• Pan Am Railways For Sale?

  • 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

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  by MEC407
 
I would assume so, otherwise the railroad would be worth a lot less than what some folks have estimated.

That's a good segue for something else I've been thinking about: whether or not the future owner(s) of the railroad(s) will continue to keep Boston and Maine Corporation and Maine Central Railroad Company as active legal entities, or if they'll be reorganized in some way. The same question also applies to subsidiaries Springfield Terminal Railway Company and Portland Terminal Company.
  by Gilbert B Norman
 
Yes, this propaganda would suggest that JD Irving wants a "first class" railroad, but really what need have they for the leased Bangor & Arroostoock and the East End of the Maine Central beyond handling "Products of Forests" to St. John maritime facilities?

What if those shippers wanted "to be in the game" to sell product in markets to the West. With well established rail lines handling lumber product from the Pacific NW, what chance have they?

Would JDI even care about having, and maintaining, the competitive E-W routing that NS and the "marketing arrangement" with PA provide?

Finally, regarding a buyer continuing to maintain any of the existing subsidiaries, look to their existing labor agreements. If any are more favorable than those agreed to at Conference (National handling) level, look for that subsidiary to be retained.
  by J.D. Lang
 
I am really starting to come around to thinking JD Irving would be hard pressed not to have a serious look at purchasing the lines north of Ayer. The benefits would be many and likely the STB would not have any serious beef regarding access to multiple carriers - in fact it would improve. With Irving's CN connection to the north and CP at Brownville and NS and CSX plus SLR they could provide service from any mill to any road.
That’s why I stated up a few threads that the Irving's could have a very good opportunity here to open up new lanes to move their products out and have opportunities to bridge intermodal to other connections other than CP.
But then "enquiring mind" wonders what rail combinations would provide such as well as where would FRA Class 3 (40mph to be something competitive with highway transport) track come from?
That is the problem if a regional like NBSR takes over from Ayer to Keag. Right now if they could bring speeds up to a consistent Class II from Keag down to Royal Junction that would be a huge start. But that would probably require a complete rebuild of the Keag line from the surface up plus bringing that section up to 286,000lbs. then an extensive rebuild from Waterville to Bangor. After that they would have to get rid of the speed restrictions from Waterville down to Royal Junction. From there all the way down to Lowell Jct. below Lawrence is already Class III or IV. Would they commit to something that massive. I guess that time will tell.

Of course this assumes that the railroad would be split at Ayer. Pan Am (Guilford) has always had an agreement going back to the old SENE/NESE manifests of Conrail that Conrail would do all of the blocking of Northern NE traffic at Selkirk for traffic heading to the Mid West and South East. I assume that arrangement is still in place with CSX. If NS does take control of the Patriot corridor then Northern NE traffic has another avenue to travel west and south.

I still don't think it would be good idea for either CN or CP to take control of the full Pan Am system. I understand that a class ones resources would be better able to tackle that infrustructure problems but in the long run I don't think its in the best interests for Northern New England.
  by S1f3432
 
I wonder if Irving really wants to become a larger rail operator than they already are. When CP attempted
to abandon the line to St. John, the portion in New Brunswick was a long term leased property with Irving having acquired ownership of the parent company years earlier. Irving reclaimed it's property and assumed operations as it supported other Irving owned operations. Acquiring the line from Vanceboro to
Brownville Jct. was just good business as it gave them another connection so as not to be totally dependent on CN. Irving is one of the largest- if not the largest owner of forest lands in Maine and much
of that wood is destined for mills in New Brunswick. The Maine Northern, which operates former BAR
track leased from the State of Maine, moves this wood with a fleet of captive cars to Irving mills in
a way similar to the mill owned common carrier logging lines that used to exist out west. The other
traffic from other customers along the line contribute to the viability of the line. These rail operations
all help support Irving's other operations and expanding into southern Maine and beyond might be
beyond the scope of where they want the company to be.
  by gokeefe
 
It's not out of the question for Irving to be interested in a 100% New England operation. Ayer is probably "just far enough". Even Mechanicville is reasonable ... I have to agree that the Irving family is probably giving this one a really hard look.

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  by CPF363
 
Pan Am is going to select an offer that they know will be able to get approved to purchase the railroad considering how long it takes get through the STB. The approval period could take up to twelve months from offer to operating the system.
  by BandA
 
Irving has shown they can operate small railroads. PanAm Railways is supposed to be continuously profitable, so why not buy something that is profitable? And not have to worry who else might buy it...

Whoever buys it, ME & NH should buy the track they need for passenger service or anything they plan to abandon. Would make the transaction cheaper, NNEPRA would have more certainty, and it is likely whoever buys it now won't keep it for 40 years like Guilford has. Freight would retain all freight rights, dispatch, get free upgrade to passenger-grade track, not have to worry so much if the track is underutilized. NNEPRA could hire whatever vendor they wanted to run the Downeaster: Keolis, Amtrak, Conway Scenic, Iowa Pacific, even Milford-Bennington.
  by Gilbert B Norman
 
Messrs. S1F and O'Keefe have established that JDI's interests center around getting their "Products of Forests" out of Maine and to their mills in New Brunswick. Apparently they have existing rail to do so, and if such is only Class 2 (25mph), that's all they need.

