CMQ Profitability

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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Re: CMQ Profitability

Postby Cowford » Sun Oct 23, 2016 5:39 pm

Zeke, the book "Canadian Pacific to the East" does a good job in explaining the line's demise. I can't remember if the book mentions it, but CP Rail reorganized in the mid 80's (1987?) into internal Heavy Haul and Intermodal Freight Systems organizational divisions. Carload traffic in the East was dwindling, while profitable bulk material unit train business was growing in the West; the creation of these two divisions was evidence of CP's conscious pivot to the West. Saint John lost its container traffic in the mid-80s, the winter grain business went away. (it's still hard to believe grain was still moving in 40-ft, friction bearing boxcars into the 80s),NB branch lines were a shadow of their former selves, and the Dominion Atlantic (IMO, the most noble railroad name there is, rivaled only by "Grand Trunk") over in NS was dying a slow death. CP found the excuse they needed to kill the northern branches in 1987 when two bridges were knocked out by spring ice floes. CP's formation of Canadian Atlantic Railway to encompass essentially all lines east of Montreal in 1988 was, however, the most visible transition step to divestiture.

Keep in mind, too, that CN has retrenched - a lot! - in the Maritimes. In the 80s, they abandoned operations in NF. In 1989, they abandoned operations on PEI, and have since divested hundreds of miles of trackage in NB, NS and eastern PQ.
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Re: CMQ Profitability

Postby Zeke » Sun Oct 23, 2016 9:08 pm

Thank you Cowford. It sure is a tough environment to turn a buck in, railroading or trucking for that matter. As previously posted I can see how a traffic generator like Irving is in the position of dictating what freight rates it will pay take it or leave it. Prior to the Megantic disaster never paid much attention to this geographic area but find the undiscovered country quite intriguing. Surprising the MMA carcass was picked up by the new outfit. They must see some profitability on the horizon or a nice state subsidy but must admit it is a pretty bleak picture when it comes to wresting slim pickings from other carriers or trying dig up new sources of profitable traffic.
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Re: CMQ Profitability

Postby Cowford » Wed Nov 02, 2016 1:10 pm

CMQ Q3 results are in. Revenue made a good jump and expenses were contained, but carloadings are a disappointment; fewer than 50 cars ahead of Q3 2015, and this year's numbers include Rockland branch activity. To use a retail performance analogy, "same store sales" are not positive. And what growth there was, was from overhead business - the most precarious segment of all.

http://ir.ftandi.com/phoenix.zhtml?c=25 ... sentations
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Re: CMQ Profitability

Postby johnpbarlow » Thu Nov 03, 2016 6:56 am

I also thought this comment was interesting which I'm guessing refers to CMQ success with persuading shippers using the NBSR to PAR haulage bridge service to convert to an all CMQ route west from NBSR interchange?

- Revenue increased 12% and carloads remained flat during Q3’16 compared to Q3’15
o CMQR continues to shift low‐margin haulage traffic to high‐margin linehaul, driving overall top‐line growth


Somewhat related topic: do NBSR and CMQ now offer joint double stack service between Saint John and Quebec/points west on CP?
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Re: CMQ Profitability

Postby Ridgefielder » Fri Nov 04, 2016 11:15 am

Cowford wrote:CMQ Q3 results are in. Revenue made a good jump and expenses were contained, but carloadings are a disappointment; fewer than 50 cars ahead of Q3 2015, and this year's numbers include Rockland branch activity. To use a retail performance analogy, "same store sales" are not positive. And what growth there was, was from overhead business - the most precarious segment of all.

http://ir.ftandi.com/phoenix.zhtml?c=25 ... sentations

Worth noting that carloadings are down industrywide. The AAR's October report shows total loads down 5.1% y/y, ex-coal down 3.8%, with total rail year-to-date carloadings off 10% from the same period in 2015. In that context, +50 with higher revenue is a good performance.
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Re: CMQ Profitability

Postby CPF363 » Thu Nov 17, 2016 9:40 pm

How will the departure of the overhead haulage business between ST and NBSR impact the CMQR?
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Re: CMQ Profitability

Postby KSmitty » Sun Nov 20, 2016 9:37 pm

Well its certainly not going to help...
Short term, its going to tighten their margins, very well pushing them into the red in Q4. There is a bit more to it than the simple loss of traffic, which is mellowed by the fact CM&Q stole a significant amount of business from ST (I'd wager upwards of 50% of ST's pre-haulage traffic is gone, some due to attrition and some due to the Moosehead...). So, the loss of haulage is immediately less than it would have been at the start, since half the ST traffic is no longer ST traffic, but rather CM&Q traffic. The effects could potentially grow larger over the coming months, so the loss in revenue isn't as big as it potentially could be immediately. If ST/NBSR can make the 'Keag interchange work and put forth good service, they stand to steal back some of the business CM&Q stole and put on the Moosehead. Basically, the full effect of the loss of haulage traffic won't be felt until shipping contracts expire and Pan Am's marketing department goes on the offensive.

