CSX Acquisition of Pan Am Railways

Bobby T is correct.
ST and now by acquisition, CSX, will have HAULAGE rights into and out of Saint John. NBSR and ST currently settle on an agreed haulage fee by commodity and car type.

I know there are some people on this forum who work for existing ST or Pan Am shippers and know their rate documents reflect ST being in the route all the way to or from Saint John. NBSR doesn't get listed in the routes on the waybills in those publications.

Interestingly the CSX map of the transaction shows what appears to be trackage rights to Saint John:

Haulage rights, not trackage rights.

Folks, at this time, take my word for it, CSX will NOT have trackage rights to SJ, strictly haulage rights. Maybe that changes down the road but not now.

So if that is the case then there needs to be some trackwork done at Mattawamkeag since there looks like no easy way for NBS to drop cars there and continue onto BJ on Google Maps. Mattawamkeag is kind of in the middle of nowhere and miles from any engine facility. It's not going to be that efficient of a transfer point but I guess CSX has to start somewhere.

Pin is where shared through interchange track was located:

Thats what others pointed out several pages ago. The last time Pan Am ran up there, they would tie down the train west of Route 2 and Irving would have a crew based at Mattawamkeag which would haul the train onto EMR trackage and shove west to the siding at Kirby before conducting some run around moves and switching, before shoving east across Route 2 with the Pan Am bound cars and hauling up on Pan Am trackage until they were clear of Route 2. Pan Am had a bunk house down there, which I think was up by the Permatreat operation.
This won't work with the current Irving operation, as trains normally meet at Kirby or Bancroft. And there is talk about reworking the MNR ops so the siding at Hardy Pond can be used once they start running more trains, since Brownville Jct is already a choke point. Its also possible that CSX could just get another track in service across Route 2 (currently one track is operational) so a east bound CSX job and a west bound Irving job could swap trains, which would be the best option for now.

It's only small fry in this transition but, now that it's official would this be where the Miford & Bennington gets New Hampshire to buy the rest of the Hillsboro Branch?
As much as Hendrix Wire is a good steady customer with Harcross Chemicals adding to the mixture, it doesn't make sense for CSX to want to bother with that much trackage for 2 customers.

Maybe with more reliable service locally as well as direct access to CSX, customers like Suburban Propane might reconsider rail service.

This would also make Milford & Bennington a year round operation. They would probably need to acquire another locomotive though to ensure reliability.

Just my 2 cents.

Irving, who owns the NBSR prefers to do HAULAGE agreements so as to be a neutral carrier and cost factor in their various businesses. This way CN, CP and now CSX are competing on equal footing.

Plus that is a lot of remote railroad between Bangor to Saint John. Something goes wrong and Jacksonville would suddenly have a long and expensive taxi ride and border crossing issue. We are not talking Detroit to Windsor. Best to let Canadian crews handle trains between SJ and Keag.

Here are a couple of Pan Am relevant comments made by CSX execs at the 4/20/22 Q1 2022 earnings conference call with financial analysts:

Jim Foote, CEO: "...Lastly, I’d like to note that we are pleased that the Surface Transportation Board approved our acquisition of Pan Am Railways which clears the way for the transaction to close this June. All of us are excited about the opportunities that will come as we design new service solutions for shippers and receivers in New England..."

Sean Pelke, CFO: "...Finally, we are excited to close the Pan Am deal on June 1. Pan Am will contribute about 1 point of annualized revenue, primarily within merchandise. Due to transaction and integration costs Pan Am will have a negligible impact on earnings this year and the capital we expect to invest to upgrade the Pan Am network is already contemplated in our guidance. We look forward to working with Pan Am and its customers to drive continued growth through our integrated rail network..."

