Eastern Railroad Discussion > CSXT purchases Pan Am

Just recieved this notice from CSXT


Dear Valued CSX Customer,
 
We’re pleased to inform you that we have reached an agreement to acquire Pan Am Railways, extending the CSX rail network in New England and providing potential new market opportunities for you and other existing CSX customers. This end-to-end acquisition will increase the competitiveness of CSX’s rail service with trucks by expanding single-line rail service across a larger CSX network.
 
Pan Am is North America’s largest regional railroad, serving customers in six states. The acquisition would expand our network in Connecticut, New York and Massachusetts, while providing our customers with new access to markets in Vermont, New Hampshire and Maine.
 
The CSX Sales and Marketing team is looking forward to exploring new supply chain solutions with you and implementing those solutions once the Surface Transportation Board approves the acquisition, as expected in 2021. We will keep you informed as this transaction progresses, and look forward to connecting with you about the potential growth opportunities made possible by the Pan Am acquisition.


Mark Wallace
Executive Vice President, Sales and Marketing

What happens to NS joint operation between Mechanicville and Ayer (Pan Am Southern)?
Andy

Posted from Android

twropr Wrote:
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> What happens to NS joint operation between
> Mechanicville and Ayer (Pan Am Southern)?
> Andy

Excerpted from Railfan & Railroad's freshly posted news item about the proposal:Word first leaked in early November that CSX was making a move for Pan Am when Norfolk Southern filed a preemptive objection with the STB to any deal between the two carriers. NS has a joint venture with the New England regional called Pan Am Southern that includes more than 400 miles of track in Massachusetts, New York and Connecticut. The venture dates back to 2009 and allows NS to go head-to-head with CSX in the Boston market.“NS is concerned with CSX’s potential acquisition of Pan Am, specifically its interest in PAS, and is further concerned with CSX’s potential use of a voting trust to acquire Pan Am,” an attorney for NS wrote. “One of the main benefits of NS’ and Pan Am’s joint control and ownership of PAS was to strengthen competition with CSX… Any CSX effort to acquire Pan Am would threaten to materially undermine this existing competition, thus impacting not only NS but also rail shippers and other railroads.”The letter also notes that NS was “given certain rights in the event of a ‘change of control,’” including the establishment of a voting trust. As of Monday, the STB had not responded to NS’ objection and it’s unclear if the issues have been resolved behind the scenes. Earlier this month, a CSX spokesperson told Railfan & Railroad that the carrier was working directly with NS to “understand any issues they might have.”

This is incredibly good news for rail freight in New England.  This really changes things and will bring long dormant opportunities back to life.

CSX had an agreement to sell the Massena line from Syracuse to Canada to CN. That apparently fell through so I'll wait and see on this. Would be nice to see an upgrade to Class 2 trackage in Maine.

I wonder if the deal would include the Perma Treat Corporation. I presume Mellon still owns it. The value of the wood ties CSX will need to buy to upgrade the Pan Am trackage might be more than the value of the railroad.



Edited 1 time(s). Last edit at 11/30/20 14:15 by VaCentralRy.

FloridaTrainGuy Wrote:
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> This is incredibly good news for rail freight in
> New England.  This really changes things and will
> bring long dormant opportunities back to life.

Nice to read that it is a good thing when New England gets more CSX.

What does traffic flow out of Maine look like these days? Are we looking at 100 loads daily, or a thousand loads?

Posted from Android

The official CSX press release:   https://www.csx.com/index.cfm/about-us/media/press-releases/csx-to-acquire-pan-am-railways-in-new-england/

Don't just think Maine. With connections to the Irving lines (Eastern Maine/New Brunswick Southern), this gives CSX access to CN traffic from New Brunswick including the Ports of St. John and Halifax.   Pan Am started to rebuild their connection from Bangor, ME to Mattawamkeag this month after CP canceled the Irving haulage agreement to Pan Am in Hermon. As you can see in the video, the trackage needs some work:            https://www.youtube.com/watch?v=7GJSmYCki20&feature=youtu.be

 



Edited 2 time(s). Last edit at 11/30/20 15:25 by VaCentralRy.

