Should Pan Am be concerned about traffic loss due to CP acquiring CMQ?

I doubt it, they've actually be doing a pretty good job at keeping speeds up the last few years. In fact, right now all three Districts are on the same page of the speed summary, something that hasn't happened in a very long time. The line to Keag is so far gone that nothing will run up there faster than 10 except the occasional plow extra.

None of Pan Am's interchanges are changing as a result of CP's purchase of the CM&Q. They will still connect with the CM&Q at Northern Maine Jct. and the NBSR via EMRY at Mattawamkeag. Currently, Pan Am is interchanging its NBSR bound cars to the CM&Q and they in turn interchange those cars with the EMRY. Pan Am could ask the STB for trackage rights from Northern Maine Jct. and Brownville Jct. for direct connection with the EMRY, however, the STB may deny such a request due to the fact that Pan Am still has its own direct interchange with the EMRY at Mattawamkeag.

690 wrote: ↑Sat Nov 23, 2019 5:52 pm Pan Am submitted a bid for the Bangor Sub when the MMA was being sold, but it was passed over in favor of a buyer who wanted to purchase the entire railroad (Fortress). And yes, I'm aware that CP has stated that part of the reason they bought the CMQ is for access to Searsport. Here's the thing: Searsport isn't all everyone is making it out to be. There's no direct rail access to the pier anymore (thanks State of Maine), the whole area would need to be completely rebuilt (at a minimum of tens of millions of dollars), there's enough of a NIMBY presence in the area to hinder it from taking off, and lastly, operationally, you can't run six axles down to Searsport, and most of the bridges still need work. Make no mistake, CP bought the CMQ for the (in)direct access to Saint John, despite what they may say publicly about Searsport.

I am siding with the company press release, rather than hearsay. I am well aware of the fact that curves and bridges would need serious work to get up to spec for 6 packs to run on it. I know the company I work for placed a bid in for the LP terminal that either Sprague or Irving was going to build that got shot down. Sprague didn't want to try and fight it, along with the dredging of the harbor so they scrapped the plan. CP has more money, and could fight it and win. Even if you look back over the summer, trains have been getting smaller. Even if Pan Am bought the Bangor, they would have 48+ miles of 10MPH track which would need a complete rebuild. That would be less money than to rebuild 113 or so miles, but I just don't see the traffic base being there to support it. And they have proven in the past that they aren't dedicated to rehabbing to NMJ anyway, just look at the federal grant package they pulled out of. Granted they did use the cash to buy the GE's, but with the exception of the line out of Waterville to Portland, Pan Am has paid for all of their upgrades on someone else's dime. I got a feeling you will see brand new units on Pan Am before you see them dragging a few cars up and down the Bangor sub.

ericofmaine wrote: ↑Thu Nov 21, 2019 4:19 pm And a further question, at least in my mind, does this finally spur NS into action and purchasing the other half of PAS, if not more?

Eric

It's been stated many times in this Forum.....

NS is NOT allowed to purchase 50% or more of Pan Am under the STB terms for the Pan Am Southern deal from 2009. They are locked into a minority share on the PAS, and 0% of the ST.
CSXT, CN and G&W all pushed for that caveat as a term of that deal. So stop wishing it will happen. Cause it won't.

There’s probably always going to be enough traffic to warrant Pan Am running from Bangor to Waterville. There’s a substantial amount of traffic going to the fertilizer and grain outfits side by side at Detroit, there’s the asphalt company at Bangor as well as some warehouse businesses and the Holtrachem cleanup at Orrington has many years left. The ND facility at Old Town should eventually become a significant shipper too. In addition, there’s Pan Am bound business received from the Irving roads that can’t be routed any other way, such as wallboard, lumber, CO2, logs, scrap metal, etc. Maybe they sell that segment to the Irving’s but someone almost certainly will be running a decent amount of tonnage over that corridor.

Yeah, the other guy doesn't know what he's talking about. Traffic always starts to drop off from the end of summer into fall, then it picks up again from winter through spring. In addition, the segment from Waterville to NMJ is in quite a bit better shape than the track east of Old Town. It's still ten, but the roadbed isn't completely shot like it is up east, and it's good for 286k cars. Even in the Maine Central days the trackage between Old Town and Keag was the weak link of the mainline, and it hasn't changed any for Pan Am.

