CN9634, if you reread my post, I did not say that rail transportation was not a "viable" option in New England, simply that it could be made "more viable." I say this for two reasons:
Firstly, railroads in New England are very balkanized. This makes it much harder to ship because the customer often has to go through one or two different railroads in order to access the wider North American rail network. Additionally, most smaller railroads simply don't have the resources in order to court bigger customers. The CMQ could not court the types of customers that CP is courting now because they didn't have the resources to do so.
Second, the nature of how Pan Am (the region's largest railroad) operates prevents bigger opportunities from manifesting themselves. Don't get me wrong, Pan Am has improved by leaps and bounds since the Guilford years. As you stated, when their traditional traffic sources declined, they were able to find plenty of new business to keep the trains full; however, I think there is still much work to be done before the former B&M and MEC can live up to their full potential.
Luckily, things have been getting much better. New England is seeing consolidation into four "major" systems, those being CSX, G&W, VRS, and the Irvings, with CN, CP, and NS at the periphery. More resources are being plowed into New England than at any time in the past 70 years. Customers will find it much easier to ship because of the reduction in the number of marketing departments one must contact to do so. Yes, CSX bought Pan Am "because it was for sale," but also because they want to convert truckloads to carloads. They said it themselves in the second STB filing.
I get the feeling that New England was its own little world just a few years ago. In a decade, it will be seen as just another part of the wider North American rail network. Its transformation from backwater to being just as integral as the Carolinas or Upper Midwest will be one of the greatest stories to come out of 21st-century railroading.
Barbecuing in Chessie's backyard.