Lackawanna484 Wrote:
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> What does traffic flow out of Maine look like
> these days? Are we looking at 100 loads daily, or
> a thousand loads?
>
Closer to 100 than 1,000 south from Portland, for sure. And north of Royal Jct. the Pan Am main is almost entirely 10 mph all the way.

Count me among the skeptics about why CSX is interested in this. Do they really see growth potential in northeastern New England? I'd be interested to hear what it is. Not too long ago, it was rumored that CSX wanted to give up on manifest traffic on the Boston Line by selling the railroad off but retaining trackage rights to operate intermodal trains as far as Worcester. So what's the end game now? Running a PSR monster once a day out of Selkirk to Bangor, Maine and back, with work at every yard along the way?

If NS had any sense, theyd insist on getting the old B&M Mechville to Ayer,  plus some trackage into maine for interchange and online biz.  But NS has no sense, imho, so they will probably just ask for trackage rights. 

Getting rid of Mellon is a good thing, but who knows what CSX will do.  I think the best that can happen is that a lot will get handed off to shortlines.

I also suspect a lot of FOMO going on here.  "If CP is buying into maine and the ports up that way, thre must be something there.  We dont know what, but it must be something"    Big corporate america can be amazingly dumb at times.   Lets just buy something before someone else does.  We'll figure out what to do with it later.

As for that press release...I'd be embarrassed to put my name on a piece of boilerplate bs like that.  I bet my call is important to them, too.

 



Edited 2 time(s). Last edit at 11/30/20 16:02 by pdt.

VaCentralRy Wrote:
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> The official CSX press release: 
>  https://www.csx.com/index.cfm/about-us/media/pre
> ss-releases/csx-to-acquire-pan-am-railways-in-new-
> england/
>
> Don't just think Maine. With connections to the
> Irving lines (Eastern Maine/New Brunswick
> Southern), this gives CSX access to CN traffic
> from New Brunswick including the Ports of St. John
> and Halifax.   Pan Am started to rebuild their
> connection from Bangor, ME to Mattawamkeag this
> month after CP canceled the Irving haulage
> agreement to Pan Am in Hermon. As you can see in
> the video, the trackage needs some work:     
>      
> https://www.youtube.com/watch?v=7GJSmYCki20&featur
> e=youtu.be
>
>  

Halifax? How so? Do you think CN is going to turn traffic over to CSX? And where might that traffic be going?

Posted from Android

Few points to comment on.  First, who will acquire Pan Am’s portion of Pan Am Southern if NS does not want it and how much carload traffic that runs from Pan Am to Pan Am Southern will be diverted to CSX?   Could the STB impose conditions in the form of access to some customers by NS or the SLR for example?  Second, how much of an impact will this transaction be on CP?  They are just getting back into Maine and the Maritimes via the CM&Q purchase earlier this year and are looking to move intermodal trains to the Midwest and Western Canada through the Port of Saint John.  Third, how does affect CN, they still own Halifax, N.S. but some of the Chicago bound intermodal could shift over to Saint John and use CSX.  Fourth, for Irving, both their industries and their railroads, they are a big winners here as they will have three Class Is to compete for the lowest rates for their traffic.

Northern Wrote:
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> Few points to comment on.  First, who will
> acquire Pan Am’s portion of Pan Am Southern if
> NS does not want it and how much carload traffic
> that runs from Pan Am to Pan Am Southern will be
> diverted to CSX?   Could the STB impose
> conditions in the form of access to some customers
> by NS or the SLR for example?  Second, how much
> of an impact will this transaction be on CP? 
> They are just getting back into Maine and the
> Maritimes via the CM&Q purchase earlier this year
> and are looking to move intermodal trains to the
> Midwest and Western Canada through the Port of
> Saint John.  Third, how does affect CN, they
> still own Halifax, N.S. but some of the Chicago
> bound intermodal could shift over to Saint John
> and use CSX.  Fourth, for Irving, both their
> industries and their railroads, they are a big
> winners here as they will have three Class Is to
> compete for the lowest rates for their traffic.

