CSX Acquisition of Pan Am Railways

roberttosh wrote: ↑Wed Feb 24, 2021 10:28 am Unless the business is moving under some type of long term contract (which is not all that common anymore), then it's moving under a simple rate quote that can typically be cancelled on 30 days notice and which furthermore does not have a volume guarantee. I'm not suggesting that day one you're going to see an immediate flip on all this traffic, but Pan Am already handles traffic in this lane to CSX so it isn't like they have to reinvent the wheel on this service lane. Sure, out of the gate the CSX single line service may not be the fastest way out of the Maritimes, but you would be surprised how much shippers are willing to put up with when it comes to saving money.

As someone with first hand experience working for major shippers with many Class Is I can tell you it’s not as simple or elegant as you’ve put it.

Maersk has not announced anything officially but the rumor mill is abuzz with the shift away from CN and Montreal concurrently. The current threat of renewed industrial action at PoM is making everyone think about “single supplier” risk relying so heavily on that port for cargo landing in Canada... thusly you see the interest to shift to Halifax and the new redeveloped option of Saint John.

CN, It's not rocket science if you control both the origin and destination. In probably 5 minutes CSX can pull the data on every single car they handle out of the Maritimes with CP and at what rates. Then they go to Irving and say something like "You know that 500 cars a year of paper you move to Baltimore via CP/CSX, well we can save you $800 a car ($400,000 per year) starting tomorrow if you switch to a CSX direct route." Simple as that and again the only thing preventing them from doing so would be if the traffic is tied up under a long term contract or if by some chance there is an equipment supply issue which is unlikely in the case of someone as large as CSX.

Gilbert B Norman wrote: ↑Tue Feb 23, 2021 5:02 pm Earlier, Mr. "New England States", aka NYC 27, noted a routing using the Grand Trunk, apparently now a G&W road. Is there a physical connection between these roads?

Enquiring mind wants to know.

Mr. Norman, it appears CN has to get it from one road to the other, as they do not have any direct interchange with each other in Montreal.

The GT you speak of has been a G&W property since 2002.

Anyone rememeber how much CSX-NBSR tonnage Pan Am was moving on SJWA SJPO SJAY (whatever they were called) before they stopped running to Keag? It's a rhetorical question, those jobs got huge before they switched to the NMJ routing. This MAY be a clue into what is possible with a higher velocity single haul.

Anyone who thinks that CSX is going to sit around and not do everything in their power right out of the gate in terms of capturing more Irving business when they just spent $800 million to buy a railroad that ends at their front doorstep is kidding themselves. Unfortunately for CP and CN, on a lot of their traffic it will be like taking candy from a baby.

There will be a large amount of operational integration and infrastructure upgrade work to be done beforehand too, last thing you want is to switch a bunch of business over day 1 and fumble it.

Not want to do? Maybe. Have to do anyway? Absolutely. I can't think of any examples of the former, but plenty of examples of the latter (SP-UP merger, CR split, etc...)

roberttosh wrote: ↑Wed Feb 24, 2021 11:37 am CN, It's not rocket science if you control both the origin and destination. In probably 5 minutes CSX can pull the data on every single car they handle out of the Maritimes with CP and at what rates. Then they go to Irving and say something like "You know that 500 cars a year of paper you move to Baltimore via CP/CSX, well we can save you $800 a car ($400,000 per year) starting tomorrow if you switch to a CSX direct route." Simple as that and again the only thing preventing them from doing so would be if the traffic is tied up under a long term contract or if by some chance there is an equipment supply issue which is unlikely in the case of someone as large as CSX.

I’m not saying it’s rocket science but I’ve chased RRs for rates for weeks at a time... and I’ve seen them use legacy routings that I know for fact should be updated or could be done more cheaply. Spot pricing, customer relationships, operational pressures, and anything in between impacts all that. Also it depends on how much other stuff your account rep has on their plate. Some of the reps aren’t even local to your market, they need to fly in to meet (well I guess no one is doing that anymore anyways).

The SJPO / POSE connection worked extremely well to pull traffic off a lot of CN routings from SJ sources traffic but also MNR out of Northern Maine (anyone remember the “Maine Line Chicago” marketing?). I can remember 908 having healthy set offs of MNRs for Pan Am at Keag each trip. Don’t forget— CN has an MNR gateway out via Van Buren that we basically never see because railfans up there are about as rare as they come. A lot of that is ripe for plucking, granted a few timber mills have closed since then.

