Pan Am Railways, For Sale/Acquisition/Merger?

gokeefe wrote:If CMQ is interested in EMR I wonder if they would buy out PARs track rights to Vanceboro (which I think are still in place from MEC legacy agreements...?)?

I don't believe New Brunswick and Maine Railways is for sale.
I'm sure you could buy it, but its not for sale, which is an important distinction...NBSR/MNR/EMRY is worth much more to JDI than any profits the railroad makes. Its a part of their production line, and profits from the rail operations are gravy. JDI is the state of Maine's largest land owner, and has assets all along its rail lines that take advantage of that. In fact, I wouldn't be surprised if MNR 'loses' money for the remainder of the 30 year lease on the property. A money loser is a great tax write off, and JDI makes out like a king on its decreased transportation costs for raw materials and finished goods.

NHN is the same sort of deal. Its a wholly owned subsidiary of Boston Sand & Gravel, and serves strictly as a component of B S&G's logistics. It's of virtually no interest to anyone who doesn't own sand pits in Ossippee and a cement plant in Boston. The fact that they are a common carrier shouldn't confuse their primary purpose.

cvrr5809 wrote:Reliability is also a BIG part of the equation, and when it comes to PAR, it's not normally in their vocabulary. Paying a $1000 per car for the product to stay on one mode of transportation for its whole journey would be was less stressful to the suppliers and consumers alike. Less middle men means less hands and less potential damage and spent time which ultimately offsets such a cost per car. Fluidity last time I checked.

First, Pan Am from 'Keag to NMJ was just as reliable as NMJ-WTVL is. So there are no significant reliability gains in the current routing. I'm also not sure how fewer middle men means lower chance of damage? It's not like you're repacking the stuff, its a box car operating on consistent track (not the same track, consistent track, where 25mph track all meets the same standards and 10mph track all meets the same standards, unlike roads that may be poor and bumpy but still have a high speed limit). I'm not saying consistency isn't important in a supply chain, but ultimately the old adage "cash IS king" trumps, and you're paying an additional $1000 for an extra (if I did my math right) 22-23 miles.

cvrr5809 wrote:It's a damn shame to see the NMJ-Keag mileage virtually dead to road trains. It could be a viable artery in the right hands. Pan Am is what's bad for Pam Am! Once again reliability and consistency, and 10mph over a stretch this long will not sustain such demands!

As we've agreed, reliability is more important than velocity. If the price is right an extra 24 hours of transit time is more than acceptable. And like I said earlier, if its JIT you're looking for you best opt for a 53' dry van. If you want economy a 50' F plate is adequate. This is why paper mills are customers and Hannaford Brothers isn't.

The long and short of my point is that its already being borne out.
MABA/BAMA (or its predecessor/supplemental symbols) were consistently 40-60 cars.
NMWA/WANM is now, based on what I see, consistently in the 30-50 car range. In a 14 month span they've bled 10 cars off their Irving interchange trains. One can only assume that this traffic has either moved to truck which is now price competitive, or moves over CM&Q to Montreal, which is now price competitive. Short term their are minimal downsides and a pretty great reduction in costs associated with an EMRY-CMQ-ST routing, but long term (and maybe not that long term considering we're only 14 months in) its going to cost Pan Am business, offer it to the competitor who's squeezing their prices, and put the NMJ-WTVL segment in the same death spiral that NMJ-Keag is currently in.

KSmitty wrote:

gokeefe wrote:If CMQ is interested in EMR I wonder if they would buy out PARs track rights to Vanceboro (which I think are still in place from MEC legacy agreements...?)?

I don't believe New Brunswick and Maine Railways is for sale.
I'm sure you could buy it, but its not for sale, which is an important distinction...NBSR/MNR/EMRY is worth much more to JDI than any profits the railroad makes. Its a part of their production line, and profits from the rail operations are gravy. JDI is the state of Maine's largest land owner, and has assets all along its rail lines that take advantage of that. In fact, I wouldn't be surprised if MNR 'loses' money for the remainder of the 30 year lease on the property. A money loser is a great tax write off, and JDI makes out like a king on its decreased transportation costs for raw materials and finished goods.

NHN is the same sort of deal. Its a wholly owned subsidiary of Boston Sand & Gravel, and serves strictly as a component of B S&G's logistics. It's of virtually no interest to anyone who doesn't own sand pits in Ossippee and a cement plant in Boston. The fact that they are a common carrier shouldn't confuse their primary purpose.

I don't believe it is either .... but if we assume CN9634's claim is true, and I have no reason to believe in either direction, EMR is one of the only "non-PAR" options that makes sense.

I strongly agree that EMR makes little sense at all for JDI to sell. NHN same with the significant distinction that they do have some propane business.

$1K more per car at 35 cars a day X 365 days that's nearly $13M in haulage fees a year. Some of that they wouldn't pass on to their customers because now they barely have to maintain past NMJ but that is a still a very large amount to add to a car fee. I can't see how that is possible that train would have zero cars left.

newpylong wrote:$1K more per car at 35 cars a day X 365 days that's nearly $13M in haulage fees a year. Some of that they wouldn't pass on to their customers because now they barely have to maintain past NMJ but that is a still a very large amount to add to a car fee. I can't see how that is possible that train would have zero cars left.

