CSX Acquisition of Pan Am Railways

Gilbert B Norman wrote: ↑Mon Jul 01, 2024 7:08 am So, if she deems it in her interest, how could Chessie effectively compete for business at that facility?

Chessie and Topper are already competing into that facility as evidenced by around a couple of dozen intermodal domestic containers on site in the photo.

To Mr. Cowford's point, the competitive issue here is between trucking from Chessie and Topper's central MA facilities vs. CSX extending intermodal train service to an existing Waterville or new Portland facility. Within this issue lies the underlying economics of how to balance outbound Maine paper loads moving backhaul on lower rates with inbound loads of consumer products moving headhaul on higher rates where trucking around Pan Am and boxcar paper transloading using Pan Am to access those central MA intermodal facilties has been the past ~25-year choice.

OK Mr. QB; our Equine and Feline friends both serve Ayer (equine at a disadvantage with his decrepit Hoosac Tunnel line; however that's his problem), but that is 175 miles away from Lewiston. Couldn't the efficiency of rail - especially since the passenger train agencies put FRA Class 4 in place over the entire route (and I don't know what, if any, restrictions on freight movement they have imposed) - be exploited with a closer intermodal terminal?

Now you raise, as you so often do in your postings, the interesting point; could the Containers arriving at Wally World (who of course wants their merchandise to make a one way trip to a consumer's clutter pile) be used to back haul finished paper products? I defer on that one.

That's already the name of the game, Mr. Norman, here and in all truck and intermodal markets.

Within the economics of extending intermodal train service up into Maine vs. using efficiently managed trucking from central MA intermodal facilities comes that issue of how to match outbound backhaul demand with inbound headhaul demand. As that sourcing of equipment made empty after delivering an inbound headhaul load moves southward to the point requiring having to rail empties short-haul from central MA to meet Maine's outbound demand, rail's efficiency largely diminishes.

Keep in mind the Lewiston DC once used rail by getting intermodal in on SLR, the last move there was probably 2015-2019 somewhere in that range. The warehouse traffic has decreased quite a bit over the last decade to and from that site, so I would be surprised if they started shipping directly to the Auburn ramp or if CSX ever builds one at Rigby.

I think the big issue there was/is CN and by extension the SLR (via Canada) is not exactly the most expeditious route to get inbound products to a Walmart distribution center in Maine when the products are likely coming from the South, or off a ship on the West coast.

F74265A wrote: ↑Sun Jun 30, 2024 12:46 pm The golden prize for csx in my view is all the irving traffic now moving on 427.

How so? That traffic was already theirs to haul, hampered only by deferred maintenance on the FML to Mattawamkeag by Pan Am, resulting in the line going OOS.

CPF66 wrote: ↑Mon Jul 01, 2024 9:04 am Keep in mind the Lewiston DC once used rail by getting intermodal in on SLR, the last move there was probably 2015-2019 somewhere in that range.

The joint IM service with CN ended about this time of year back in 2014, and was only 2 or 3 wells a train at the moment. Time flies...

newpylong wrote: ↑Mon Jul 01, 2024 10:03 am I think the big issue there was/is CN and by extension the SLR (via Canada) is not exactly the most expeditious route to get inbound products to a Walmart distribution center in Maine when the products are likely coming from the South, or off a ship on the West coast.

I am sure that had a part to play in it, but for a while they were doing good business, maybe 3-4 days a week it warranted a dedicated train pair.

NHV 669 wrote: ↑Mon Jul 01, 2024 10:49 am

F74265A wrote: ↑Sun Jun 30, 2024 12:46 pm The golden prize for csx in my view is all the irving traffic now moving on 427.

How so? That traffic was already theirs to haul, hampered only by deferred maintenance on the FML to Mattawamkeag by Pan Am, resulting in the line going OOS.

1. CSX has much better speed and reliability to move the traffic, which could attract more irving business. transit time under pan am took forever when the line was in service at 10mph and even longer via CP haulage to NMJ. And, in stark contrast to pan am, csx has the capital and will to perform basic maintenance.
2. Versus pan am, csx can offer one line service to customers all over the eastern USA. they have a huge franchise. Pan am could only offer interchange with another road at Worcester or Mechanicville

I always wondered if Pan Am offered special rates for Irving traffic.
Jim Patterson got hired immediately after CSX fired him or the two mutually agreed to part ways, supposedly due in part to Patterson's family being friends with one of the Irvings. I seem to remember there was also a connection between Fink and KC Irving.
So it would seem reasonable with that many of the decision makers at Pan Am being in the Irving sphere of influence, they might have been able to get special treatment.
This isn't anything concrete, just some observations I made along the way.

