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  • CSX Acquisition of Pan Am Railways

  • 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

 #1548453  by roberttosh
 
Plain and simple, existing Pan Am traffic flows just don’t fit well into CP’s network. From a class one perspective, both CSX and NS make much more sense. CMQ, even with its’ lack of business compared to Pan Am, is a much more strategic acquisition for CP.
 #1548459  by b&m 1566
 
Where is the incentive for CSX or NS, to even want to buy Pan Am? I've read that CSX wants out of NY and everything east of it and I've read NS is happy with what they have in Pan Am Southern and are not looking to expand. Even if CSX or NS wanted Pan Am, would the feds allow one railroad to control everything? I've read every post in this thread, I just don't see how Pan Am's system would fit with one of the Class 1's. Are there any other Class II railroads that could conceivably be interested? Going by what people have written, Pan Am doesn't fit Irving's business model so are they out? Could we potentially see a yet to be born company (a group of investors for example) come in and purchase Pan Am, "as is"? A purchase of this nature, seems to be the more plausible outcome, in my non-professional opinion of course.
 #1548460  by bostontrainguy
 
b&m 1566 wrote: Wed Jul 22, 2020 4:37 pm Could we potentially see a yet to be born company (a group of investors for example) come in and purchase Pan Am, "as is"? A purchase of this nature, seems to be the more plausible outcome, in my non-professional opinion of course.
I was thinking the exact same thing today. Could someone like Jon Delli Priscoli get a bunch of investors together and operate Pan Am as is? He has done wonders with the almost dead G&U. Just think of what the same skill, interest and drive could do with Pan Am.
 #1548461  by QB 52.32
 
The potential value a GWI purchase of PAR/PAS (half or whole) could generate makes it a good candidate. The only condition of a sale to GWI might be to VRS for access to CSX and NS via PAS (if they don't already have it), not a big deal, and given CSX's New England market share lead, concern of a GWI monopoly is a non-starter. There's a good chance the 4 Class 1's would at least be neutral to a GWI purchase with a good case that could be made to the region's politicians as well.
 #1548463  by Cosakita18
 
It seems like CN is the only class I left on the table...and for them buying PAR makes no sense without also acquiring another railroad. Doesn't necessarily seem like a realistic proposition.

I still suspect that there will be some minor slicing and dicing of the system Even if PAR is just "under new management"

It's again worth pointing out that any new owner has a big uphill battle just to maintain everything east of Waterville to Class 1 standards...let alone class 2 or beyond. That's going to require lots of resources and deep pockets.

Finally, Right now the eastern end of the system is basically an operational black hole. The fact that it can take three to four days for a carload to get from the border of New Brunswick to the border of New Hampshire kills a lot of growth prospects . I can see how that alone would scare some parties away.
 #1548466  by MEC343
 
Food for thought, but when you look in the current car routing system at cars that are being routed from ST to CN through the SLR at Danville, the SLR isn’t mentioned at all. It only says that the routing is ST-Danville Jct-CN...
 #1548467  by roberttosh
 
b&m 1566 wrote:Where is the incentive for CSX or NS, to even want to buy Pan Am? I've read that CSX wants out of NY and everything east of it.
This rumor has been floating around for years and don’t count on it happening anytime soon or most likely ever. The B&A is a major intermodal/auto corridor for CSX and still one of their busiest lines outside of the iron triangle. Highly unlikely they walk away from one of the biggest metro areas they serve, with 15 million people squeezed into the 6 New England states. They operate numerous “main” lines that handle only a fraction of what moves over the B&A that would be candidates for sale long before the B&A.
 #1548480  by roberttosh
 
That’s a very good point in that it’s not like they’re going a lot of empty miles for all that business (the opposite of say CP’s former Montreal to Saint John main). Selkirk to Worcester is @ 150 miles of well maintained railroad and there is just no economic case that can be made to show where it would make sense for CSX to jettison that line.
 #1548507  by bsweep
 
