CMQ for sale?

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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roberttosh
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Re: CMQ for sale?

Post by roberttosh »

What will be interesting is to see if the CP fights tooth and nail for every last competitive onsie twosie carload as the CMQ did and was really forced to do to survive. Class ones typically don't take that same approach and wouldn't be surprised to see CP really concentrate on Auto, Intermodal, unit potash, crude, chemicals, propane, etc. Not sure how much emphasis there will be on the up for grabs Irving originated paper and lumber carload business.

Zeke
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Re: CMQ for sale?

Post by Zeke »

If I am reading this correctly Fortress put 55 million into the CMQ including the purchase price and sold out to CP for 130 Million ? When EHH was resurrecting the CP he mentioned the sale of the CP maritime lines was a tactical mistake and he hinted he may buy it back in the future. Creel was EHH's son in law so I guess he saw the time was ripe. Probably some big deals are in the works regarding port traffic and CP is positioning themselves to grab some of it.

johnpbarlow
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Re: CMQ for sale?

Post by johnpbarlow »

Trains Magazine on-line reports on 11/22/19 that CP Chief Marketing Officer John Brooks told the RailTrends 2019 conference on Friday that
"Canadian Pacific will upgrade Central Maine & Quebec trackage so that the route linking Montreal and Atlantic ports can handle premium intermodal and automotive traffic [upgrading from CMQ's current MAS from 25mph]..."

and "...Rival Canadian National has a major presence in Atlantic Canada, including service to Saint John, as well as Halifax, Nova Scotia. Buying the CM&Q will enable CP to better compete, Brooks says..."

and specifically "...Acquiring the CM&Q also may permit CP to better compete for potash traffic that CN currently handles to the port of Saint John for export to Brazil..."

http://trn.trains.com/news/news-wire/20 ... um-traffic

fromway
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Re: CMQ for sale?

Post by fromway »

If I remember correctly, right now CN is bring in Potash and loading it on to trucks and then transported it to be loaded on ships. Could they spend the bucks in Searsport on a new loading facility to handle unit trains of Potash? Looking at Google Maps I'm not sure if there would be sufficient space to unload and store before loading it on a ship to Brazil.

carchecker
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Re: CMQ for sale?

Post by carchecker »

No trucks are involved at the potash terminal in Saint John. Product goes from rail cars to the warehouse and then to the ships when they arrive.

fromway
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Re: CMQ for sale?

Post by fromway »

Thanks for the info on SJ. The last time I was there, a steady stream of trucks were coming into the area and backing up and dumping their hall directly into the conveyor system and it was going right onto the ship docked there. Maybe it was something other than Potash.

QB 52.32
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Re: CMQ for sale?

Post by QB 52.32 »

CN9634 wrote:
Fri Nov 22, 2019 6:15 pm
That's not what CP thinks. The CSX/NS stuff is the Jersey/PA business, but the breadbasket for print shops and merchants is really Midwest (Minnesota/Wisconsin, IL) which is where CP's advantage will flourish. Also, anything going transcon will be advantaged for sure. Inbound raws I'm sure will be a quick hit too with the purchasing power of the USD vs CAD.
When it comes to this deal and forest products you have to differentiate between what is sourced on PAR and what is sourced on Irving's railroads.
That bread basket, isn't CP the smaller of the players there? How much leverage will CP have with PAR's Maine mills, with PAR or in that breadbasket? In terms of sourcing, what's really changed here - that dynamic has already existed with CMQ CP's northern New England/Maritimes franchise operator, no? For the transcontinental traffic they will have to compete with an entrenched competitor who provides good service today. I'm just not seeing the wholesale change and "anything can happen" potential for Maine's forest industry traffic with this deal.

gokeefe
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Re: CMQ for sale?

Post by gokeefe »

There's a fair amount of export traffic in pulp that could be in play.
gokeefe

CN9634
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Re: CMQ for sale?

Post by CN9634 »

Being located offline has never stopped me when looking at solutions, it all comes down to the full cost of the move A to B (and combination of modes used). Of course CP is the smaller player but that doesn't mean they can't compete with CN.

Depends on the rates quoted and what Pan Am is going to want for the NMJ-WTVL portion, but I'm sure they'll come in aggressive to the existing ST-CN routing to the midwest, which subs to the SLR. Also anything going to BNSF or UP. I'd also look for logistics companies like NEPW flock to Hermon to get a warehouse up and running on CP property quickly, the opportunity to build directly onto a Class I connection is extremely enticing (and something they lack). NEPW also has deals already in place with most major mills in the area, so they'll likely get a logistics spoke setup to turn truckloads into a CP warehouse and ship out by rail (it happens quite often already actually). These things don't happen overnight, but again with CP's resources they'll come together quickly. Inbound pulp to the marketplace already coming in off CN to ST is a prime candidate to change (CP has a large relationship with Domtar that can be leveraged there).

The dynamic has not existed -- you've always had the ABC shortlines making the Class I connection, only Pan Am really has had the ability to move directly to a Class I. Think too NS is scaling back (thanks PSR) as well as CSX, so really CP will have a major advantage. Single line from Maine to Wisconsin and Minnesota is something NS/CSX lack too, they have to interchange to get there. Also, there are a few large print shops located on CP with one of the largest as close as Saratoga Springs, NY, I can't imagine CP won't try to chase that down.

