Pan Am Southern future Ayer auto site vs CSX E. Brookfield

A couple of questions about the automotive business:

1. Can NS route shipments on its own from manufacturing plants it serves such as BMW in Greer, SC away from CSX in East Brookfield to Ayer SanVel without CSX or Boston Autoport( the company that actually runs East Brookfield having anything to say about it. If so why hasn't NS and CP Rail opened back up the already existing terminal in Vorheesville, NY near Albany in the industrial park to carry traffic from NS served plants.

2. Do the automakers themselves care that much about a particular local distribution terminal or do they just leave that up the rail carrier. I assume NS wouldn't route BMW traffic to Ayer if for example BMW was explicitly opposed to using the Ayer terminal.

3. The future San Vel terminal seems rather tiny compared to East Brookfield. Do you think that if NS is serious about growing their auto business with Pan Am they will have to find a much larger location near Gardner for example.

4. Is there any possibility of CSX giving up their lease in Ayer on the existing terminal or do they just want hold onto it to spite NS and Pan Am. I know there was talk about E Brookfield being overcrowded and some of the old sites being reopened. I suspect though with auto sales down this is no longer a problem

Tim

The Fords that used to go to Ayer and now go to Brookfield always came from the NS to begin with, from the Fostoria Mixing Center. Prior to 1990, the NS shipped the autoracks to Binghamton NY, then via the D&H to the B&M at Mohawk. Then Ford insisted that all it's vehicles be transported in fully enlosed auto carriers. This presented a problem for Guilford, as full-height racks would not fit in the Hoosac Tunnel. So, they made an agreement with Conrail to have the racks sent to Selkirk, then to Worcester , then on up to Ayer. This carried on into CSX. But CSX didn't just hand off the racks to Guilford at Ayer, they also handled all the logistics at the Ayer facility through their TDSI unit. So it was CSX, not Ford, that closed the Ayer auto yard, and it would make sense that they would hold onto it as long as they can to prevent any competition from NS.

The old B&M yard site in Mechanicville is a prime location for an auto unloading facility, and the Hoosac Tunnel has been improved to handle fully enclosed auto carriers. So I would not be surprised if NS is aggresively trying to get auto buisness back from Ford or any other automaker.

From what I've heard, NS has already won the Ford business back from CSXT, but the new contract does not begin until 2009 or 2010. I don't have the numbers in front of me, but I recall that the proposed terminal at the old San-Vel site was quite a bit smaller than the former Auto terminal (now controlled by CSXT) with a lot fewer parking spaces. Ford sales have been going south for a while, so am thinking they could still be squeezed into the new site, but beyond that I think they would need to expand in order to go after anyone else or the imports. In addition, I believe that the Subaru traffic that is moving via CSXT to the PW for furtherance to Davisville, RI actually originates on the NS in IN, so that would likely be a candidate to be swung over to an NS-PW routing via Gardner. In the end, this business is all driven by economics (and to a lesser degree service) and in some cases it's all or nothing. So while CSXT may have the best prices and service into New England, if say NS wins all the East Coast Toyota business, then by default that business will end up in Ayer. similar to Schneider awarding virtually everything in the East to CSXT or GM going with the UP out West.

The main advantage of the East Brookfield auto yard is access to major highways. The MA Pike is roughly 6 miles down the road from the auto yard. Regarding Ayer, any attempt to bring back the auto yard will bring out the Ayer Nimby's who have said in the past they don't want an auto yard there, period.