CSX Acquisition of Pan Am Railways

bostontrainguy wrote: ↑Fri Jul 01, 2022 8:37 am Coors does it with beer.

Silver Bullet by Rail: From Hops to Finished Product, Coors Beer Takes the Train

https://trid.trb.org/view/778542

Mr. Trainguy, Warren is not the only "railbaron" to handle beer - both the agricultural commodities inbound and the finished product out.

Beer "aficionados" around here (myself; not the whole truth, but I haven't had one since college) surely know of Schlitz - "The Beer That Made Milwaukee Famous".

Funny how the MILW's herald was often referred to as "the beer sign".

Coors does it with beer.

More accurately, Coors DID it with WORT. Coors opened a finishing and bottling plant in Elkton WV and shipped wort (think of it as beer concentrate) from Golden in stainless steel tank cars. They eventually added brewing capabilities in WV and the tank car moves ended. The cars have popped up for lease/sale on various car leasing web pages over the past 5+ years. MillerCoors still ships packaged beer out of Elkton/Golden by rail.

Now that we're way of topic....

Elkton is in Virginia not WV. Located on NS Shenandoah Valley (N&W) line. This shipment no longer happens as beer is now brewed, not just bottled, in Elkton, VA.

So much for the Coors Mystique. I wonder if new people watching Smokey and the Bandit today wonder why they were making so much fuss about a truckload of Coors.

But even with that example, Coors was able to load the cars on-site. If whoever owns the Grand Trunk now didn't want to run beans on existing track to the B&M plant, they certainly aren't going to run an entirely new line from Lewiston Junction to Poland to give PS a siding.

What amount of traffic (and type) will the G &W handle while operating the old Boston & Maine route through the Hoosac Tunnel once they begin running it come October?
Also, in a nutshell, what is CSX’s goal in this acquisition?
(Pardon the question if it has already been covered but this while interesting, this is a long, long thread)
Thank you.

XC

The beans were a car a month, if that, for a 50 mile round trip.

I imagine Poland Springs wants to do more business than that, and G&W already rebuilt that entire section of track right by SLR HQ for a customer that I've yet to hear ship a single car out on. And that was what, 5/6 years ago?

They've also laid CWR all over the US side of the line, that sees no more than 8+/- road freights a week, and a 5x a week local.

I'll be curious to see what happens to SLR volumes once CSX starts really making changes. Will the single line interchange to US markets drive traffic growth? Will they attempt to attract customers looking for more short line-y service in PAR's former svc region?

So has CSX started track work, dropped ties or rail anywhere yet? Kind of thought they'd get going right away after the sale was finalized.

XC Tower wrote: ↑Sat Jul 02, 2022 12:16 pm What amount of traffic (and type) will the G &W handle while operating the old Boston & Maine route through the Hoosac Tunnel once they begin running it come October?
Also, in a nutshell, what is CSX’s goal in this acquisition?
(Pardon the question if it has already been covered but this while interesting, this is a long, long thread)
Thank you.

XC

The GWI operational handover of PAS is not due to occur until the end of the year as it stands. They'll move the same cars that are moved today plus whatever else their now-contiguous portfolio of railroads is able to offer that was not possible before.

Yes, the CSX aquisition has been discussed in great length. The widely accepted answer is: they felt it was a once in a lifetime opportunity to acquire a profitable railroad that operated a hell of a lot of trackage in a region that already connected to their network.

The answer they won't state on the record is that after the railroad was "right sized" by PSR, they are effectively looking at growth because they have excess capacity (in terms of railcar utilization, trackage/yard and locomotive). The tough nut to crack will be getting the people to do it.

NHV 669 wrote: ↑Sat Jul 02, 2022 12:18 pm The beans were a car a month, if that, for a 50 mile round trip.

I imagine Poland Springs wants to do more business than that, and G&W already rebuilt that entire section of track right by SLR HQ for a customer that I've yet to hear ship a single car out on. And that was what, 5/6 years ago?

They've also laid CWR all over the US side of the line, that sees no more than 8+/- road freights a week, and a 5x a week local.

That's fine, but my point was that there's no existing line of any type that comes near the Poland Spring plant, so if PS were to start running their own tank cars from there it would require an entirely new 4-5 mile ROW, complete with new land acquisition through a populated area, looping around the existing state park. I don't see any rational ROI for anyone on a buildout like that, particularly since it's already a bottling plant they're starting from.

Read the back of a Poland Spring bottle there are like 8 springs they draw from. So don’t get hung up on on Poland even though they once had their own private line off the original Rumford Branch (their locomotive is at Steamtown). Also it is cheaper to pipe water to the railroad than build a spur.

Wow, a spring water water main. They would have to ozone disinfect the water. Probably use plastic piping? I guess since it would have only one inlet & only one outlet it would be more pure than a municipal water line!!!

newpylong wrote:

Also, in a nutshell, what is CSX’s goal in this acquisition?

...the CSX aquisition has been discussed in great length. The widely accepted answer is: they felt it was a once in a lifetime opportunity to acquire a profitable railroad that operated a hell of a lot of trackage in a region that already connected to their network.

The answer they won't state on the record is that after the railroad was "right sized" by PSR, they are effectively looking at growth because they have excess capacity (in terms of railcar utilization, trackage/yard and locomotive). The tough nut to crack will be getting the people to do it.

Pursuing growth is a primary reason CSX adopted Hunter Harrison's PSR principals in the first place, effectively through greater efficiency and service reliability, and on the record, not so much an off-the-record secondary consequence.

Without PSR doubtful CSX woulda/coulda made this acquisition, even with available excess operational capacity and the risk of 1 of the 2 Canadian Class 1's, already operating under Harrison's PSR principals, acquiring PAR.

After CSX signaling strategic hemming-and-hawing about whether to stay or leave New England and in light of the benefits of PSR, potential Canadian threat, and increasing freight rail reduction/re-location pressure on their ex-Conrail franchise extending out to Springfield MA, in a nutshell there's a range of possibilities justifying this acquisition in pursuit of financially-healthy and sustainable growth.

Taking this into consideration beyond what is publicly said or even rumored provides a framework when anticipating short-, mid- and long-range ownership, capital investment, other Class 1, market, and operational possibilities in their acquisition of Pan Am and half of Pan Am Southern.

In the greater PSR-cost/benefit and Wall-Street-cult-of-the-operating-ratio-hamstringing debates this acquisition and that of trucker Quality Carriers by CSX provides an important consideration.

I do not think you will find many who share the opinion that "Pursuing growth is a primary reason CSX adopted Hunter Harrison's PSR principals in the first place".

EHH's PSR is primarily method of extreme cost cutting and Wall Street loves it .Most of the profits have gone for stock buybacks and dividends .Little has gone into "The Pivot To Growth ",and not much has gone in to capital improvement . And a look at traffic volumes on CSX.com shows that total volume is still declining at about the same rate as before PSR. Not much growth there.