All that doom and gloom aside, I think its pretty foolish to think Fortress came into the MM&A property and thought "we need to get all of ST's traffic to succeed." I'm sure there is a plan, and there is a lot of promising potential to the east. They will feel the loss immediately but to think the loss of the traffic damages the long term plan Fortress has for the property is foolish. Fortress is large enough to weather the storm, waiting to see how Port Saint John's overhaul develops and if any of the always on the table Searsport projects work out. In the grand scheme its little more than a speed bump, that results in a few quarters of small loss.
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Re: CMQ Profitability

Postby fogg1703 » Mon Nov 21, 2016 8:59 pm

KSmitty wrote:Fortress is large enough to weather the storm, waiting to see how Port Saint John's overhaul develops and if any of the always on the table Searsport projects work out.


Bad news this week out of Saint John of Tropical moving its operations to Halifax. Roughly half of the container business gone as of 1/9/17. MMA ran occaisional Moosehead doubles stacks with Saint John Tropical traffic. Searsport again has great looking prospects on paper......
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Re: CMQ Profitability

Postby KSmitty » Mon Nov 21, 2016 9:33 pm

As I understand it, Tropical's departure coincides with DP World's takeover as the contract port operator. So DP's first challenge will be to rustle up some new steamship lines. We'll see what they can do with an improved and expanded waterfront.
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Re: CMQ Profitability

Postby Cowford » Thu Nov 24, 2016 11:33 am

I think its pretty foolish to think Fortress... thought "we need to get all of ST's traffic to succeed."


Smitty, what do you think they were thinking?

I'm sure... there is a lot of promising potential to the east. They will feel the loss immediately but to think the loss of the traffic damages the long term plan Fortress has for the property is foolish. Fortress is large enough to weather the storm, waiting to see... if any of the always on the table Searsport projects work out.


There's been talk for years about all this "promising potential to the east" and, as even you point out, the "always on the table" (but never served) Searsport projects (most recently in the Press Herald a couple of weeks back). The proof of the pudding is in the eating.
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Re: CMQ Profitability

Postby KSmitty » Thu Nov 24, 2016 7:39 pm

Cowford wrote:Smitty, what do you think they were thinking?

That with a leaner operation, a few small gains (like grabbing the auto contract to SJ back), and more reliable service they could eek out an existence. You can make a living if you operate efficiently, but its never going to make money hand over fist unless you can find a way to grow carloads exponentially.
Cowford wrote:There's been talk for years about all this "promising potential to the east" and, as even you point out, the "always on the table" (but never served) Searsport projects (most recently in the Press Herald a couple of weeks back). The proof of the pudding is in the eating.


Yep, thats why I said "any of the always on the table Searsport projects." I'm not saying if Searsport were to develop something it would ever be a world-wide competitor for steamship lines and will certainly never be more than a niche port. But it used to be a happening place, and the potential for business still exists. GAC wanted to expand, don't know if thats still in the works or abandoned (since the papermaking market has shrunk so much in Maine...Irving still has a terminal on the waterfront, with an unused siding. A little LP here, a few wood cars there...A few carloads additionally on the waterfront could make a big difference.
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Re: CMQ Profitability

Postby Cowford » Fri Nov 25, 2016 3:41 pm

Geez, I don't think Fortress investors would be enthralled with an investment goal of "eek(ing) out an existence".
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Re: CMQ Profitability

Postby csx2039 » Fri Nov 25, 2016 10:21 pm

Traffic is way down lately, maybe pan am stole some back?
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Re: CMQ Profitability

Postby gpp111 » Sat Nov 26, 2016 8:45 am

It would seem the low hanging fruit has been picked. Pan Am seems to think there is growth coming from the Port of St John from container traffic and is rebuilding their connection. Not sure how 10MPH track can compete for that business. Irving will then get CM&Q and Pan Am into position to beat down each others rates.

Searsport has always been the diamond in the rough. This is where it will stay, just an unrealized dream. But we all have dreams, and they do help sustain us through the difficult times.
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Re: CMQ Profitability

Postby Cowford » Sat Nov 26, 2016 9:46 am

If you read about the latest iteration of Searsport's opportunity with Maine Woods Biomass Exports, a visit to MWBE's website is worthwhile, in order to keep your expectations in check. Kinda reminded me of the Golden Eagle Railway. By the way, they say they've already started producing railroad crossties in Millinocket. Is this actually true?
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