Surely CSX will have an optimal structure for forest products but my point is simply that I don’t see day 1 big business switches... gotta get your sea legs first and customers up this way are easy to get creative first sign of disappointment... remember most survived the GTI days. But I think CSX has a great value proposition, the real question is will they de-market the paper shuttle and Poland spring runs that were bread and butter business for Pan Am? Volumes are consistent but margins are slimmmmmm.

Anyways, another side bar note. This subject is getting pretty toxic, lot of aggressive back and fourth. Maybe the pandemic or impatience of STB filing is getting to everyone but I really think every should cool down. There was another forum mocking this very thread, basically saying how everyone is beating each other with nerf bats and I gotta say... it’s pretty spot on. Let’s all go have a beverage of choice, get some fresh air and put a pin in it until we know more... maybe just until the blood pressures come down a bit.

Hard to stop the 124 page Rollercoaster now!

I’m certainly seeing some animated, lively conversation taking place here but no personal insults, name calling or disrespectful posting in general so I wouldn’t go so far as to use the word “toxic”.

I guess we even have to argue about our arguments.

Gilbert B Norman wrote: ↑Tue Feb 23, 2021 5:02 pm Is this cement traffic worth waking Chessie up from her "Catnap"?

Not so much whether this wakes up the Cat, but, whether it wakes up the Beaver or the Moose's great-grand-relative.

Railroad marketing 101 is about each carrier maximizing length of haul within a market segment amongst sources and customers, so I would imagine CSX would look to increase their length-of-haul for cement traffic to ST destinations (or the end-markets served) to the extent they can, with sourcing out of MD, for example, than from Quebec moving via gateways providing the (much) shorter-haul. Perhaps, the same might be said to some degree for the propane, chemicals, lumber & paper, and plastics markets?

QB 52.32 wrote: ↑Thu Feb 25, 2021 6:23 am Not so much whether this wakes up the Cat, but, whether it wakes up the Beaver or the Moose's great-grand-relative.

Huh?

Mr. QB, you got me here; Beaver is of course CP, but did CN, or any of its predecessors, have the Moose?

All I know of those furry beasts was seeing one about 100 yards away splashing in the Lake at Kapitachuan Club during '56. That was close enough for me, even though there were camp councilors who bragged how they swatted one with a canoe paddle - and was here to tell the tale.

Signed, Perplexed.

newpylong wrote: ↑Mon Feb 22, 2021 8:49 pm

roberttosh wrote: ↑Mon Feb 22, 2021 8:20 pm They must have run the Lawrence block from Rigby all the way to Deerfield.

Stranger things have happened lol.

Like the time a block went to Enola


But in regards to CQ, I know the US GM very well and Newpy is right, majority is via CP at Mohawk for both terminals. If needed they can route via SLR, but its not a constant/normal routing for them. For Everett if things get really hairy they can request a ship, but that takes about a month lead time I believe.

Gilbert B Norman wrote: ↑Thu Feb 25, 2021 8:09 am Mr. QB, you got me here; Beaver is of course CP, but did CN, or any of its predecessors, have the Moose?

Actually, yes - the Intercolonial Railway (one of CN's predecessors in Quebec and the eastern provinces) used a moose as their logo. That was about 100 years ago, but yes, there was a moose...

A few posts with the cutesy names are entertaining, but we seem to be getting to the point where you need to decode each post before you can figure out which players are actually being talked about!


It sure will be interesting to see how this all turns out, both short term and long term.

Here is my understanding of the nicknames:

Chessie / Kitty / Kitten = CSX
Topper / Thoroughbred = Norfolk Southern (NS)
The Beaver = Canadian Pacific (CP)
The Moose = Canadian National (CN)
... I think I *may* have heard CN referred to here as "The Maple Leaf"? Maybe not
The Borg = Genesee & Wyoming (G&W), now owned by Brookfield Infrastructure Partners

And for other lurkers like myself, especially those who are fairly new to the hobby:
GTI = Guilford Transportation Industries
GT = Grand Trunk (CN subsidiary for it's US properties) ... the SLR (Saint Lawrence & Atlantic, a G&W road) now runs over this route from Auburn, ME to Island Pond, VT (and ultimately onto Sherbrooke, QC as the St-Laurent et Atlantique Railroad / SLQ which is also G&W-owned)
QGYR = Quebec Gatineau Railway (a G&W road)

Lastly, FWIW I still enjoy checking this forum & thread multiple times a day for conversation & updates on the sale - thank you all for the continued learnings & entertainment! I for one am going nuts waiting for the filing too, but, everything in good time I suppose.