CSX Acquisition of Pan Am Railways

My theory with NS is that they want their core routes, similar to the Conrail “X”, and that’s why they probably didn’t make a play for the Pan Am. If Wick Moorman was still running NS I believe they would have already done this and there never would have been an announcement of a sale. Nor would they have scaled back Bellevue Yard. There was once a plan at NS prior to the Conrail takeover to run 20-25 trains a day on the Southern Tier Line until they realized they didn’t need or have to because of the Pittsburgh Line. The Patriot Corridor was a great idea, and I always felt the Port of Boston should of, could of been great potential for this traffic had it been developed as once planned. CN just seems like the logical answer to pumping serious traffic over it. Imagine the tracks brought up to 60mph for intermodal and one day Hoosac Tunnel cleared for double stacks.

MEC407 wrote: ↑Sun Jul 26, 2020 3:32 pm But neither is Guilford, and when you're starting from the bottom, there's nowhere to go but up.

You do have a point..

NYC27 wrote: ↑Sun Jul 26, 2020 12:32 pm Untrue. I have it on good record that neither CSX nor NS was interested in this traffic. NS stopped doing international business to Ayer and wouldn't quote rates. CSX declined as well, since this was international traffic they would have had to run the boxes through P&W at Stackbridge (Class I's hate to mix 40 and 53' well equipment at the same facility). The volume wasn't enough to either excited even though it would have been loaded in both directions. PAR was more than happy to add it to the PS block and move it at the same rates.

Well it is a true story that I can account for first hand, so there's that..but I've only heard it from one side so maybe there is something more to it who knows. NS pulled the plug on the international piece last year, I asked the NE Rep what the thought process was and he was baffled. Also, CSX entertained the PS traffic going from Worcester to Kearny for a while.

The problem with Pan Am is when you start talking trainloads and not carloads, anything that requires crewing up, adding trains, extending sidings, making some investments, ect then they get cold feet. Remember to run WAAY they just used the WAPO crew and didn't run one, so in reality they didn't even run a new train. This I also know first hand.

newpylong wrote: ↑Sun Jul 26, 2020 2:17 pm I've taken 10 minutes to make a map of owned (red) and trackage rights (blue) of all GWI owned roads should such a full sale be proposed. I think you're on another planet if you think this would not get a serious look. Yes, it could go through with concessions, but it would be scrutinized heavily, at the very minimal.

I recall in the early 60s, shortly after the bankruptcy of the New Haven, there was a proposal to merge the MEC, B&M, and the NYNH&H. Al Perlman of the NYC even offered up the old Boston & Albany to the new railroad. The idea was to form a New England version of Conrail, 10 years early. It obviously never went anywhere, but the basic idea has remained (except without the B&A).

If G&W does buy Pan Am, I can see NS and CN supporting such a transaction, since those two Class I's are the closest allies of G&W. CSX would definitely fight such a merger, saying that New England would come under majority control of a "non-neutral" (hint: NS-aligned) railroad. CP could be swayed to support or oppose such a transaction. VRS would want to seek some sort of condition (direct connection to CP and CSX at Albany, trackage rights over the Conn River Line).

CN9634 wrote:Well it is a true story that I can account for first hand, so there's that..but I've only heard it from one side so maybe there is something more to it who knows. NS pulled the plug on the international piece last year, I asked the NE Rep what the thought process was and he was baffled. Also, CSX entertained the PS traffic going from Worcester to Kearny for a while.

Interesting that both Class Is took a pass. Pan Am usually seems capable of getting one or the other to show interest in new business. Was the traffic terminating on NS/CSX or were they just the bridge lines? Perhaps the rate divisions with the Western road were not satisfactory.



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They were intermodal containers...intermodal is a different ball game. The intermodal groups at Class I's don't like to deal with short lines or anything out of their set plan. Halifax to Chicago is an existing international lane so it is logical that the CN would want and get the business while Portland to Chicago with a new block swap and an additional carrier or two and would require meddling with the existing operating plan. PAR did quietly run some Poland Spring to New Jersey for a summer a couple years ago with CSX...after Hunter they were more flexible.

I think it's notable that the entire situation is such a mystery even now. Nobody really seems to understand why new business opportunities repeatedly fail. Even the old saw of "It's Guilford" doesn't seem to apply to more recent examples.

The Class Is seem decidedly apathetic (or perhaps even quietly hostile) to new business opportunities which would allow Pan Am to grow beyond the box it is in.

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NYC27 wrote: ↑Sun Jul 26, 2020 7:51 pm They were intermodal containers...intermodal is a different ball game. The intermodal groups at Class I's don't like to deal with short lines or anything out of their set plan. Halifax to Chicago is an existing international lane so it is logical that the CN would want and get the business while Portland to Chicago with a new block swap and an additional carrier or two and would require meddling with the existing operating plan. PAR did quietly run some Poland Spring to New Jersey for a summer a couple years ago with CSX...after Hunter they were more flexible.

Yeah they were trying to run them from Portland to Ayer to meet up with the existing 22K/23K, they even ended up draying some down before ultimately changing to CN.

