What's next for MMA?

Discussion of present-day CM&Q operations, as well as discussion of predecessors Montreal, Maine & Atlantic Railway (MMA) and Bangor & Aroostook Railroad (BAR).

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What's next for MMA?

Postby MEC407 » Tue Jul 09, 2013 11:01 am

In today's Bangor Daily News:

Bangor Daily News wrote:The derailment and fire that devastated the center of a small town in Quebec on July 6 is among many significant events in the 10-year history of Montreal, Maine & Atlantic Railway.


What follows is basically a timeline of the history of the company. Read more at: http://bangordailynews.com/2013/07/09/b ... c-railway/
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Re: Oil train disaster in Lac-Mégantic, Québec 07-06-2013

Postby bobw59 » Sun Jul 14, 2013 9:23 am

I am not directly in the railroad business. However, I have followed the MMA since day one and I fully expect this disaster will prove to be the end of it as a company. I would think that the Irving organization would be a prime candidate to buy that trackage if we do see the end of MMA. I just can't see that CP would buy this property since they were the ones that owned it in the first place and did not feel it fit, and that was when it ran all the way to St. John. As for interchanging the oil with PAR at Mechanicville and then up to Mattawamkeag (not Eastport), would not it make more economical sense to ship from Montreal to St. John over the CN?
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Re: Oil train disaster in Lac-Mégantic, Québec 07-06-2013

Postby Gilbert B Norman » Sun Jul 14, 2013 9:53 am

Mr. BobW, an originating road, absent a Shipper's routing, will route traffic to give itself the most favorable line haul possible - that is only common sense.

It would appear that a routing to Mechy on home (or its US Sub) rails would result in the most favorable division. If the proposed rail to Albany, then waterway and ocean transport to St John were to move forth, that would likely be the rail routing for CP originated oil.

Now there is the possibility that CP may give the MM&A properties a second look - costs of rebuilding to at least Class III notwithstanding. When the decision to bail out was made, North American crude was simply in its infancy (geologists have known it was there for at least 100 years; I knew it since taking Geo 101 during 1962. At even $60bbl it just was not economical to extract). At one time the Irving Oil refinery was receiving shipments by ocean carriers from the Middle East - now the tide has turned and they are exporting refined Canadian oil from there.

So Canadian Pacific just may take that second peep.
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Re: 10 years of highs & lows for Montreal, Maine & Atlantic

Postby MEC407 » Sun Jul 14, 2013 10:46 am

From The Portland Press Herald:

The Portland Press Herald wrote:The ability to move crude oil along its tracks likely saved the Montreal, Maine & Atlantic Railway from financial collapse a little more than a year ago.

Now, after a 73-car train hauling crude oil derailed from MM&A's tracks and ravaged the small Quebec town of Lac-Megantic only miles from the Maine border, the petroleum product could end up being the company's undoing."

I don't know the entire situation and I don't know how they insure themselves, but an accident of this magnitude could put a small company out of business," said Richard Beall, a railroad litigation expert based in Georgia. "I've been involved in hundreds of lawsuits and insurance cases over my lifetime and they usually top out at a million dollars or two. This could be billions."


Read more at: http://www.pressherald.com/news/for-rai ... 07-14.html
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Re: What's next for MMA?

Postby CN9634 » Sun Jul 14, 2013 10:51 am

Bankruptcy. Green EMDs.
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Re: What's next for MMA?

Postby KSmitty » Sun Jul 14, 2013 10:59 am

CN9634 wrote:Bankruptcy. Green EMDs.

Bankruptcy? Probably, but I think it depends on when and how much Irving offers.
Green EMD's. I concur.
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Re: Oil train disaster in Lac-Mégantic, Québec 07-06-2013

Postby KSmitty » Sun Jul 14, 2013 11:27 am

Gilbert B Norman wrote:Moving on, I think all recognize that MM&A got toasted at Megantic and could well end up dissolved as a corporate entity. Their insurer, who knows, especially what if some lawyer finds a way around any stated policy limits?

Now lets presume the rail properties of MM&A and MM&A Canada are up for sale, the logical buyer would be Canadian Pacific and its US Sub SOO Line. But as an alternative , might CP consider an interchange first with its SOO (D&H) to Mechanicville, thence Pan Am (B&M MEC) to Eastport and Irving Oil's own road to St John?

CP may simply conclude that existing MM&A track (FRA Class 2 maybe?) is so deteriorated that they cannot safely move heavy HAZMAT trains over such and that continued operation over such would just be another accident waiting to happen. I have no idea to what extent the existing marketing arrangement between PAR and NS is mutually exclusive and/or could Pan Am handle not only their existing oil traffic plus that of CP and with the MM&A simply abandoned.

Anyone; or is there simply no reasonable alternative and the existing MM&A lines continue in operation?