I don't think anyone should underestimate the existing infrastructure at Searsport, which MaineDOT has quietly been improving bit by bit over the years. When I talk to breakbulk carriers they always bring it to the table as under hook location. Also, ports with any capability and reasonable draft are getting difficult to come by in this day and age... now you have a Class I right there it's quite a game changer. \ I would encourage folks to review the link below--, opportunity exists for a breakbulk venture, think K+S (rival to Canpotex's Nutrien and Mosaic) who doesn't have an Atlantic terminal yet. Also, Canpotex has Portland, OR and Vancouver, BC as terminals on the west coast, who's to rule out them having a second terminal on the Atlantic coasts? A lot of it is strike protection, not just the RR's but the diversity of ports and unions (Canadian vs US). I doubt Searsport will ever be a container player, but you never know what the future holds.

A quick exercise, is to compare the Canpotex terminal in Saint John to the footprint of Searsport and you'll see that all is really needed is a bulk conveyor system (which was on the docket for Maine DOT for years). The recently rebuilt yard

https://www.maine.gov/mdot/ofbs/docs/Se ... 170803.pdf

Look my point is, there is a decent amount of traffic to be had and at the end of the day, CP has made a decision to go after it by virtue of spending $130M on the line plus however many millions to upgrade the line to put them smack dab in the center of things. The investment in the pulp and paper industry in Maine and New Brunswick over the past 3 years is nearly $2 Billion dollars. I think CP at the very least has the notion they have a decent shot at a good chunk of that, plus their core business focus of intermodal and auto traffic.

Canpotex already filed the C-49 Interswitching suit against CN in 2018 for Potash to Saint John... the problem is the nearest interchange was St. Jean, QC within the Windsor-Quebec corridor (against the rules of interswitching). Then they asked for the rules to be changed and were denied. So now with the CP purchase you take that interchange point out of the exclusion zone and all of a sudden CP can grab a large chunk of 13,000 carloads of Potash annually. Already there have been things in play, where customers have come to CP seeking a solution in the East, so CP is addressing this need from a market standpoint.

More on the Canpotex point: https://sencanada.ca/content/sen/commit ... rief_e.pdf

There are a lot of angles, that of which just CMQ alone could not have had the firepower to pursue. Actually, CMQ was successful in gaining a lot of test loads from customers using CN, but at the end of the day the dollar made judgement and they couldn't compete. Now you have a stronger position with CP, so I think there is merit there. Besides, if someone told you one year ago CP would buy CMQ and move back to Maine I think everyone would have laughed at you, but look at where we are today.
Last edited by MEC407 on Mon Nov 25, 2019 9:37 pm, edited 1 time in total.
Reason: unnecessary quoting

gokeefe
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Re: CMQ for sale?

Post by gokeefe »

CN9634 wrote:
Mon Nov 25, 2019 6:27 pm
Besides, if someone told you one year ago CP would buy CMQ and move back to Maine I think everyone would have laughed at you, but look at where we are today.
So this to me begs the question ... Is there a possibility CN would buy SLR and rebuild to interchange with PAR/PT @ the International Marine Terminal in Portland?

Seems completely nuts to me. I don't think they need to but look what just happened this week. If CMQ wasn't good enough for CP then I have to wonder if CN will be satisfied with SLR.
gokeefe

CN9634
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Re: CMQ for sale?

Post by CN9634 »

Portland has reached near full viability as a port. There is no space to expand anywhere....maybe something on the SoPo side but really no where else. For liquid bulk it works great and will just continue to go as-is. Container wise, you'll never get a ship larger than 1200 TEUs at the existing berth, and to expand you need to buy half of the fish piers. You think Searsport NIMBYs are bad, Portland is 1000 times worse.

OK let me scale back my previous point, in terms of realistic scenarios -- and given the fact the old CN yard sits where WEX's new HQ is, as well as the condos rising up, I'd say that is outside the realm of possibility. CP buying CMQ was always a realistic scenario but a seemingly unlikely one.
Last edited by MEC407 on Mon Nov 25, 2019 9:43 pm, edited 1 time in total.
Reason: unnecessary quoting

pumpers
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Re: CMQ for sale?

Post by pumpers »

Any estimates on how much the Fortress investors made on the deal? How much did they spent to get the CMQ, and how much did they spend to upgrade? Probably what they spent was only a fraction of $130M.

gokeefe
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Re: CMQ for sale?

Post by gokeefe »

CN9634 wrote:
Mon Nov 25, 2019 6:43 pm
OK let me scale back my previous point, in terms of realistic scenarios -- and given the fact the old CN yard sits where WEX's new HQ is, as well as the condos rising up, I'd say that is outside the realm of possibility.
Ok fair enough so let's roll back the follow on question ... Is there reason to believe that in the current situation CN might buy SLR in order to expand the inland port operation in Auburn? They have plenty of space in that area where they could do something big and nice travel times to Boston and other parts of the Northeast.
gokeefe

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Re: CMQ for sale?

Post by NHV 669 »

You mean the container terminal that was doing single digits per day, that they stopped shipping to five and a half years ago? Why would they expand something they don't even utilize, let alone purchase the entire RR for it?
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gokeefe
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Re: CMQ for sale?

Post by gokeefe »

It's more containers than Searsport ...
gokeefe

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