I think CN has quite possibly answered the question of their interest in Pan Am based on their announcement yesterday to sell off thin routes of the old Wisconsin Central. If a class I is going to make a play (or even part of a play) I think I will go to the track and gamble on ponies with Mr. Norman. I still maintain D1 makes shortline (Irving?) sense as if CN isn't interested in their Wisconsin/UP network I can't imagine NS wants a less lucrative, more run-down property...
 #1548516  by newpylong
 
The fact of the matter is that despite over 30 years of neglect and marginalization, the ex-B&M still has tremendous potential. The B&M serves the northern tier of MA and southern ME which still has a good density of industry that is viable for rail service one way or another. It will still be the natural outlet for most if not all ex-MEC traffic. Most if not all marginal routes have been jettisoned. Pan Am is currently turning a profit being run like a two bit operation, there is plenty of room for growth for someone, or for multiple parties that are serious about railroading. The yards need serious work (ie they should all be bulldozed and rebuilt from scratch. The fact that you have to specify a track for 5 MPH is a joke), but the mainline is in as good of shape as it ever has been post strike. The FRA train did a number on it a while back but before that it was 25 MPH from Wachusett to Mechanicville. Yes it will cost some coin to move up to Class 3, but a solid Class 2 like the ex-CMQ is not far away and could immediately move freight dependably.

All of these reasons are why I think they will have substantial interest and fetch a decent price, on that section at least. As for north of Portland, who knows what will happen or who it makes sense for me.
 #1548524  by Gilbert B Norman
 
Just a few random thoughts.

I think Megantic really "did a number" on railroad transportation up that way. Yes, Megantic is in QC, but that "sorry-hind quartered" incident could just as easily happened in Maine, for X the border and you had FRA Class 4 track :P :P (yeah, huh).

To what extent can the E-W B&M right now handle double stacks and auto racks? Doesn't Hoosac Tunnel have different ideas about that?

How much is the "marketing arrangement" really worth to NS? It seems like, especially when compared with CSX and their NYC-Selkirk-B&A, anything from the Midwest would be (predecessor roads for clarity) would be NKP-Buff-ERIE-Bingo-D&H-M'ville-B&M, they are at a circuitous disadvantage. From the South, N&W-Hagerstown-PRR-???-LV-Binghamton-D&H-M'ville-B&M. What's in it for NS to dump Topper's oats into making the B&M into an FRA Class 4 road?

The STB obviously wants competitive routings maintained into markets where they previously existed. Shippers want them too. CN has no physical interchange, CP only a circuitous via Canada (well, if you call their tenuous trackage rights over the West Shore to access CRSA in New York a viable routing - talk about a set-up to get cars "lost"!!!!). A Short Line with FRA Class 2 is "not exactly" serving shippers other than the "forest to mill" type traffic.

Final thought, are there any major retailer Distribution Centers (Wally World, Amazon) in Northern Maine? With decent rail service, would they keep their trailers on the rails to such a destination? Same applicable to handling autos as well as other high value traffic.

So; anyone?
 #1548528  by newpylong
 
Gilbert B Norman wrote: Thu Jul 23, 2020 1:18 pm What's in it for NS to dump Topper's oats into making the B&M into an FRA Class 4 road?
Not much - not enough tonnage. But the B&M was traditionally Class 3, which NS now has their section of the D&H up to. That's all I would imagine anyone doing with it. PAS even was Class 3 briefly in 2009-2010 when NS dumped all the money in. Then it slid back to 1/2 never to return.
 #1548529  by Cosakita18
 
Gilbert B Norman wrote: Thu Jul 23, 2020 1:18 pm
Final thought, are there any major retailer Distribution Centers (Wally World, Amazon) in Northern Maine? With decent rail service, would they keep their trailers on the rails to such a destination? Same applicable to handling autos as well as other high value traffic.
Not really, at least nothing that is scalable for rail-based logistics. The biggest distribution and logistics center operation anywhere north of Portland is the Walmart distribution center in Lewiston, and that's on the smaller side of logistics facilities they operate. FedEx and UPS obviously have their own distribution centers but again, their operations don't scale to a point where intermodal is a viable proposition.

The current physical condition of D1 makes high priority intermodal a "Dead on arrival"concept.
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