F74265A wrote: ↑Mon Jul 01, 2024 12:16 pm 1. CSX has much better speed and reliability to move the traffic, which could attract more irving business. transit time under pan am took forever when the line was in service at 10mph and even longer via CP haulage to NMJ. And, in stark contrast to pan am, csx has the capital and will to perform basic maintenance.
2. Versus pan am, csx can offer one line service to customers all over the eastern USA. they have a huge franchise. Pan am could only offer interchange with another road at Worcester or Mechanicville

Right, but like I said, the cars were going to hit their network regardless to reach the end customer... how is it a "golden prize" when all they've done is expedite traffic that is already headed their way onto their existing system?

Surely the improved transit times may allow for additional business growth on that end of the network, but they aren't dumping tens of millions into the line for an extra dozen or two carloads a week from already existent shippers.

Maine has a decent trucking/intermodal market. As a few comparisons, New Brunswick has two domestic intermodal ramps (CN and CPKC) servicing ~1.6M people in a rural footprint. That's slightly more than ME at ~1.4M, and with NH combined you have almost ~3M and growing in the local market. Recently, CPKC and NBSR have been surprised at the strength of the domestic intermodal, setting a weekly record this past year of 312 loads in one week.

By Population:
Nova Scotia 971K
New Brunswick 776K

Maine 1.395M
NH 1.385M

CN back in the 90s had a decent domestic intermodal franchise into Auburn, ME, with traffic mostly for Southern ME and NH. Trucks could also make it into Massachusetts. This is back when Ayer was basically a CP fed ramp, and Intransit was in its infancy. They peaked in the late 90s with a record of 16,000 containers at its peak year.

Walmart, Hannaford, and Shaws are likely the largest inbound players into the marketplace for a potential Rigby based ramp. Amazon in North Andover has possibility for some traffic if Worcester/Ayer are overloaded (the former is, the latter has capacity). Also 495/90 traffic is a nightmare, so congestion may present other issues.

When I worked at Orange 10 years ago Walmart was the biggest customer, followed by Amazon. Recently Walmart owned their boxes but sold the fleet to JB Hunt-- a black eye to the other IMCs. Hunt was trying to get in at Waterville but hadn't come to any kind of terms with Pan Am obviously. Remembering the short lived TV-95/96 jobs back in the day too. Waterville might be too far on the wrong side of the freight market to be a viable option, whereas Portland can reach NH and northern MA a lot easier.

NHV 669 wrote: ↑Mon Jul 01, 2024 12:59 pm

F74265A wrote: ↑Mon Jul 01, 2024 12:16 pm 1. CSX has much better speed and reliability to move the traffic, which could attract more irving business. transit time under pan am took forever when the line was in service at 10mph and even longer via CP haulage to NMJ. And, in stark contrast to pan am, csx has the capital and will to perform basic maintenance.
2. Versus pan am, csx can offer one line service to customers all over the eastern USA. they have a huge franchise. Pan am could only offer interchange with another road at Worcester or Mechanicville

Right, but like I said, the cars were going to hit their network regardless to reach the end customer... how is it a "golden prize" when all they've done is expedite traffic that is already headed their way onto their existing system?

Surely the improved transit times may allow for additional business growth on that end of the network, but they aren't dumping tens of millions into the line for an extra dozen or two carloads a week from already existent shippers.

i could always be wrong since I have no inside industry info. Just a long time observer of railroads and industry. I've long read that Irving shipped 10K plus carloads a years. So my view is CSX is trying to grab as much of that as possible. If port traffic is generated too, I think that's gravy. We are still many years and a lot of somebody's $$$ away from DS capacity Ayer - ME.

10,000 cars a year is 27 cars a day. I can't speak for whatever finished Irving product ships by boxcar as I have no way of knowing, but today's CPKC 121 had a single lumber load. M427 into Worcester had 20 lumber loads, but was also only 50 cars total.

F74265A wrote:

NHV 669 wrote: ↑Mon Jul 01, 2024 12:59 pm

F74265A wrote: ↑Mon Jul 01, 2024 12:16 pm 1. CSX has much better speed and reliability to move the traffic, which could attract more irving business. transit time under pan am took forever when the line was in service at 10mph and even longer via CP haulage to NMJ. And, in stark contrast to pan am, csx has the capital and will to perform basic maintenance.
2. Versus pan am, csx can offer one line service to customers all over the eastern USA. they have a huge franchise. Pan am could only offer interchange with another road at Worcester or Mechanicville

Right, but like I said, the cars were going to hit their network regardless to reach the end customer... how is it a "golden prize" when all they've done is expedite traffic that is already headed their way onto their existing system?