Point stands -- Pan Am has been unable to 'figure it out' (those weren't my words either, someone else high up working directly with them on the intermodal told me that), I have more stories along those lines f you'd like I'd be curious to hear what you have to share too since you've made it a point to refute all mine.

gokeefe wrote: ↑Sun Jul 26, 2020 9:39 pm I think it's notable that the entire situation is such a mystery even now. Nobody really seems to understand why new business opportunities repeatedly fail. Even the old saw of "It's Guilford" doesn't seem to apply to more recent examples.

The Class Is seem decidedly apathetic (or perhaps even quietly hostile) to new business opportunities which would allow Pan Am to grow beyond the box it is in.

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This is a very small handful of opportunities. All regional and shortlines have to play ball with the big guys to move carloads. It's not coincidence that service for several new Pan Am customers starts for a spurt and then stop. This is an example of Occam's Razor at its finest.

Point stands -- Pan Am has been unable to 'figure it out' (those weren't my words either, someone else high up working directly with them on the intermodal told me that), I have more stories along those lines f you'd like I'd be curious to hear what you have to share too since you've made it a point to refute all mine.

That's a little different, I agree about the unable to figure it out part....but figuring out how to get the big guys interested in a small piece of low margin business (this was only 10 boxes a week) is something that short lines across the country are struggling with. It sounds like Eimskip was blaming the messenger. I'm all set with your stories, I've got enough of my own about them to fill a book. ...but I like to be fair as well. I think we can all agree that the ultimate buyer needs to stock the operating team with fresh talent.

gokeefe wrote: ↑Sun Jul 26, 2020 9:39 pm The Class Is seem decidedly apathetic (or perhaps even quietly hostile) to new business opportunities which would allow Pan Am to grow beyond the box it is in.

Every time they try to work with Pan Am on new business, Pan Am fails to pull its own weight. At a certain point, any sane person or business would ask themselves, "Why do I even bother?" I'm not surprised that the Class 1s are feeling kind of "meh" about PAR at this point.

How does all this negativity about Pan Am's inability to run a decent railroad figure into NS's role as a partner or takeover suitor? Is NS so unhappy with the way Pan Am operates that it will buy out their half of the Patriot Corridor? And why haven't they done this already if PAR was that bad? We'll have to wait and see if they care enough about their Portland business by also buying that part of the railroad (POAY).

Also I haven't heard anything lately about the Hoosac Tunnel enlargement. That should figure in here somewhat too I would think.

$64,000 question. I have often wondered why NS didn't pull the poison pill option for PAS. Maybe its
because they had to digest the D&H acquisition first. Who knows. Like others on this thread, I do
know PAR did drive NS crazy from time to time.

bostontrainguy wrote: ↑Mon Jul 27, 2020 11:06 am How does all this negativity about Pan Am's inability to run a decent railroad figure into NS's role as a partner or takeover suitor? Is NS so unhappy with the way Pan Am operates that it will buy out their half of the Patriot Corridor? And why haven't they done this already if PAR was that bad? We'll have to wait and see if they care enough about their Portland business by also buying that part of the railroad (POAY).

Also I haven't heard anything lately about the Hoosac Tunnel enlargement. That should figure in here somewhat too I would think.

I think the short answer is PAS is (nearly) off of their radar and they don't care that much. If they're willing to idle hump yards that were just rebuilt for $160M to please shareholders, I doubt PAS rarely comes into discussion. Laissez-fair is suiting them fine.

I am rather confident they are not going to make a move for all of PAS and certainly not beyond. On the same token, I am just as confident that they have no plans to sell the D&H (south) or Southern Tier. If they are, they certainly haven't passed that on to the engineering department who has put more money into the D&H in a couple years than CP did in 10.

If there is foundation to the later report that we are addressing ten boxes (20 Crowleys) per sailing , with an Icelandic maritime company that I had to go to their webpage to know anything about, might suggest the importance of this business has been overstated st the topic. But I'm not from New England (and I will concede that being a kid growing up in Greenwich, does not give me standing for such) as it appears to be for many participating at this topic.

I still hold that the only reasonable and practical combination with a Class I is with the NS. CSX is out for the Surfboard's competition doctrine. Soo Line, or other US subsidiary such as CP-Maine (if that doesn't simply get folded into SOO) has only a very circuitous physical connection and maybe another with CP-M in Maine. Grand Trunk (CN in the US) has no physical connection, and a "shopping spree" to acquire NS's D&H, ERIE, NKP, and whatever their present arrangement is with PA, seems "just too much" - especially in that coal "is a goner".

Absent PA combining with a strong Class I, all I can foresee for Northern New England railroading is a piecemeal collection of Short Lines with FRA Class 2 (25mph) trackage handling specific commodities such as forest to mill (saw or paper) moves. While CP's only access St. John is the CP-Maine, that still involves two "friendly" Short Lines. Whatever incentive they have to rebuild CP-M to an FRA Class 4 (60mph) road would appear diminished.

NS appears to have the most to lose if PA PA falls into "hostile hands" and they have much to gain by targeting the PAS (the B&M E-W line) to become FRA Class 4 - including digging out Hoosac so as to handle "double stacks" and tri-level auto racks. On that point, while the Boston area may only know Bennies Bimmers and Volksies, I'd guess Northern NE still knows F-150's.