So how does anyone gain traffic out of ST John without the commitment of an ocean line? ST John is a small port with little to no local business to help develop volume. Shippers and Steam Ship lines are going to route shipments to the midwest over ST John for what reason? Assuming you could get a Steamship Line to call on the port, why would anyone route over it? To put your freight on two extremely slow rail routes which offer no economic incentive? This when you can discharge your container a day later in New York/Newark, use two vastly faster routes to the Midwest at a lower cost?

If ST John is why CSX is doing this, this will be the biggest boondoggle on CSX since the block swapping container yard at North Baltimore, OH. As far as carload traffic is concerned, New England's paper industry is pretty lean.

Add me to the sceptics.

Posted from Android

New England is a bona fide part of the NE rust belt.  Too many old brick factories, that have been more expensive to rebuild , than to just start from scratch somewhere else.     NE is  just becoming another big "service industry" bedroom community.  As long as ppl not from New England want to come there to see things that are quaint, and eat fish, I guess the the area will be OK.

Its truly amazing, IMHO,  how much our economy is built on ppl spending money things they dont really need.

I hope NS still has big aspirations for New England and seeks track rights to Ayer, at a minimum.  CSX will only downgrade that line if NS leaves.  The Hoosac Tunnel will be a relic of history.  

I learned in my role as Manager, Planning and Analysis for CPR's Atlantic Region in Montreal in 1980, that you always call it Saint John, NB, not ST John or St. John.   Wonderful territory, just in the past.

Dan Sabin 

...and Dan...do you remember the other "Saint" earlier in your career?  St. Johnsbury, VT. to be exact.

There were plans to transform Saint John, NB into a major deepwater port, not sure what, if anything, has become of that. There were similar plans in ME also, and it is rumored that Searsport is one of the ports, and why CP took over CM&Q. CSX (and Conrail before that) used to be a partner with Guilford Rail Systems(Pan Am's old name) on a intermodal train to Waterville, ME for Canadian bound traffic. Not sure what happened there. There is also the water train, although it is now carried on other trains and not by itself anymore. The paper mills seem to be having a revival of sorts under foreign owners, but who knows how long that will last. I think a lot of the branches in Maine will be spun off, but it really is too early to tell. Either way, forst CP and now CSX, either somebody is betting on something happening in ME or something IS happening and we just do not know it yet.

NYSWSD70M Wrote:
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>
> So how does anyone gain traffic out of ST John
> without the commitment of an ocean line? ST John
> is a small port with little to no local business
> to help develop volume. Shippers and Steam Ship
> lines are going to route shipments to the midwest
> over ST John for what reason? Assuming you could
> get a Steamship Line to call on the port, why
> would anyone route over it? To put your freight
> on two extremely slow rail routes which offer no
> economic incentive? This when you can discharge
> your container a day later in New York/Newark, use
> two vastly faster routes to the Midwest at a lower
> cost?
>

Think on dock rail with no liift-dray-lift costs in a greenfield port with room to expand. Much like Prince Rupert but with Atlantic steamship route growth at the expense of Pacific as imports shift to SE and South Asia from China. Room for DCs too to demultiplex ocean box freight into 53s for inland points.

That's on top of the day saved sailing to NY/NJ and more days to VA or Savannah.

And that's on top of the aforementioned 3 Class 1s choice to hold the rail rates down. Okay NY/NJ, Savannah and (circuitously) VA have 2. And CN is probably putting more of their eggs in the Halifax basket.

Good morning. How many of the Pan Am routes are cleared to handle doublestacks? Are the Irving-owned short lines to St John, NB capable of handling doublestack trains?

Thank you in advance.