether that is true or not who knows.

It's well established that ethanol basically comes from Iowa, and rails east to port or end users. Now the real question I have is, if CP is originating carrier, they can try to build the route to stretch the miles via the CMQ (I'm curious if that adds more out of route miles vs D&H jumping south) or just a BNSF-CSX direct routing depending on the supplier, which makes more sense to me of an O-D routing to either Revere or South Portland.

All-in-all I think ethanol is a good opportunity for CSX to throw some dollars behind in the new Pan Am territory. SLR/Safe Handling setup an ethanol transload operation coming in via CN right before they sold to Savage, I believe they were trying to grow that business for blending with the local gas guys, but I'm sure still having to truck it the final 30 miles was cost prohibitive vs a rail-water routing directly to Global.

CP's best Ethanol play is probably export through Searsport. I doubt anywhere on the former CMQ lines has the population density to support a stand alone domestic unit train operation.

newpylong wrote:I am not on railroad related Facebook groups (for several reasons), but I hear that the world's greatest railfan is saying the application is not going to be a slam dunk, specifically with objections from VTR, which he pretends to work for.

I don't think anyone believes that it is going to be a lay up by any means, but there certainly are mitigating factors within the application on several fronts including the commitment to fair and carrier neutral pricing/routing by B&E.

You mean the guy who convinced ANR&P that Conrail was going to run PAS and everything was going to be routed via the Hoosac Tunnel? VTR and VAOT are indeed upset at being surrounded by GWI. They are going to use everything in their power to get concessions...including Senator Bernie Sanders' ties to Pres. Biden and Sec. of Trans. Buttigieg. At the end of the day though, what are they going to get that they haven't been offered already? Certainly nothing that will be a deal stopper. Maybe trackage rights from White River Junction to Bellows Falls? Haulage to CSX at Rotterdam? The end of the Mountain Division at St. Johnsbury?

CN9634 wrote: ↑Tue Mar 02, 2021 1:51 pm It's well established that ethanol basically comes from Iowa, and rails east to port or end users. Now the real question I have is, if CP is originating carrier, they can try to build the route to stretch the miles via the CMQ (I'm curious if that adds more out of route miles vs D&H jumping south) or just a BNSF-CSX direct routing depending on the supplier, which makes more sense to me of an O-D routing to either Revere or South Portland.

Unit trains actually originate from many other Midwest & upper Midwest states, including NE, MN, WI, SD & IL. The terminating carrier will typically have the most leverage in terms of routings as the Western carriers and shippers are all having to compete against each other for the business.

newpylong wrote: ↑Tue Mar 02, 2021 11:34 am ...
I don't think anyone believes that it is going to be a lay up by any means, but there certainly are mitigating factors within the application on several fronts including the commitment to fair and carrier neutral pricing/routing by B&E.
...

Now we’re all going to have to wait for the STB to answer the age old question... to B&E or not to B&E

newpylong wrote: ↑Tue Mar 02, 2021 11:34 am
Outside of the application, I think the guaranteed assignment of operations of the entire Northern to NEGS is a pretty good step.

That's something we had been working on well before the PAR For Sale announcement and obviously had stalled as they searched for a buyer. Original plan was for trackage rights to Nashua and by the end had evolved to a lot more than just trackage rights.

But with the current conditions like you said, would an added bonus of trackage rights to XO make it enough for corporate to support?

However,... in regards to VRS going to file against, this is the 2nd time I've heard it today with him being the source, but I've yet to hear any grumblings from corporate or our management team.

From the application itself:

To ensure that B&E’s operation of PAS will not have an adverse impact on VTR’s access
to other rail connections, CSXT and NSR have agreed to the following commitments: (1) For
movements to and from the east with connections to PAR, PAS will establish rates at current
levels, subject to future reasonable escalation, as long as B&E is operator of PAS. (2) For
movements to and from the west with connections to CSXT at Rotterdam, NY, PAS will
establish rates for movements between Hoosic Junction (where VTR interchanges with PAS
today) and Rotterdam (where PAS connects with CSXT) at current levels, subject to future
reasonable escalation, as long as B&E is operator of PAS. (3) VTR moves traffic to and from
storage facilities at East Deerfield, MA, a location on PAS. To ensure that rates on these
movements remain at competitive levels, PAS will agree to provide haulage between the storage
facilities at East Deerfield and Bellows Falls (as noted above, haulage already exists between
Bellows Falls and White River Junction) at rates that are the average of current interline rates for
those movements for as long as B&E is the operator of PAS. (4) PAS will commit to providing VTR with service that is the same or better as that provided today on the movements described
above.

So CSX, NS, and G&W have struck a deal with VTR regarding any issues that would have arisen. It's right there in the application. Of course, VTR could go back on this once the hearings begin, but why not just sort it out beforehand? It's not like CSX wasn't accommodating to the needs of other involved parties.

Yes, this was noted already when I brought up the VTR:

but there certainly are mitigating factors within the application on several fronts including the commitment to fair and carrier neutral pricing/routing by B&E.

However what is the definition of, "Subject to future" when discussing handing of these captive rates"? How long will they keep the status quo? It's not spelled out. The carrot might not be large enough...

Just playing devil's advocate.