We have established for competitive reasons, neither Canadian, and lack of much in the way of a physical interchange, is going to get PA. Chessie would have a monopoly for anything moving in or out of New England with both E-W routes in her paws.

It all leads to Topper galloping to the rescue; he's the bobtail nag for whom I'm at the window to place my $2 bet.
Last edited by Gilbert B Norman on Wed Jul 08, 2020 11:01 am, edited 1 time in total.
  by newpylong
 
BandA wrote: Tue Jul 07, 2020 5:51 pm Irving has shown they can operate small railroads. PanAm Railways is supposed to be continuously profitable, so why not buy something that is profitable? And not have to worry who else might buy it...

Whoever buys it, ME & NH should buy the track they need for passenger service or anything they plan to abandon. Would make the transaction cheaper, NNEPRA would have more certainty, and it is likely whoever buys it now won't keep it for 40 years like Guilford has. Freight would retain all freight rights, dispatch, get free upgrade to passenger-grade track, not have to worry so much if the track is underutilized. NNEPRA could hire whatever vendor they wanted to run the Downeaster: Keolis, Amtrak, Conway Scenic, Iowa Pacific, even Milford-Bennington.
It may have been continuously profitable for them (Pan Am) perhaps, but not for whomever buys it right off the bat. Remember they've had the whole thing since 1983. It's a sunk cost by now. A new buyer needs to look long and hard at the payback period and how long before it can be profitable for them.
  by newpylong
 
J.D. Lang wrote: Tue Jul 07, 2020 1:02 pm
I still don't think it would be good idea for either CN or CP to take control of the full Pan Am system. I understand that a class ones resources would be better able to tackle that infrustructure problems but in the long run I don't think its in the best interests for Northern New England.
Customers already have an option to ship with NS (via PAS), they do not need to take control of the entire corridor to gain that opportunity. There is a negligible rate to move via PAS to NS (D&H). NS will have to look hard in the crystal ball to see whether it is worth investing further in this region. Personally I can't see them executing it. They've been in PAS for 10 years now and the status quo seems to be the extent of their appetite, even with owning the D&H South End.
  by Cosakita18
 
Question: Since MEC and B&M still technically exist on paper, could a shortline or holding company buy the rights to those companies individually and operate them?
  by MEC407
 
In theory, yes, if Mellon was willing to sell them that way.
  by PBMcGinnis
 
NS has had 10 years to buy Pan Am. They haven't and they won't. Second, look at what traffic moves West to Mechanicville versus through Worcester going West on CSX. That will tell you who has the better rates to the Midwest and Southeast.

Irving now has both CN and CP cuddling up to them. Why buy Pan Am in part or in whole and spend money on infrastructure upgrades when you can let CN and CP beat the crap out of each other over rates. Outside of Irving, there is not much traffic to attract investment into the line to Keag.

CSX got out of Boston, they don't want back in.

Splitting Pan Am up will attract more STB oversight and red tape.

All that and right now hard to sell high when the economy is still recovering.
  by gokeefe
 

Gilbert B Norman wrote:We have established for competitive reasons, neither Canadian, and lack of much in the way of a physical interchange, is going to get PA. Chessie would have a monopoly for anything moving in or out of New England with both E-W routes in her paws.

It all leads to Topper galloping to the rescue; he's the bobtail nag for whom I'm at the window to place my $2 bet.
I think NS has the same regulatory problem as CSX. They both operate a Massachusetts trunk line. I have to agree that the Canadian Class Is seem like strange suitors but if a Class I is in the cards then it has to be CN or CP. For the sake of discussion I'm assuming that BNSF, UP, and KCS are "out of the question".

G&W also seems unlikely given regulatory issues with their control of SLR, NECR and P&W.

Watco remains a very intriguing possibility.

Fortress also seems like an obvious suitor and given the closing of their sale of CMQ to CP they have cash inside their rail division. There could be favorable tax implications to reinvesting it within the same year. I can see their rail people salivating over the prospect of a much bigger fish than CMQ. Because of their growth driven approach with a focus on creating new value to facilitate a profitable exit they are potentially the very best possibility.



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  by Gilbert B Norman
 
Well PBM, I see you made it out of "the clink" to share your thoughts here.

It would appear, both on the strength of your thoughts, and those of Mr. O'Keefe, that neither Class I, NS or CSX, has interest in PA. That Boston is about the same traffic source as is Greenwich CT, which had a house track to Greenwich Coal "back in my day", nowadays. Passenger trains yes, but there is both a Regional and Intercity agency for that.

So a "disingenuous" Short Line operator or a non-rail "raider"? Neither sounds too good for a shipper who wants something that could pass as "reliable service".
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