Surely the improved transit times may allow for additional business growth on that end of the network, but they aren't dumping tens of millions into the line for an extra dozen or two carloads a week from already existent shippers.

i could always be wrong since I have no inside industry info. Just a long time observer of railroads and industry. I've long read that Irving shipped 10K plus carloads a years. So my view is CSX is trying to grab as much of that as possible. If port traffic is generated too, I think that's gravy. We are still many years and a lot of somebody's $$$ away from DS capacity Ayer - ME.

MNR alone ships close to 36,000 cars per year, from what I recall from grant applications for track up there. Although on page 4 of the grant application for the Keag' sub forest traffic is projected to increase to 63,000 cars per year by 2030, which most of that goes via the EMR Millinocket Sub, so I am guessing the figure included traffic on that line, not just the keag sub.

https://www1.maine.gov/mdot/grants/infr ... iption.pdf

Its also worth noting Irving Pulp and Paper just announced a major expansion, which will increase production by 65%:

https://www.cbc.ca/news/canada/new-brun ... -1.7249554

They are currently building a new chip storage facility at the same mill, which is an additional $110 Million expansion:

https://www.jdirving.com/en/newsroom/Ir ... -woodyard/

It was mentioned a while ago that they were putting in a chip plant there so they can bring round wood in by rail, but there hasn't been any further mention of that in months. The only advantage to that is they can unload round wood faster than chips. But they still have to run it through the chipper.

The mill in question:

https://maps.app.goo.gl/VJaRPFJKoYDj3XYs9

This mill gets chips from a few places:

Deersdale, NB: https://maps.app.goo.gl/rQ45KYVeS2XY3p2V7

Grand-Rivere, NB: https://maps.app.goo.gl/5ta2AqoXH31i5D6y6

Fort Kent, ME (seasonal): https://maps.app.goo.gl/8VJbgLnyDrpUhFFk7

Portage Wood Products (Inactive?): https://maps.app.goo.gl/jLRKqNxEwLfUYxSU7

Skerry/Ashland, ME: https://maps.app.goo.gl/Z98cXDoE9pHtX24r9

Misardis, ME (Daquaam): https://maps.app.goo.gl/Lh9w1t7AspN2wLtr9

Siberia Yard Brownville Jct, ME (Pleasant River Lumber) They load where that map pin is, the google map imagery is about 10 years old: https://maps.app.goo.gl/Ap1nwLudeooTqUue6

Irving Paper in Saint John also takes chips from the same locations: https://maps.app.goo.gl/D8fGsBmri8UAhMw99

Saint Croix Tissue/Woodland Pulp is also doing an expansion next year, although there hasn't been an official press release yet. Which if I were to guess is because permits haven't been approved yet. They bought 1st Ave and Pine Street from the town and the land between those roads and Spruce and Palm St and have been doing some utility relocation and land clearing over the past few months.

https://maps.app.goo.gl/CvQq5jPH7koJ9MSc6

They are putting in one or two new tissue machines there and might be doing an expansion somewhere else on the property. That will also include an expansion of the chip mill which equals more inbound logs, which will likely require them to rebuild some of the line towards the old OSB mill since they are unloading logs every place they can at the current site and it wouldn't be too hard to build a few spurs to the log yards up on the former Princeton Branch:

https://maps.app.goo.gl/quFskCi9fgEKMbws7

The mill also owns the former OSB and lumber mill which is currently used as log storage and Xpress Natural Gas has a distribution site there which taps into the mills pipeline. Which they could also restore track to that location for more log unloading capacity. Eventually the mill is going to run out of space at Baileyville and will refit the old OSB plant, but that is some years away although I think they hold the water licensing for that plant as well:

https://maps.app.goo.gl/UeQQPcjrZEaXKYcc6

Log traffic by rail has been increasing over the last couple of years. When I first started writing my article for Railfan and Railroad back in 2021 they were running maybe 3-4 days a week. Now its holding steady at 5+. Car counts have also increased, the first few times I chased they were doing about 10 cars. The last time I chased in 2022 and several times I chased in 2023 they had 50+ for the mill. The mill is relying on the railroad more in the winter now, since the St.Regis/Stud Mill Road from Costagin to South Princeton and then the Pocomoonshine Mountain Road which is dirt and connects with several paved roads to get to the mill, has been closed during the winter. Or at times during the winter, since the warm winters have caused the roads to not firm/freeze up. So the mill has been buying more logs from Irving at Ashland:

https://maps.app.goo.gl/ssH1LSCqSKEWSbXN7

As well as the TNT Road Company at Fort Kent and Irving which also loads logs at Fort Kent:

https://maps.app.goo.gl/wb4Aqy7P9u4otrNk6

They may also load logs at Grand-Riviere on the remnants of the former CN INR line to Campbellton, NB. However the few times I have gone through that area coming back from Quebec, I haven't been able to tell if they are getting inbound or outbound loads:

https://maps.app.goo.gl/T89wTAGiZHJzFahE7

I know Caron Logging of Fort Kent (contractor for Irving Woodlands) loads logs for the mill at Saint Croix on the Madawaska Subdivision, https://maps.app.goo.gl/57LfezSqrXBwq3NU8 although they used to go to LP at New Limerick before the rebuild to produce LP siding.

