• CSX to acquire 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

  • 1279 posts
  • 1
  • 52
  • 53
  • 54
  • 55
  • 56
  • 86
  by A215
 
I was mistaken and spoke a little quickly. Supposedly CSX, CN, and CP were all riding. CSX was on board to discuss interchange only. I'm not sure what relation the other two had to the trip but supposedly the buyer was on board to discuss interchange with the parties.
  by Shortline614
 
Keith Creel said recently that CP isn't interested in purchasing other railroads at the moment. CSX is clearly there negotiating an interchange agreement. That leaves CN as the buyer.

CP would clearly want some concessions from CN, which is why they were on board.
Last edited by MEC407 on Thu Oct 01, 2020 8:19 am, edited 1 time in total. Reason: unnecessary quoting
  by Rockingham Racer
 
bostontrainguy wrote: Wed Sep 30, 2020 7:43 pm CSX/NS joint venture? Does that make any sense? A CONRAIL type feeder to both?
PASA: Pan Am Shared Assets :-)
  by newpylong
 
A215 wrote: Wed Sep 30, 2020 10:13 pm I was mistaken and spoke a little quickly. Supposedly CSX, CN, and CP were all riding. CSX was on board to discuss interchange only. I'm not sure what relation the other two had to the trip but supposedly the buyer was on board to discuss interchange with the parties.
This is correct, and there was thought to be a 4th non-class I entity among the mix on this trip.
  by nomis
 
RR,
I was going to say Conrail Shared Assets New England :grin: :laughing:
Last edited by nomis on Thu Oct 01, 2020 10:18 am, edited 1 time in total.
  by Shortline614
 
bostontrainguy wrote: Wed Sep 30, 2020 7:43 pm CSX/NS joint venture? Does that make any sense? A CONRAIL type feeder to both?
Norfolk Southern gets PAS while PAR becomes apart of CRSA? That would be rather strange but very interesting.
  by A215
 
newpylong wrote: Thu Oct 01, 2020 5:39 am This is correct, and there was thought to be a 4th non-class I entity among the mix on this trip.
More than likely Brookfield AKA G&W. I believe that is the investment firm that I've been mentioning is still in the running.
  by GuilfordRailSD45
 
First of all, thank you all for this excellent thread & community - I've been lurking in this thread daily since the sale announcement earlier this summer. I've thoroughly enjoyed the discussion & commentary and have learned a lot, especially from those of you connected to the industry, both past and present.

If in-fact CSX, CP, CN, and a non-Class I entity (i.e. G&W/Brookfield) were aboard - and if in-fact one of them is the buyer, and the other 3 were there to discuss interchange (i.e. CSX, and almost certainly CP) - then I'm clutching my "Maple Leaf Special" ticket along with gokeefe… because CN is the only one of the bunch without an existing direct interchange(s) with Pan Am, correct?

There are 2 caveats to this theory that I can think of:
1. Is it important to consider CN’s existing indirect interchanges with Pan Am (listed as Saint John and Danville Junction on the ST Routing Guide) for this discussion?
2. Could there be some serious, out-of-left-field backroom activity going on with, say, a CN acquisition of NECR/P&W/SLR from G&W - enabling G&W to swing in for Pan Am?

Finally, if the buyer was indeed on-board, I can't help but wonder if we can expect to see an announcement within the next week or two. Granted, I imagine there are lots of intricacies to these sorts of transactions that could potentially delay an announcement... and of course, an STB filing will ultimately be the "proof in the pudding".

I appreciate the opportunity to share my thoughts - and please forgive & correct any flawed logic. Whatever ends up happening, I hope that existing Pan Am employees fare well. I'm as excited as the next buff to potentially see a Class I coming through town, but I've met a lot of great Engineers, Conductors, Dispatchers, MOW Workers, etc. in my 20+ years railfanning Guilford / Pan Am, and I hope they're all treated with great respect by the new owner.
  by newpylong
 
I think it is perfectly within the realm of possibility to see a CN acquisition of the SLR if they move to get PAR to provide a direct connection with the rest of their system. The SLR has been known to be unofficially for sale for quite some time. It is a marginal at best railroad since CN dropped intermodal to Auburn. It could have quite a lot more value as a path to and from other points on the MEC.
  by Shortline614
 
CN has said in the past year or so that they want to grow their revenue through acquisitions. If SLR/SLQ has been put unofficially up for sale, I bet that CN would buy it as a way to get direct access to the Post-Mellon Pan Am.

If CN does by Pan Am, then SLR/SLQ, then the STB might mandate that they would have to give trackage rights to CP or NS into Portland to keep competition.
Last edited by MEC407 on Fri Oct 02, 2020 7:34 am, edited 1 time in total. Reason: unnecessary quoting
  by Gilbert B Norman
 
Mr. Steve SD-45, I'm pleased you have chosen to join this discussion. From reviewing your posting history, it would appear you are a 26yo and a college graduate.