I disagree with you here Mr. Norman. CP, with EHH at the helm, is more concerned right now with service issues on the SOO, namely capacity in the Bakken, as well as getting their financial house in order. CP is plenty happy west of Montreal, and as much as I would like to see CP red in Maine, I believe the most likely buyer in this situation is J.D. Irving's rail division. And Irving, even the non-oil Irvings, has deep pockets. Additionally where Irving is already operating the northern half of the Bangor and Aroostook and doing very well I see no reason why they wouldnt be interested in the other half. Searsport would have many possibilities with an Irving railroad running the show. They are a really aggressive and well run regional that does something Maine's other railroads seem to lack-customer service.

I highly doubt the MM&A's portion of the CP line will be abandoned, there are too many possibilities with the line, and its the only clearance route through the state of Maine. Auto racks and occasional IM service were paying the bills prior to oil coming about. Also without a connection in Montreal, or Brownville, NBSR/EMRY/MNR is reliant solely on Pan Am, not something that would be good for business... Don't write off the MM&A line for crude either. Much of Pan Am's line, especially east of Northern Maine Junction, is Class 1 or II track. Just like on MM&A major disasters will be avoided as long as things are down slowly. My guess is that traffic on the line will rebound after the crime scene is released at Megantic and the railroad can be reopened. I doubt much will change, racks, wood and crude will return, behind green EMD's with yellow lettering.

Also to clarify another point that seems to get commonly confused. Irving Oil doesn't own or operate any railroads. J.D. Irving is the rail operator and is largely a transportation and wood products company (Sunbury Transport, NB Rail, Midland Trucking, Irving Woodlands, Irving Pulp and Tissue...) Irving Oil is the same family of Irvings, I believe father and 2 sons, from Saint John but besides management sharing a table at Thanksgiving, the companies are separate entities.

And another, Pan Am is not currently running any oil with an NS routing. Oil to Saint John is following three routings. BNSF-CSX-PAR-EMRY/NBSR or BNSF-CN-NBSR or SOO-CP-MMA-EMRY/NBSR. Their is no exclusiveness to the Pan Am Southern deal as PAS is a common carrier and is competing for any business. I'm sure they would gladly take the oil off CP, but I think that will continue to flow across the International of Maine once the line is reopened.
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Re: What's next for MMA?

Postby fogg1703 » Sun Jul 14, 2013 12:16 pm

Thank you Mr Moderator for starting a new thread about this topic, it doesn't belong in the derailment thread.

With that being said, I concur with the general consensus that bankruptcy is likely, however this is a great opportunity for CP to regain the Moosehead at a possible bargain price. Too me Irving has no interest in running to Montreal unless someone else is paying to maintain the line. Would the potential amount of revenue for hauling all the way to Montreal instead of Brownsville Jct offset the maintainence costs of a lot of track miles with no revenue? I think not. This is why the Moosehead has been on the chopping block before. CP stands to keep more crude on its own rails, go after any long haul Potash traffic, any potential new container traffic and can regain some paper and pulp traffic that CSX has been siphoning off via PAR. Correct me if I'm wrong but most traffic on PAR SJPO trains terminates in the eastern US, meaning CP could fill out another train to send down the D&H with maritime traffic. While the value of the Moosehead cannot be understated to Irving, they had their opportunity when IR went bankrupt and they smartly only went to BJCT keeping all interchange options open.

Now would CP be satisfied with only going to BJCT? I think so, but with no guarantees on traffic levels (however they do still have overhead rights), they may make a play for all the former CP trackage.

As far as the Searsport line, I think the state will step in to keep the port viable and accept bids from a shoreline to operate it from NMJ to Searsport and NMJ north to BJCT will be abandoned as redundant.
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Re: What's next for MMA?

Postby JBConn » Sun Jul 14, 2013 2:20 pm

This was from the Oil Train Disaster thread, but I am moving it myself since it does not directly address the disaster or the suffering of the victims.

KSmitty wrote:There is also a good chance Irving didn't have any say over the routing,


This brings up a point I don't understand. On the PAR list of this forum, it was stated at one time as if it were a fact that Irving was re-routing oil trains (implying punishing PAR) for some recent slowdowns and less-catastrophic derailments. If I am Irving, and I buy oil from some producer or marketer out in WY or ND (or wherever) who gets to decide the route? The originating railroad? The marketer of the oil? The end user (Irving)?

I believe I read that the MMA and CP trains to Irving originate in one terminal out west served by CP (?), and that the PAR oil trains originate from a terminal served by BNSF. Can someone confirm?

With the single track mainline to Montreal out of service, does MMA have any meaningful revenue coming in?
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Re: What's next for MMA?