Since then it seems like LP mainly get logs by truck and then a few times per year they get like 40+ gondolas of some type of wood from I am guessing the southern states, off of CSX. No idea what type it is, but the loads I have seen, it looks like its all cut offs and stumps. LP New Limerick:

https://maps.app.goo.gl/PEe3u37kxPgXdwq69

With the purchase of the Millinocket Sub, they were supposed to reopen the two log load outs Central Maine and Quebec used to ship logs to Jackman.

Golden Road Spur: https://maps.app.goo.gl/tH3X6fq9dyrbUe1w9

Huber (E. Millinocket Sub) https://maps.app.goo.gl/cn315WFURyjeKR6p6

Not sure the status of that work, but I know they are doing a lot of MOW work elsewhere so it could just be on hold until MOW crews get freed up. They have to do some tie work and fix some damage AIM scrap caused when they were scrapping the CMQ log car fleet.

The log yard at Oakfield also sees use albeit infrequently. The cedar home/fence company nearby took some cars of cedar logs from the south east a few years ago, during a cedar shortage but I think that was the last traffic handled there.

https://maps.app.goo.gl/TK7Bm8SkBZg3dYG38

On the Houlton Sub there is also a chip mill, which once produced daily cuts of woodchips for Great Northern Paper. However after the bankruptcy it changed hands and went to W.T. Gardner & Sons which I heard supplies chips for LP, although I cant verify that.

https://maps.app.goo.gl/E5yKrqP7hqfmnEFb6

I think Pinkham/Levesque/Fraser not really sure who owned it, loaded chips at the mill in Ashland until its "temporary" closure in 2008:

Mill: https://maps.app.goo.gl/ozfVpeaEdU489JRx7

Article: https://www.globalpapermoney.com/fraser ... l-cms-2129

Which at 70MBF per year production, I am surprised no one bought and reopened that mill.

There is also an inactive chip plant just beyond where CMQ loaded logs. From what locals have told me, Huber opened it just in time for the GNP bankruptcy and that it only ran a short time. Given the close proximity to the railroad, its surprising Irving hasn't made a move for it, considering they just built a new chipper at Deersdale maybe two or three years ago:

https://maps.app.goo.gl/PtvtLYxYhjx2DBd1A

Plus you have the finished lumber, paper from Madawaska, slurry and chemicals to Madawaska, OSB from Fort Fairfield plus inbound resin and other chemicals, agricultural traffic to 3 customers off of the PI, Fort Fairfield, and Caribou Subs, Dead River at Skyway which just added two tracks and unloads LPG and diesel (from Searsport). You also have Columbia Forest Products there. Then on the Houlton Branch you have outbound LP products going CN, inbound propane and resin, diesel/heating fuel to Dead River, inbound and outbound feed and fertilizer to Agri-Cal and Agri-Val (just added a 1,000 ft or so siding). And you have additional LPG traffic at Millinocket (Dead River) and at Fort Kent (Dead River plus they also get heating fuel here as well). Along with the occasional traffic like potatoes at Van Buren. That's not including the McAdam/Saint Stephen traffic along with all of the business from industries at Saint John, the port, or bridge traffic from Nova Scotia.

In addition to all of that you have Sibley Trucking at East Millinocket looking to get rail service: https://maps.app.goo.gl/eCjea12Bnh27VhmY7

Emery Lee & Son recently opened a large hot top plant and was interested in getting asphalt emulsion in by rail, which would be unloaded at the former bunker C racks: https://maps.app.goo.gl/wyc22htFPnZhmMtz6

Then you also have Highland Pellets looking to build a pellet mill at the former GNP Millinocket site which the proposed plans show the mill getting inbound wood chips/mill refuse and shipping pellets to Searsport: https://maps.app.goo.gl/Fnf3oxiVv2qBGviT9

One North the non-profit which owns the site said in a email that construction would kick off in Q3 or Q4 of this year. Although Highland Pellets hasn't responded back to my requests for information, but I have sent a few emails to the town to see if permits have been filed yet. They did redo the access road into the mill over the winter as well as the utilities, which I think was mentioned in other discussions.

I don't recall where it was mentioned, but NBSR is either in the process of building, or looking at building a transload at McAdam.

There are a few other new customers in the works, Ocean Steel in Saint John wants rail service again, NBSR is replacing the crossing and rehabbing the switch back which hasn't been used since the mid 2010's: https://maps.app.goo.gl/uSByX8Bp76a9AM7K6

All in all, they move a lot more than 10,000 cars a year.