Analyst Fadi Chamoun, BMO Capital Markets asks: "... what do you would like to accomplish with the Pan Am specifically in terms of commercial? What carriers of traffic you think you have commercial opportunities to go after as you close on that transaction?...
Response from Jamie Boychuk, Exec VP: "...on Pan Am, look, it’s a very good consumer market. There is a lot of paper packaging customers that want more access to markets that we serve. The waste business in that market is going to continue to grow. We see great opportunities there. And we think with a better rail service, that’s going to open up many more markets that quite frankly, just from a transit time or reliability standpoint just we were unable to serve previously. So we’re really excited. We’re gearing up now that the approval has gone through and going to work closely to really capture those opportunities...."

New Haven 1 wrote: ↑Thu Apr 21, 2022 2:27 pm Maybe with more reliable service locally as well as direct access to CSX, customers like Suburban Propane might reconsider rail service.

Suburban Propane wouldn't come back if they were on the mainline and got 7 day service. They made a corporate shift away from deliveries at smaller terminals to using larger bulk plants a while ago. They have TONS of small plants that were rail served and every one that I can think of is dormant.

Thanks, Mr. Barlow, for posting the comments made at the 1Q22 earning conference call. One small correction, Kevin Boone, EVP- Sales & Marketing, provided the answer about commercial opportunities.

To an earlier point about who presented supporting testimony during the STB hearings and how that might go to the different elements found in the transaction, I found participation of Tim Murray, Head of the Worcester Area Chamber of Commerce, and Steve Goodman, GFI Partners founding partner, of some interest. Murray, as Massachusetts' Lieutenant Governor, instigated and created the big deal with CSX to partially re-structure their franchise east of Worcester and GFI does MA rail facility re-/development, including last I heard, an interest in the proposed Wilmington-Woburn Intermodal LLC facility. Either or both could be involved or see the opportunity for involvement that goes to using this transaction to further re-structure CSX's existing eastern/central MA franchise or take advantage of opportunities made available to CSX otherwise challenged to some degree without the transaction. And, that could not only go to the "great opportunity" as described by Mr. Boone for growth in waste traffic, but also re-location more immediately of important parts of CSX's existing food traffic and, perhaps, less immediately, their intermodal business, if not some role in the conversations taking place about E-W Passenger Rail introduction onto CSX's B&A.

What is CSX and, the other big players up against trying to execute all those plans?

Read it for yourself here.

https://www.pressherald.com/2022/04/12/ ... ms-delays/

Not trying to dampen enthusiasm here but just trying to keep the perspective real.
I am employed by a global company and, have been subject to "Corporate Decisions" like Newpylong mentions in his reply to my post regarding Suburban Propane. I mention this as the attached article fairly places the delay issues caused squarely on "Corporate Decisions" to cut staffing to minimum to maximize shareholder returns.

The good news is that long before the decision to go After Pan-Am they did their homework. We just have to wait to see what they do.

CPF66 wrote: That brings up the question, did CSX get to pick and choose who they solicited letters from? Just from a quick glance, it appears that primarily customers who the bulk of their traffic stays on the Pan Am network (Eimskip, Sappi, etc...) were the ones to file letters.

Anyone can file a letter and have it recorded on the docket, but not all will be weighted the same.


Sent from my SM-G981U using Tapatalk

johnpbarlow wrote: ↑Fri Apr 22, 2022 5:40 am Here are a couple of Pan Am relevant comments made by CSX execs at the 4/20/22 Q1 2022 earnings conference call with financial analysts:
--snip--

Sean Pelke, CFO: "--snip-- Pan Am will contribute about 1 point of annualized revenue --snip-- Pan Am will have a negligible impact on earnings --snip-- the capital we expect to invest to upgrade the Pan Am network is already contemplated in our guidance --snip--

You analysts can go back to sleep, we've got this, come back next year and we will talk about the upside. Pan Am (can I call it 747 Merger Sub 2 Inc, or is that just the PAS portion?) will cause a hit to earnings in the first or first couple of years, but it will be close to a rounding error and you won't notice. If it was a fire sale price then they would be crowing about how it is "accretive to earnings". I'm assuming CSX is paying a fair price, not a fire sale price and not a premium price. Is that assumption correkt?

PAS is a separate entity and will remain so. Systems are PAR and the predecessor roads/entities and will be absorbed by CSXT.