CSX Acquisition of Pan Am Railways

What I find more fascinating in the "cement conversation" is how that highlights the potential competitive issues of this play by CSX. I would think that CQ, CN and CP would all raise issues about the long-term potential competitive affects of CSX favoring cement sourced from longer-haul origins, like out of MD, over Quebec origins through short-haul gateways. I don't have a complete understanding of the cement market, so I can't fully gauge the competitive impacts, but find it fascinating in highlighting potential factors with how this deal might go down amongst the affected Class 1's, including gateway protection, horse trading, or, even, what the ultimate outcome looks like.

So apparently this industry located near Quebec City generates enough traffic consigned to the Pan Am service area to "crow about"?

https://cimentquebec.com/

Even if I'm not a linguist in this life, I certainly know that rail is and will be the only reasonable and practical means to transport the stuff in any volume - and even if it spills on Pan Am's lovely Class 2 track, you just sweep it up and likely salvage 95% of it.

Finally, I guess getting the raw materials to this facility is CN and CP's concession:

https://www.cement.org/cement-concrete/ ... nt-is-made

QGRY's deal doesn't give them much influence on price and therefore routing. If they did, you can bet all the traffic it would be moving via Danville Jct. all the time so they could cut SLR/SLQ in.

newpylong wrote: ↑Mon Feb 22, 2021 8:48 pm Haulage (if a party feels they are being unfairly subjected in one way or another) absolutely may come under the purview of the STB. The most recent example is CP vs PAR re: NMJ

If you're referring to PAR requesting a condition for the CP sale, you are misinterpreting the ask: The condition was the conversion of haulage rights to TRACKAGE RIGHTS, which IS an STB deal. Here is a quote from the decision:

Applicants argue that the condition ST requests—converting a voluntarily agreed-upon haulage agreement to a regulated trackage rightsagreement...

Note the former is voluntary and the latter implies STB oversight.

If this is not what you're referring to, could you give more specifics?

Thank you I definitely misinterpreted the filing. I believed they were simply asking for the status quo ie CP hauling their tonnage between NMJ and Brownville as the CMQ did. I commented several times in that thread and was under that impression. Oops.

The historical irony here is that for many years Mattawamkeag to the ME/NB border was Canadian Pacific trackage rights over Maine Central property. Odd to see the situation (potentially) completely flip.

True!

Newpy, what I also found interesting is that the old haulage agreement was between CMQ and "NBM Railways". PAR was not party to the agreement.

You learn something new every day.

One other thing to consider is that Saint John, NB is officially an ST station, so how can that be reversed unilaterally?

Gilbert B Norman wrote: ↑Tue Feb 23, 2021 7:56 am Finally, I guess getting the raw materials to this facility is CN and CP's concession:

It appears that I am mistaken; this cement producer is located on the former Canadian Pacific Montreal-Quebec City line (route of "The Viger" and "The Frontenac"), now a Genesee & Wyoming property - the Quebec & Gatineau Railway.

Apparently from this discussion, it appears this traffic is worthy of consideration. Earlier, Mr. "New England States", aka NYC 27, noted a routing using the Grand Trunk, apparently now a G&W road. Is there a physical connection between these roads?

Is this cement traffic worth waking Chessie up from her "Catnap"?

Enquiring mind wants to know.

Cement is a high car volume, but low profit, piece of business. Not worth going to war over when you are the size of CSX. As an independent, smaller Class 2 like Pan Am, it is something you fight to keep on your rails with the longest miles possible. If for example cement started moving Danville Junction down to Boston, it would turn most of the 144 mile trip into just a big switching chore, making it less attractive (profit wise) for the carrier doing the work. Hauling it 200 miles from Mechanicville to Boston on the other hand, increases the miles and spreads out some of the fixed costs associated with the local switching at destination.

I think the CSX strategy is pretty clear here— carload growth and intermodal with highway to rail conversions. They have basically said that over and over the past few years. Once the PAS intel’s are resolved it’ll be a pretty straight forward Worcester to Keag addition. Anyone who thinks CSX is gonna show up day 1 and materially threaten CP on a large scale is joking, CSX has YEARS of line upgrades to complete to compete. CN has the most to lose from both, having a foothold in Atlantic Canada for many years. CSX I think is more customer penetration rather than market development like CP, who is bringing a new book of business to the ports.

CP I could see purchasing the Brownville to SJ mainline, and letting Irving run overhead rights to support their operations, as well as continue to service local customers. CP staked a lot on this, and I don’t think theyll let the final 200 miles fall in Jeopardy over what they’ve already done in a short time... they’ll have Maersk at the end of the year in SJ in addition to Hapag, so that all together with autos and domestic intermodal will be its own train. Irving keeps a tidy class III outfit but the volume will take off and need for more longevity in the infrastructure will show through in short time.

CN9634 wrote: ↑Wed Feb 24, 2021 9:03 am Anyone who thinks CSX is gonna show up day 1 and materially threaten CP on a large scale is joking, CSX has YEARS of line upgrades to complete to compete.

I guess that depends on what your definition of "compete" is. You can be sure that anything that CP handles today in or out of the Maritimes or the Irving roads in general that originates or terminates on CSX is going to go CSX direct with or without any upgrades. Same thing with CSX/CN traffic to or from the Irving roads.

Maybe... but the customer routings are already established and it takes time to revisit and recreate those with ops/sales working through the new structure. There will be a large amount of operational integration and infrastructure upgrade work to be done beforehand too, last thing you want is to switch a bunch of business over day 1 and fumble it. Easy to say on the outside looking in but institutional integration does not happen overnight.

Unless the business is moving under some type of long term contract (which is not all that common anymore), then it's moving under a simple rate quote that can typically be cancelled on 30 days notice and which furthermore does not have a volume guarantee. I'm not suggesting that day one you're going to see an immediate flip on all this traffic, but Pan Am already handles traffic in this lane to CSX so it isn't like they have to reinvent the wheel on this service lane. Sure, out of the gate the CSX single line service may not be the fastest way out of the Maritimes, but you would be surprised how much shippers are willing to put up with when it comes to saving money.

Carload and intermodal are the future e for csx. Coal and much of the rest of the hydrocarbon business is being squeezed into ultimate extinction by government policy. So no coal, no frac sand, no crude oil and even no propane move by rail in the future. There is a move to use more forest products for building instead of concrete and steel for similar reasons. Maine has tons of forest

Back on SJ, when did maersk announce a move to SJ from Halifax/CN? I have seen nothing publicly announced