CSX Acquisition of Pan Am Railways

I know this may sound far fetched,but maybe CN is looking long term.Maybe NS will decide to pull out of Mass. and NY and sell those lines to CN.

I took a look at the CN and CP maps today. CP has basically got a pincer starting to go through New England as a result of their D&H and CMQ acquisitions. Their map also shows certain trackage rights which CN does not (at least where New England rights are concerned). CP has rights all over Vermont and is tantalizingly close to interchange with Pan Am at Wells River. PAS only goes to White River Junction.

Their map also shows trackage rights via Whitehall to Brattleboro and of course there's the direct interchange at Mechanicville.

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MEC407 wrote: ↑Wed Jul 01, 2020 4:11 pm And speaking of BMO... is there any significance to PAR's choice of BMO (Bank of Montreal) to handle the sale? For instance, would that signal that they were hoping for or expecting a Canadian buyer?

BMO and Pan am have an existing business relationship: BMO financed much of PAR's acquisition of ex-CSX locomotives.

As I noted over at Amtrak Forum, where the discussion should be directed only towards the impact upon The Downeaster, this UK publication seems to think Canadian National has strong interest in Pan Am:

https://www.railjournal.com/financial/p ... -for-sale/

Fair Use:

"Next, Canadian National (CN) is expanding its footprint into the United States. CN’s acquisition of the Messina Line in New York State from CSX has hit a snag at the STB, but it’s still under discussion.”

The source pointed to an interview between Railway Age editor in chief, Mr Bill Vantuono, and CN president, Mr JJ Ruest, where Ruest said CN was looking to develop a “roadmap” that would give customers information on where their freight was headed along the network.

“If CN owned the Pan Am it could put that on its roadmap. CN is also looking to create short multimodal lines in the US. So if CN took ownership of the Pan Am at Auburn, Maine, it could start building multimodal services that would feed its own network..

The noted RA material wss cited earlier in the discussion by Mr. Pennsy.

I'm at a loss how without a physical interchange between the two roads, there could be any interest. Mr. O'Keefe noted same earlier in the discussion.

Beyond the Short Line holding companies, such as G&Y, where there is no interest in physical connections between their properties, the last merger between unconnected Class I's with the 1964 combination between the N&W, NKP, and WAB. However, the N&W had a "sweetheart" purchase of a PRR line through Ohio from large shareholder Pennco (also conveniently owned Pennsy) thus affording a connection.

But absent such physical connection, I must ask how could operational efficiency result, and how could new traffic arise either from industrial development or from other modes such as highway?

Enquiring mind is "perplexed".

It should be noted that CN has brought back into the fold a number of lines it previously had spun off to
various shortlines- New Brunswick East Coast, Matapedia & Gulf, part of Goderich & Exeter and Mackenzie
Northern which was the former Northern Alberta Railway- purchased from Rail America in 2006. Makes me
wonder if there was language in the original sales agreements to facilitate reacquisition at a later date. Having
seen CN's geometry train on SLR in the past I wonder if there isn't more than a passing interest there. From
what I've read the failure of intermodal into Auburn seems partly due to the direction of traffic flows and
partly due to CN not being competitive with CSX on rates, insisting on premium rates or nothing. All that
being said I still find it hard to imagine there is enough traffic to interest CN considering the investment
it will take to upgrade the track. CP's stated purpose was to get back to an Atlantic port; CN is already
there and complaining that it's route into the Maritimes is underutilized.

It's no rumor the SLR has been for sale for quite some time. CN may go after both.

WOW. Well that would certainly make things interesting to say the least.

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Yeah, it's the only thing that makes sense here.

SLR would be by far the best option for CN if they take interest in PAR. The line itself is in good condition and, as I mentioned earlier, it can handle stacks and racks from Montreal to Rigby. IM and autorack potential is there if it's nurtured well.

One more thing to factor in is that Eimskip had big plans for Portland. The future cold storage facility will make the IMT an attractive logistics hub for maritime and non-maritime cold storage. Eimskip also has broader service enhancements planned including larger ships, US-Greenland service and partnership with CMA-CGM for Latin American transshipment.

The Canadians make most sense if it were done in the grand strategic context of mergers with CSX and NS or the final merger round the father of PSR thought necessary for the industry, though significantly influenced by the outcome of November's US election.

Of course, any deal will be informed by all parties' degree of sensitivity to the negotiated price and complexity of the deal.

Absent grand strategy and US balance of political power favoring Republicans, then the Canadians' motivation would either come from less-likely unrecognized market potential or more-likely (acceptance of) greater risk to achieve less-grand strategy and with greater probability that the parties would have to accept a more complex deal. Additionally, this would boost what could very well be the strongest competing interest, even in the most fertile environment for the Canadians: Genesee & Wyoming.

CN considered the Funk a lost csuse during '89; now apparently G&WY considers it same.

The Wiki article on SLR notes that Portland represented a maritime port less exposed to U-Boats during WWII, as Kriegsmarine decided Halifax and the St Lawrence basin represented more fruitful hunting grounds.

But WWII is over, and Halifax is established as a World Class maritime port - and "owned" by CN. Portland just seems to be a day stop for the Love Tubs.

Possibly I am overlooking something, but why would any road be seeking to acquire one without which they have a physical connection?

I still hold that NS is the logical "fit", but does logic always prevail within the rairoad industry?

Finally, while Chessie might see a mouse with an "eat me" sign, that simply will not happen. STB has carefully and wisely ensured that if there is any significant traffic sources, there will be two roads to serve it.

Gilbert B Norman wrote:Possibly I am overlooking something, but why would any road be seeking to acquire one without which they have a physical connection?

Mr. Norman,

If we assume there are some kind of barely used or obscure commercial rights that are not well understood then we might have an answer. Either NECR or SLR make sense in that context with or without acquisition (e.g. SLR) or reacquisition control (e.g. ex-CV NECR).



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The freezer facility in Portland is a very, very, very long way off. The NIMBYS don't want their VIEWs blocked by a large, rectangular building on the waterfront. Portland has a nice, small area for container activity. It does not have much room for expansion. CP has to start announcing what their plans are for St. John before anyone else will make a decision. I am sure Irving is watching these conversations very closely.

Agreed. The deal IMT & Maine Port Authority had in place with Americold fell through for reasons unknown. Possibly some source of traffic didn't materialize as expected. I have no idea and am simply speculating on that last point.

I remain mystified what residual rights (if any) CN may have that would rationalize this decision. I think there might be some we just don't understand.

I would also note the there is a case to be made for CN to make this acquisition as a defensive move against CP achieving dominance in New England. Although Maine is certainly not the source of traffic it once was there would be very few routes out of New England that CP wouldn't control if they bought Pan Am.

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I was thinking the same thing, and that seems like as plausible a reason as any — especially considering the timing.