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

  • Guilford Rail System changed its name to Pan Am Railways in 2006. Discussion relating to the current operations of the Boston & Maine, the Maine Central, and the Springfield Terminal railroads (as well as the Delaware & Hudson while it was under Guilford control until 1988). Official site can be found here: PANAMRAILWAYS.COM.
Guilford Rail System changed its name to Pan Am Railways in 2006. Discussion relating to the current operations of the Boston & Maine, the Maine Central, and the Springfield Terminal railroads (as well as the Delaware & Hudson while it was under Guilford control until 1988). Official site can be found here: PANAMRAILWAYS.COM.

Moderator: MEC407

 #1534400  by CN9634
 
My impression from Fink is they've already worked out a deal with CP about this. And I think it makes sense, CP is less worried about these local moves and giving Pan Am the trackage rights to Brownville Jct might be a backdoor deal to scratch each other's backs... now we can grease the wheels on some ST-CP routings of forest products, which ST still has a pretty solid book of business on. Imagine the volumes that currently go out POAY/AYPO and the NS connection moving out via CP. I've already heard that CP is planning a second pair of manifest trains in the first year, can't imagine where they would have quickly come up with the traffic to support that...!
 #1534658  by QB 52.32
 
To imagine the volumes that currently go out POAY/AYPO and the NS connection moving out via CP you'd also have to imagine either some big, newfound forest products traffic previously untapped by rail carload, or, CSX, PAR's biggest interchange partner, unwilling, unable or ineffectively pulling any number of levers, positive or negative, to protect their position. And, I find it interesting that PAR would file with the STB if there's a quid pro quo deal already worked out with CP. Why not just execute the agreement?
 #1534690  by bsweep
 
I actually think letting Pan Am traffic move from NMJ-Brownville over CP, either via trackage rights or per the status quo on future CP trains is a win-win-win for Pan Am, CP, and NBSR. Pan Am gets their current status quo and doesn't need to invest the capital to bring Old-Town to Keag in shape. Perhaps someday if/when the Lincoln industrial park is developed they can rehab the line for local traffic south of Keag those 10 miles. For CP, their interest is in expedited service from Montreal to Saint John. Having NBSR stop in Keag to do local work adds at least an hour from Brownville to Saint John. This would allow NBSR to pull and go from Brownville with no local work in Keag, reducing transit times. I expect one of the first changes post STB approval will be on the NBSR with a run through train solely with Montreal-Saint John traffic and another from MNR, probably combined with Pan Am traffic. If/when that happens being able to base all crews in Brownville makes sense for NBSR.
 #1534698  by CN9634
 
QB 52.32 wrote: Sat Feb 22, 2020 7:58 am To imagine the volumes that currently go out POAY/AYPO and the NS connection moving out via CP you'd also have to imagine either some big, newfound forest products traffic previously untapped by rail carload, or, CSX, PAR's biggest interchange partner, unwilling, unable or ineffectively pulling any number of levers, positive or negative, to protect their position. And, I find it interesting that PAR would file with the STB if there's a quid pro quo deal already worked out with CP. Why not just execute the agreement?
What about a more efficient and cheaper routing? The traffic is already out there, more tons will be coming out of the Northeast as well, and more investment expected in the coming years.

I'm no expert on trackage rights, but doesn't the STB have to rule regardless? So why no just do it now and get the deal cast in stone with the STB? That's a smart move by Pan Am and I don't think CP will object.
 #1534736  by PBMcGinnis
 
70% of the traffic on POAY/Q427 comes from the Pan Am served mills in Maine to CSX served customers on the East Coast. And vice versa on AYPO on traffic that brings to Maine the Selkirk connection from Q426.

So it makes no sense to hand off that traffic to CP in Maine nor to NS at Mechanicville. CSX has a larger customer footprint on the East Coast hence more traffic .
So it will be hard for CP to steal traffic they don't originate in Maine. But it will be "game on" for the various Irving companies' traffic that come out of Saint John such as their lumber, oil and paper products going to a CSX, NS or direct CP interchange.

Very little traffic now goes from Maine to Mechanicville for interchange to CP. Most CP traffic out of northen Maine was moving via CMQ before Hoosac Tunnel issues aside, NS is 98% of the interchange traffic at Mickeyville.
So there isn't much for CP to try and siphon away from Pan Am, or to ask Pan Am to short change itself at Northern Maine Junction.

NS only cares about its 4 trains: 16R/11R and 22K/23K,
At the present time with the tunnel outage and the pipeline protests in Canada they seem content to let traffic go via Worcester to CSX rather than capture some short term business via the Detour trains.
So Pan Am is running daily to both CSX connections in MA and NY, including via the VTR detour route. Just look at the size of those trains coming and going via Worcester now. They are running 90-100 cars per train, with extra trains now running. Normally its one 60 car train in each direction, back before the CN and CP were shut down.
 #1534820  by newpylong
 
And to go one step further to your absolutely spot on assessment, that NS traffic is not CP's to steal because the destination/origin for nearly all of 16/11R traffic is PA or points south.

The only effect for PAS I can think of is the paper loads that currently go to CP at Mohawk/Sara, perhaps those may shift north? Not a lot of traffic anymore though.
 #1537537  by johnpbarlow
 
As of 3/20/20, CP submits to the STB its rebuttals to Pan Am's request for trackage rights between NMJ and Brownville and the MM&A's trustee request for conditions on the CMQ acquisition. Unsurprisingly, CP says STB should not agree to either party's requests. Unfortunately any indication of the monthly carload interchange magnitude at NMJ is redacted.

I didn't realize that the haulage agreement that Pan Am management is concerned about here is actually a haulage agreement between CMQ and New Brunswick Southern with the carload revenues going to NBS between Brownville Jct and Pan Am interchange at NMJ. For some reason, I had assumed the haulage agreement was between CMQ and Pan Am with Pan Am getting the revenue between NMJ and Brownville.
In April 2019, CMQR and NBM once again entered into a commercial agreement that provides shippers a route over CMQR between Brownville Junction and the ST interchange at Northern Maine Junction. This is a haulage agreement and the railcars move in the account of NBM, not ST. This arrangement remains in place today and, in my opinion, is serving the shippers well. The ST request for trackage rights over the CMQR corridor appears to be an attempt to nullify the viable commercial agreement already in place. ST has the ability today to work with shippers and NBM to route traffic over its Mattawamkeag Line. Trackage rights over CMQR would be duplicative and unnecessary.
https://dcms-external.s3.amazonaws.com/ ... 300502.pdf
 #1541670  by johnpbarlow
 
As of 5/4/20, STB has officially approved CP's acquisition of CMQ's US ops and in the process has also denied Pan Am's request for trackage rights. Also denied was MMA's Trustee request to postpone the transaction until all Lac Megantic related litigation involving CP is resolved.
STB's door for petitions to reconsider its approval of the transaction is open until May 26 and requests for stay must be filed by June 10.

STB decision effectivity date is June 18, 2020.

https://dcms-external.s3.amazonaws.com/ ... /50223.pdf