I've been told several times ST/Irving maintained their rates and CM&Q tacked on an additional $1000. Unless I lost something in translation thats my current understanding of the situation.

Dating back to the early 80's, since the acquisition of the MEC and B&M,
Guilford/PAR has sold scores of pieces of property for many millions of
dollars in addition to rail lines sold to ME, NH and MA.. There are probably
not that many desirable major properties that could still be sold, and some
of these have major haz-mat cleanup up issues. So any sale of the railroad
soon would only include mostly the rail lines, yards, locomotives, rolling
stock and track equipment, much of which is now leased. Bottom line is
that most of the value of the railroad is the active rail lines only.

There must be something in it for ST with routing their cars to the NB&M via the CM&Q to make it worth while verses going over the old Maine Central to Keag. Someone must have run the numbers and determined that it this is a more economical route verses updating, maintaining the track and paying crews on their own line. Haulage agreements are not new to Springfield Terminal, in the very early 1990s, Guilford moved all of their Conrail bound cars away the west end of the B&M via the Rotterdam interchange to the Barber interchange in Worcester and B&A routing. They started with only auto traffic in 1989 and moved all of the freight to the new routing beginning the following April. For every car run via Barber, they payed Conrail to move their cars over the B&A and also payed a switching fee to handle their cars in Selkirk. Management could have easily kept running to Rotterdam but determined that the haulage and switching fees were worth it overall verses the expenses incurred in running the west end. Now if ST and NB&M decide that it wants to avoid the CM&Q middleman and go back via Keag, then both railroads may have to fund the cost for track updates, but don't look for ST to do it themselves anytime soon unless the CM&Q becomes uneconomical.

Conrail was weird. Barbers or Rotterdam Junction are currently just different rates. Last I checked it was cheaper by a thousand dollars (4500 vs 5500) to ship a paper load out Barbers vs RJ originating from a PAR mill. That's why most of that traffic to/from CSX has shifted that way.

KSmitty wrote:

newpylong wrote:$1K more per car at 35 cars a day X 365 days that's nearly $13M in haulage fees a year. Some of that they wouldn't pass on to their customers because now they barely have to maintain past NMJ but that is a still a very large amount to add to a car fee. I can't see how that is possible that train would have zero cars left.

I've been told several times ST/Irving maintained their rates and CM&Q tacked on an additional $1000. Unless I lost something in translation thats my current understanding of the situation.

Could be 100% correct just seems high when you look at the math doesn't it.

gokeefe wrote:I don't believe it is either .... but if we assume CN9634's claim is true, and I have no reason to believe in either direction, EMR is one of the only "non-PAR" options that makes sense.

Look at the other railroad with Canadian trackage.

The holding company that owns the other orange & black locomotives running through maine?

Interesting post in the SLR thread regarding interchange from CMQ.

But I've also noticed a huge increase in traffic on the Canadian side interchanged from the CMQ (apparently since CMQ is prevented from interchanging with CN at St. Jean as the MMA/CDAC did). In past years the MMA-SLR interchange usually involved a single MMA Dash-8 and perhaps 10 cars (usually boxcars and salt hoppers) and there weren't many cars in the SLR interchange yard in Sherbrooke.

Now, the CMQ interchange has two units and a couple dozen cars, and two (or sometimes all three) of the SLR Sherbrooke tracks are full of cars - including high-side gondolas, hoppers and tank cars (largely LPG).

I can't help but wonder what the implications are for PAR ...

None?

None?

>I'm assuming this is previously mentioned scrap, and LPG traffic already originating in Canada, stuff that wouldn't touch PAR to begin with.

gokeefe wrote:Interesting post in the SLR thread regarding interchange from CMQ.

But I've also noticed a huge increase in traffic on the Canadian side interchanged from the CMQ (apparently since CMQ is prevented from interchanging with CN at St. Jean as the MMA/CDAC did). In past years the MMA-SLR interchange usually involved a single MMA Dash-8 and perhaps 10 cars (usually boxcars and salt hoppers) and there weren't many cars in the SLR interchange yard in Sherbrooke.

Now, the CMQ interchange has two units and a couple dozen cars, and two (or sometimes all three) of the SLR Sherbrooke tracks are full of cars - including high-side gondolas, hoppers and tank cars (largely LPG).

I can't help but wonder what the implications are for PAR ...

Could be none, or it could be devastating for PAR, depending on CMQ/SLR's as yet unknown intentions. Maybe not probable, but it is possible that ALL of PAR's NMJ interchange traffic could be rerouted down SLR to Danville Junction or elsewhere. If that were to happen it would leave PAR with the options of local traffic only east of Danville Junction (which is rapidly declining), or reopening the Keag gateway. Unpleasant choices, but things will be changing one way or another. And if they are not aggressively proactive (in contrast to past practice), and willing to put their money behind it (yeah right...), PAR will be left in the dust.