Pan Am Railways (PAR) Freight Traffic Volume

roberttosh wrote:Quite frankly, if there wasn't so much negativity on this site I would share a lot more information.

'Ol Bobby's in the know.

4266 wrote:Something I pointed out in another thread... NPR ran a story today about the Panama Canal expansion and the lack of suitable deep water port facilities in the northeast to handle the expected post Panamax container traffic. So far the only ports that come close to being able to handle these kind of loads are Boston and Halifax. Anybody have any idea of how this might affect New England railroads? Would a Boston container facility help or hurt PAR/PAS? Would PAR, SLR or MMA stand to gain from a post Panamax facility in Halifax?

Boston is a second-tier port; the increasing popularity of post-Panamax vessels ain't gonna help its case. Boston lacks: 1. significant capacity, 2. draft, and 3. direct (or even indirect) rail access. Halifax can handle larger vessels but has lost market share to Montreal and NY/NJ. (Interestingly, there's a new terminal planned on Cape Breton Island). If the trend to fewer, larger container ports continues (no reason it won't), you'll see NY/NJ (particularly once they get their draft issues worked out), Norfolk and Savannah as the the three key East Coast ports. Halifax will play a minor role, but ocean carriers are trying to maximize their haul, so will be more inclined to sail to NY/NJ than hand off to rails in Canada. (After all,why give the railroads the money?)

That's my long way of saying it's not going to affect New England railroading much.

Why MDOT thinks Searsport (or Eastport, for that matter) has half a chance in hades of becoming a niche player in this market is beyond me.

I'm assuming you're aware that the NY/NJ "Draft Issues" involve moving, demolishing or raising the Sorbonne Bridge. When was the last time the Port Authority simply "took care of" anything? Anybody been down to ground zero lately? All I'm saying is these ships will want to dock somewhere and there may not be anywhere north of Norfolk for them to do othat for the next twenty or so years. If Halifax or Cape Breton can make a good case then the Canadian routes stand to benefit.

This sounds like PAR will transform into a Deleware & Hudson, acting as a bridge line between the Canadian ports, and the Northeast rail container terminals. (It's kinda weird now that I think about it, seeing as how Guilford bought the D&H in 1984.)

4266 wrote:I'm assuming you're aware that the NY/NJ "Draft Issues" involve moving, demolishing or raising the Sorbonne Bridge. When was the last time the Port Authority simply "took care of" anything?

I'm not familiar with the "Sorbonne" Bridge. I assume you meant "Bayonne?" Yes, I'm aware of it. Several points: 1) the air draft issue does limit container vessel size, but smaller post-Panamax vessels can clear the bridge. 2) The Port Authority is evaluating options to locate a container terminal on the Atlantic side of the bridge. 3) While it will become a more pressing issue in the future, vessel size is not a crushing issue now. 4)NY/NJ has one thing that Halifax, Searsport, etc don't have: population (and the resulting local market). That is a factor that cannot be underestimated.

Mcoov wrote:This sounds like PAR will transform into a Deleware & Hudson, acting as a bridge line between the Canadian ports, and the Northeast rail container terminals. (It's kinda weird now that I think about it, seeing as how Guilford bought the D&H in 1984.)

I don't see that happening at all. Most of their traffic is online generated or destination, including intermodal.

Cowford wrote:

4266 wrote:I'm assuming you're aware that the NY/NJ "Draft Issues" involve moving, demolishing or raising the Sorbonne Bridge. When was the last time the Port Authority simply "took care of" anything?

I'm not familiar with the "Sorbonne" Bridge. I assume you meant "Bayonne?" Yes, I'm aware of it. Several points: 1) the air draft issue does limit container vessel size, but smaller post-Panamax vessels can clear the bridge. 2) The Port Authority is evaluating options to locate a container terminal on the Atlantic side of the bridge. 3) While it will become a more pressing issue in the future, vessel size is not a crushing issue now. 4)NY/NJ has one thing that Halifax, Searsport, etc don't have: population (and the resulting local market). That is a factor that cannot be underestimated.

OK you definitely got me On that one... I really have to figure out how to turn off my autocorrect!

Anyway, all I'm really saying is I think the Port Authority may drag on so long that it may create opportunities for smaller ports that look disadvantaged on paper but may be able to upgrade faster for political reasons.

Not trying to get you, man!!

I totally agree that there are no quick fixes for NY/NJ regarding the draft issue, but it's very unlikely they are going to lose market share due to their geographic location relative to US population centers. You can draw a comparison using Prince Rupert, BC vs LA/LB. PR is a very modern, efficient port, closer to China, good rail service, plenty of capacity and is not saddled with the union and environmental issues of LA/LB. There is no local demand at PR, most containers are destined for upper Midwest US. About 65% of volume through LA/LB stays moves inland. July YTD volume: LA/LB 7.8 million TEUs; PR 0.2 million TEUs.