And, yes, they dropped out of the grant, and as you pointed out, they used the money to buy GEs. Honestly, it was the right move; the 600s/300s were beat to shit, and they desperately needed more power for the entire system. It's unfortunate that the Waterville to NMJ segment didn't get the upgrade it needed, but, at the same, they improved the rest of the railroad by getting better power. And as you pointed out, yes, they don't typically use their own money to upgrade, but neither do the other Maine railroads. Every other railroad uses Tiger Grants as well, so trying to call out Pan Am for also doing so isn't really applicable.

And finally, regarding Searsport: CP can say whatever they want in the press release, it doesn't change the fact that Searsport would need huge investments to even get it to a point where it's competitive against Halifax and Saint John, and they're getting access to Saint John again by buying the CMQ. Explain why they would dump tons of money into what's essentially a backwater port when Saint John offers all that Searsport could potentially offer right out of the gate, without needing to invest millions of dollars into it?

PBMcGinnis wrote: ↑Sun Nov 24, 2019 4:23 pm It's been stated many times in this Forum.....

NS is NOT allowed to purchase 50% or more of Pan Am under the STB terms for the Pan Am Southern deal from 2009. They are locked into a minority share on the PAS, and 0% of the ST.
CSXT, CN and G&W all pushed for that caveat as a term of that deal. So stop wishing it will happen. Cause it won't.

Not sure where I said anything about wanting this to happen, just a curious if???

Eric

PBMcGinnis wrote: ↑Sun Nov 24, 2019 4:23 pm

ericofmaine wrote: ↑Thu Nov 21, 2019 4:19 pm And a further question, at least in my mind, does this finally spur NS into action and purchasing the other half of PAS, if not more?

Eric

It's been stated many times in this Forum.....

NS is NOT allowed to purchase 50% or more of Pan Am under the STB terms for the Pan Am Southern deal from 2009. They are locked into a minority share on the PAS, and 0% of the ST.
CSXT, CN and G&W all pushed for that caveat as a term of that deal. So stop wishing it will happen. Cause it won't.

Except an STB filing is far from permanent legislation - as evident by trackage, haulage, discontinuances, agreements, etc being filed on a daily basis.

Of course CSXT, CN and the G&W are not going to want someone who can actually run a real railroad at their back door. The only one out of that group that would have a leg to stand on is CSX due to their trackage rights through PAS to get to Pan Am. If those were kept, moot point. I think any protests would likely be overwhelmed by letters of support from major railroad shippers that have been dealing with these guys since 1983.

I also would agree that any desire to get to Searsport is very ancillary to gaining access to Saint John, regardless of any press release. And yes, this time of year, nearly all traffic is down with the exception of propane and paper/chemicals. Lumber, drywall, grain, all traditionally go way down. When I worked there there was always bellyaching about traffic being down 40% this time of year. It will pick back up in the spring, and the fuels will go down. It's cyclical.

I think you will be surprised to see Searsport is actually a larger part of their focus

Forgot the obvious stuff too, lumber traffic out of NB off Irving can skip Pan Am entirely going to CSX-NS. Now they will have a solid alternative to CN while leveraging CP's connections deep into NY, NJ and PA (haulage rights mostly now but they can price competitively I imagine). Paper can do the same (think not just Irving but Twin Rivers or Woodland Pulp who has a lot of heartburn using Pan Am routings to reach markets down south). Another reason PAR should be concerned about this deal no doubt...

History recalls only about 5 years ago or so there was solid traffic coming off Irving going to ST to CSX/NS gateways, which now goes mostly CN either interchanged at St. Leonard or Saint John. With the Keag line on and off again, Pan Am hasn't been able to make a real comeback on that traffic and now a more stable competitive option in CP might really push that further off the table.

Yeah, the other guy doesn't know what he's talking about.

Let's keep the discussion respectful, please.

Competitive dynamics will certainly evolve with the change of CMQ's ownership, but it's important to keep in mind that while CP's leverage in the regional freight market will likely increase, they are NOT going from effete to 800-lb gorilla. It's a lot more nuanced.

FWIW, Tony Hatch, transportation analyst, consultant, and program consultant for Progressive Railroading’s RailTrends® conference summarized the various RR exec's commentary at the recent RailTrends 2019 industry conference. Tony offered an interesting comment re: Pan Am without elaboration in the middle of his report/essay (Michael Bostwick. Pan Am EVP and Chief Commercial Officer spoke at the conference):

Pan Am is very excited about the CP-CMQ deal.

Excited in a good way or a bad way? Curious what this means...

https://www.progressiverailroading.com/ ... tch--59476

I have never heard anyone get excited in a bad way...