CSX Acquisition of Pan Am Railways

One can look at this sale in two different ways: Do they sell the whole railroad in one transaction or piece meal. The one transaction is easiest, whole network is sold and done. No need to worry about the northern end of the Mountain Division in Vermont for example. Then there are the logistics related to lines that are spun off as to where interchange points would be, establishing haulage agreements etc.

If the one transaction is executed, and it was five years ago, NS would be the big player here wanting to get more New England traffic. This may not be the case anymore. CP is one potential buyer, they can leverage their two established connections at each end of Pan Am in Maine and New York and would provide them with access to a new market. Separately, would NS consider selling the southern portion of D&H and the Southern Tier to CP if they don't want PAS? Also with a direct connection at Mattawamkeag is Irving; they could simply step in and run Pan Am as is. CN is more complicated, would have to acquire the NECR or SLR or both to directly connect. Don’t believe that CSX is a player other than trying to protect their existing traffic. NS will also look to safeguard their traffic also. If sold in pieces, it is anyone’s guess how this could turn out.

Regardless of who ends up with Pan Am though, a significant investment on the part of the buyer(s) will have to be made in improvements to much of the track structure and equipment. Irving would have the challenge of getting Keag to Old Town operational at the onset. Should be interesting to see how it all turns out in the end.

Are we *sure* that CN doesn't have some kind of trackage rights that allow them to connect via White River Junction (where Pan Am has trackage rights)?

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I guess the notion really is why does CN need to be directly connected? They own some offline 'niche' operations both in rail and intermodal space. Pan Am has a pretty solid book of business, and even still if they did want to route through their core network, they have commercial rights over NECR and SLR to make that possible for routing purposes.

What exactly are the commercial rights over NECR and SLR? They don't show up on the official CN network map ...

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If I'm not mistaken, with the exception of a single minor bridge in Portland, Rigby / Yard 8 -Montreal via SLR is capable of handling stacks and racks. CN could easily (re) absorb SLR and turn Rigby into a sort of "back door" to Boston for IM and autoracks. Plenty of space around rigby for such a facility.

I'm not so sure that's true at all. G&W owns SLR. Brookfield has made an agreement with G&W to purchase their railroads. I doubt they would give very good terms to CN or be willing to sell.

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bostontrainguy wrote: ↑Wed Jul 01, 2020 1:01 pm Thinking a bit about this Canadian aspect, CP already has rights to Machanicville so this would give them a massive loop completely surrounding New England. Opens up all kinds of possibilities I would think.

They don't have rights they actually own the mainline in and out of Mechanicville in both directions (excluding the B&M). NS is the one with rights into the yard.

If the CN or CP were to buy, it could negatively effect traffic levels on certain line segments, specifically the former B&M between Portland and Ayer, as CN would likely divert as much traffic as possible over the SLR while CP would probably do the same with their newly reacquainted Moosehead Sub.

MEC407 wrote: ↑Wed Jul 01, 2020 4:11 pm And speaking of BMO... is there any significance to PAR's choice of BMO (Bank of Montreal) to handle the sale? For instance, would that signal that they were hoping for or expecting a Canadian buyer?

Possibly...but several Canadian Banks have a presence in the US anyway:

TD – Toronto Dominion
RBC – Royal Bank of Canada
BMO – Bank of Montreal

NHV 669 wrote: ↑Thu Jul 02, 2020 7:27 am

Cosakita18 wrote: ↑ CN could easily (re) absorb SLR and turn Rigby into a sort of "back door" to Boston for IM and autoracks. Plenty of space around rigby for such a facility.

Why would they go through all that trouble for nonexistent traffic, ignoring the fact that you can't get racks into Boston into the first place? IM for who? CN stopped serving the SLR container lane almost six years ago, and there wasn't much traffic to speak of then.

The only thing that makes sense here is that they also plan to buy SLR. Without that you get a mediocre isolated regional railroad with little upside potential struggling to survive (against CP?). Bringing a seamlessly connected Class 1 into the area would change everything I would think.

From Maine Public:

Maine Public wrote:Christopher Parker, associate editor of Rails & Ports Media, says the sale is likely to draw many potential buyers. "The Monopoly game was built on this sort of circumstance,” says Parker, “Who can own what and block the other person off at the pass."

Among the potential buyers are Canadian National — which, Parker says, has indicated it wants to expand its track holdings in eastern North America — and longtime rival Canadian Pacific, which recently bought the Central Maine and Quebec Railroad.

Parker says Maine has a lot at stake in the sale.

“Certainly the paper industry would be impossible without the railroad to bring the paper out and bring the supplies in." And, Parker adds, “there's substantial economic benefit across many businesses and tourism as well from the Downeaster train.”

The on time performance of the Downeaster, like most Amtrak trains, has a lot to do with the company that owns the track it runs on. Pan Am has helped Downeaster trains maintain a very high percentage of on-time performance. Parker says Canadian Pacific gets an “A” rating from Amtrak for keeping its trains on time. Parker points out Canadian National gets a “D.”

Read more at: https://www.mainepublic.org/post/maines ... lroad-sale

I'm starting to wonder if this sale excludes the Pan Am Southern based on "one of the railroads in the company" language????

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I think that was a typo and that it was supposed to say "one of the largest regional railroads in the country."

Ok that makes a lot more sense.

Still no answer or information I could find about CN rights over NECR beyond G&Ws "Great Eastern Route" from a 2016 STB filing. It appeared that G&W had some sort joint pricing authority on certain commodities via CN. They had specifically cooperated with P&W on some of this.

Still totally unclear otherwise. Although I respect those who say, "CN could just buy these lines as a stand alone" it seems to give a lot of other carriers far too much leverage over rates.

This would not be true if there are some kind of provisions for bridge traffic or rate divisions via either NECR or SLR.

I take it in the post-Staggers era that's all proprietary information ...

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