Postby gpp111 » Sun Jul 14, 2013 4:50 pm

The loss of the oil train revenue would have serious consequences for the MM&A. It is quite possible that even if the railroad survived the initial assault of various legal attacks from the Province of Quebec, the town of Lac Megantic, the Canadian Government, and survivors, Irving may opt not to contract with the railroad for future oil movements, deciding instead for moves on CN, Pan Am, and or via barge from Albany. Remember, the reason Irving is using Bakken crude is that it can be purchased for less per barrel than from other sources. There is no guarantee the Bakken crude will have a ten dollar or more price differential with Brent crude. However, Irving would probably like to keep traffic flowing on the MM&A if they can because they use the MM&A to bid against Pan Am and CN in order to keep pricing low. If Irving feels there is a liability to move oil on the MM&A, because of negative publicity or other, they will simply pull the plug since most oil contracts are short term. The CP would not be interested in anything but perhaps the western portion of the MM&A, definitely not the Moosehead subdivision, which they gladly sold to Iron Road. As I have said, there is no guarantee that the oil will continue to flow unless Bakken crude oil can be purchased by refiners at discounted prices compared to crude from Africa, Europe, and elsewhere. CP probably would prefer to move oil to Albany since this helps strengthen the financially challenged D&H line. This situation is catastrophic. I have not read if MM&A has begun rerouting traffic on Pan Am, or that perhaps they are unable to, and overhead rail moves have stopped until the Lac Megantic line is repaired. We will have to watch closely how long this takes and even if it will be allowed. Since it is a crime scene, they might wait many weeks or more for the line to reopen, if even that quickly. Certainly one way to punish the railroad is to take months in an attempt to locate all the remains of those who perished.
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Re: What's next for MMA?

Postby gokeefe » Sun Jul 14, 2013 7:06 pm

I am convinced the railroad is going to survive. The ownership perhaps not.
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Re: What's next for MMA?

Postby CN9634 » Sun Jul 14, 2013 7:26 pm

gpp111 wrote:The loss of the oil train revenue would have serious consequences for the MM&A. It is quite possible that even if the railroad survived the initial assault of various legal attacks from the Province of Quebec, the town of Lac Megantic, the Canadian Government, and survivors, Irving may opt not to contract with the railroad for future oil movements, deciding instead for moves on CN, Pan Am, and or via barge from Albany. Remember, the reason Irving is using Bakken crude is that it can be purchased for less per barrel than from other sources. There is no guarantee the Bakken crude will have a ten dollar or more price differential with Brent crude. However, Irving would probably like to keep traffic flowing on the MM&A if they can because they use the MM&A to bid against Pan Am and CN in order to keep pricing low. If Irving feels there is a liability to move oil on the MM&A, because of negative publicity or other, they will simply pull the plug since most oil contracts are short term. The CP would not be interested in anything but perhaps the western portion of the MM&A, definitely not the Moosehead subdivision, which they gladly sold to Iron Road. As I have said, there is no guarantee that the oil will continue to flow unless Bakken crude oil can be purchased by refiners at discounted prices compared to crude from Africa, Europe, and elsewhere. CP probably would prefer to move oil to Albany since this helps strengthen the financially challenged D&H line. This situation is catastrophic. I have not read if MM&A has begun rerouting traffic on Pan Am, or that perhaps they are unable to, and overhead rail moves have stopped until the Lac Megantic line is repaired. We will have to watch closely how long this takes and even if it will be allowed. Since it is a crime scene, they might wait many weeks or more for the line to reopen, if even that quickly. Certainly one way to punish the railroad is to take months in an attempt to locate all the remains of those who perished.


All keep in mind capacity. Running a refinery is mostly a fixed-cost business and keeping it at maximum capacity is a goal. Given the amount of crude they get from just one source, they will not have enough to max out capacity. This is why you see so many different sources.
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Re: What's next for MMA?

Postby F-line to Dudley via Park » Sun Jul 14, 2013 8:05 pm

There's opportunity to staunch some bleeding by granting overhead rights on their track for SLR/SLQ west of Lenoxville. That stretch of MMA mainline track and CN from St. Jean-Cantic-East Allburg is the best way for G&W to integrate its newly expanded northeastern portfolio with a direct NECR-SLR/SLQ interchange. Definitely the only one that'll net them a good clearance route. The WACR part of the Conn River + buying out MMA in Vermont is nobody's idea of an awesome routing, and WACR + rebuilding the Mountain Div. is an outright laugher.

It's risk/reward. G&W's likely willing to pay top dollar for rights on the superior route, and that'll help with investment in the physical plant on the western third of the main. But MMA also runs the risk of getting its traffic into New England poached by G&W that way. I guess it depends on how desperate they are for an immediate cash infusion.
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Re: What's next for MMA?

Postby CN9634 » Sun Jul 14, 2013 8:29 pm

There is little benefit to directly linking the SLR and the NECR as little traffic moves that way.

I have it on good authority the NBSR is preparing an action plan to overtake the MMA if the opportunity arises.


In the mean time, operations resume east of Jackman:

http://www.pressherald.com/news/maine-e ... 07-14.html
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Re: What's next for MMA?

Postby Backshophoss » Sun Jul 14, 2013 9:10 pm

If anything,both the US and Canada might create the requirement for 2-man crews on "KEY" trains(aka Haz-mat trains),
and leaving a "KEY"(Haz-mat) train unattended will not be allowed as well.
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