When I was 26yo, I was in the USAF and serving in 'Nam. I too am a college graduate (also a CPA) and had an eleven year career with the MILW "jumping the sinking ship before the lifeboats were filled". While I've never been a "hard core" railfan (with more pre-A-Day and overseas miles than I will ever have on Amtrak), I continue to follow industry affairs and am "long UNP".

I still "clutch my $2 ticket on Topper (NS)" (I can go to "The Meadows" for a seminar, put, say, $100 in my pocket, go to the tables, and when "its gone, I'm gone"). I cannot foresee CN getting Pan Am; they have no physical interchange and sold the one they had (Grand Trunk) to a short line that eventually "got crushed by the Orange squeezer" (G&W). So far as the suggested possibility around here of the CN acquiring all the G&W New England properties, the Surf Board (STB) will say "no way". Since '95 (or your lifetime, Mr. Steve) the Board clearly favors competitive rail (look at some of the trackage rights and "open" industries that came about from the latest merger movement). Appointments by four different POTUS' - including the incumbent - have upheld that philosophy. That is why I hold CN "not likely" and CN-G&W NE properties-PAR "no way".

For what it be worth, I don't think Timmy cares who gets his rather run-down railroad with its largely (non-passenger) FRA Class 2 (25mph) trackage. He simply wants an Ambassadorship or whatever during a Trump second term - and, as the Wall Street Journal has reported, he's laid down the loot already to buy that ticket.
  by backroadrails
 
A215 wrote:
newpylong wrote: Thu Oct 01, 2020 5:39 am This is correct, and there was thought to be a 4th non-class I entity among the mix on this trip.
More than likely Brookfield AKA G&W. I believe that is the investment firm that I've been mentioning is still in the running.
Brookfield already did a highrail tour a few weeks back. It was also thought that Fortress was expressing a interest, which is surprising seeing how recently they dumped CMQ, but with the current state of the aviation industry (Where they planned to spend the profits earned from the CMQ sale) it would make sense that they would be interested in re-entering the rail market.
But the question still stands, why would CN try to buy Pan Am? CN already has a presence in St. John and it would be much easier for them to expand their current operations if they are trying to compete with CP by stealing IM and auto traffic. The only other traffic Pan Am currently produces is mainly from smaller industries, with the exception of 3 or 4 active paper mills, as well as bridge traffic from CP at NMJ, which with the planned upgrades to Keag, gives the idea that CP is ending haulage in the future. I could understand if Pan Am had a deep water port which capacity that St. John has, CN would be interested, but for the price Pan Am is wanting I don't see CN biting for the current traffic. I could see a Class 1 (NS) buying to Ayer or Portland with a shortline or regional operator taking everything east of District 2, but giving a Class 1 trackage rights to keag to potentially get IM from NBSR. If CN is looking to buy Pan Am to increase traffic, it seems like it would be easier for CN to upgrade a port like Halifax with the same money they would spend on the Pan Am sale to compete with CP's port at St. John.
  by Gilbert B Norman
 
backroadrails wrote: Fri Oct 02, 2020 4:35 pm ......would be easier for CN to upgrade a port like Halifax with the same money they would spend on the Pan Am sale to compete with CP's port at St. John.
Mr. Backroad; CP, Saint John, what am I missing?

When they sold most of the CP-M to Eddie, who took Megantic off the map, they sold the access to Saint John to two Short Lines comprising New Brunswick Southern. The only "main line" rail Saint John has is the CN with its circuituous routing through Moncton.

I have my $2 on Topper, because if there is to be real competitive access in that region, boundaries notwithstanding, there has to be a road with the financial resources and existing route structure to envision a "main line to the Midwest". That recognizes that intermodal and anything else of value moving 500 miles or less, will be on the highways to destination.
  by newpylong
 
The "latest" out of Iron Horse is the odds are now even higher that it's being sold to an investment firm. Not Brookfield because Mellon would never sell to them (bad blood) but they are very interested.
  by johnpbarlow
 
I don't know how relevant this recently published STB finding re: Revenue Adequacy of US Class 1 RRs is to the ability/willingness of CN, CP, or NS to acquire all or a piece of Pan Am. There are 7 Cl 1 RRs: UP, BNSF, NS, CSX, KCS, Soo (CP's US ops), and Grand Trunk (CN's US ops) and STB found that five of these RRs (BNSF, UP, NS, CSX, and Soo) "achieved a rate of return equal to or greater than the Board’s calculation of the average cost of capital to the freight rail industry [9.34%]." CN missed this ROI threshold at 7.47% while NS and Soo exceeded the 9.34% mark with 11.59% and 11.34%, respectively.

So I guess the question is how much more do NS, CP, and especially CN want to spend acquiring a class 2 US RR that claims to be profitable but operates a franchise with limited economic potential and will require much capital investment going forward?

https://dcms-external.s3.amazonaws.com/ ... /50374.pdf
You do not have the required permissions to view the files attached to this post.
  • 1
  • 52
  • 53
  • 54
  • 55
  • 56
  • 86