Like PR, Halifax (and/or the planned Cape Breton port) may play a niche, but the traffic tends to flow to/through where the people are. (Look at airline hubs: None located outside a major metropolitan area has been successful.)

I can't picture any way where Searsport or Boston for that matter will be anything more than small niche ports and that would even have to be considered a stretch for Searsport. As others have pointed out, Boston doesn't and never will have the space, nor will it ever have direct on dock rail. Those factors alone nail the coffin shut, not to mention incredibly high labor costs, which themselves would kill any major growth opportunity. Searsport is on a regional/shortline and how many world class ports in this country can say that? Class ones don't want to share their revenue and thus would not offer attractive pricing. As Cowford pointed out, there is virtually no local market near Searsport and one has to go over 200 miles from there just to reach the north side of Boston. Searsport also wouldn't have many routing options, pretty much only CPRS, which would be a problem as most big conatiner ports have dual access (i.e. NY/NJ, Hampton Roads, Savanah, LA/Long Beach, Oakland, Seattle/Tacoma) and that's what the steamship lines want. Searsport also doesn't have any good way of routing containers to some of the big growth areas such as the Ohio River Valley where both CSXT and NS are now spending a lot of money to access. The bottom line is that there are just way too many major obstacles and too much existing, entrenched competition for these ports to overcome to make any real noise in this marketplace.

For bridge container traffic -- Asia to Europe -- as opposed to U.S. destinations, the argument in favor of non-market ports can be pretty strong, particularly Canadian non-market ports on the Pacific and Atlantic. Think Great Circle routing: The further from the Equator, the less geography, liquid or solid, needs to be transited. Less geography means less time means quicker turnaround of money, goods, and equipment. From Prince Rupert to your choice of an adequate Maritimes port, as contrasted to LA/LB or even Seattle to your choice of U.S. Atlantic port, for bridge traffic will have significantly shorter marine and overland distances. Panama is gambling on trying to keep the Canal relevant as it approaches its centennial, but the potential time-savings of a Canadian land-bridge route coupled with the economies of scale of mega-container ships would seem clear.

I don't believe there's much of a market for Asia-European container traffic going across North America by landbridge. By the time you go across the Pacific ocean, transload to train, go across the North American continent, transload back to boat, then go across the Atlantic, you're talikng about quite a bit of time and money. A routing through the Suez is much more efficient as would be an even longer routing around the horn of Africa. The same port dynamics are the reason why most Asian freight bound for the Northeast U.S. goes right past Rupert, Vancouver and Seattle and ends up at a more southerly port - LA/Long Beach. Boats definately get to those other ports first and it's a shorter rail distance from say Seattle to the NY metro area then it is from LA/Long Beach, but again, the steamship lines want to go to LA/Long Beach beacuse there's 20 million people living within 100 miles of the port. If those economics you described were there, places like Rupert and Halifax would be booming, which is clearly not the case.

Tosh is right. Look at mileage: Shanghai to Rotterdam is about 10,000 NM via Suez. Via Prince Rupert-land bridge-Halifax: 7,745 NM + ~4,000 statute miles by rail. The Suez would have the better transit time and much better cost position. Along the land-bridge issue, it should be noted that a lot of vessels are sailing from Asia through the PC to call on East Coast ports directly, bypassing West Coast ports altogether. Slower but cheaper.

It seems to me that right now ANY port north of Norfolk has a lot of obstacles to overcome so it may be years before we see any major shift in shipping patterns. But at what point do the potential profit gains from shipping directly to the east coast offsetthe cost of upgrading facilities, moving bridges, improving rail access? I'm not sure, myself. Just asking... Is there ANY scenario in which one may envision a shift in shipping patterns that could significantly affect PAR/PAS traffic volume?

Even though there's been considerable (NAVIGATION TERM ALERT!) yawing from topic, don't give up on a Trans-Can landbridge yet. The approaches to Suez are not in conflict-free zones, and even minor conflicts can escalate.

4266 wrote:Is there ANY scenario in which one may envision a shift in shipping patterns that could significantly affect PAR/PAS traffic volume?

Even with improvements in service, clearing the entire PAR/PAS route for double-stack, fuel price changes (higher or lower)... I can't think of any. Maybe if (1) manufacturing moved west from China to India and Suez routings were much more prevalent, and (2) East Coast US ports suffered congestion that led to Canadian ports capturing a share of Northeast/Mid-Atlantic market share??? Tosh?