Front of a train

(updated) Amtrak CEO voices opposition to CSX-Pan Am Railways deal

By Trains.com -June 4, 2021

Passenger railroad says Pan Am deal in its current form will ‘negatively impact’ present and future passenger operations

WASHINGTON — Amtrak CEO Bill Flynn says the company opposes CSX Transportation’s acquisition of New England regional Pan Am Railways, saying the deal in its current form “represents a significant threat to the American traveling public” and “will negatively impact current passenger train service and future routes in Massachusetts and Northern New England.”

Amtrak has included several possible new routes in the region in its “Corridor Vision” plan, released late last month [see “Amtrak ‘Corridor Vision’ report addresses expansion plans …,”  Trains News Wire, May 27, 2021]. That document outlines the company’s goals for expanded state-supported regional services across the nation by 2035.

Flynn says in the statement that Amtrak’s primary consideration in this or any other merger is to ensure on-time performance of Amtrak trains over affected routes, and to “ensure we will have a good partner in seeking to improve and expand existing state-supported and long-distance routes as well as planned expansion to new routes.” It is clear the proposed deal, he writes, “will adversely impact the performance of Amtrak trains and threaten future growth opportunities.”

The statement comes against the backdrop of a continuing dispute with CSX (as well as Norfolk Southern) over efforts to relaunch passenger service between New Orleans and Mobile, Ala. [See “Amtrak asks STB to require CSX, NS to allow Gulf Coast service,” News Wire, March 16, 2021].

Flynn’s statement, available in full here, urges the Surface Transportation Board to take passenger service into consideration as it reviews the CSX-Pan Am deal. The statement does not specifically indicate whether Amtrak has filed a comment on the matter with the STB, and as of the close of business Friday, no Amtrak filing has been posted on the STB website.

CSX, asked about Flynn’s comments, responded with a statement saying, “CSX commits to maintaining or improving existing service on Pan Am both as to customers and passenger service.  We are confident that the pro-competitive acquisition of Pan Am will bring significant benefits to stakeholders in the Northeastern United States and beyond and look forward to presenting further detail illustrating those benefits.”

— Updated at 5:05 p.m. CDT with CSX statement.

CSX Transportation CEO remains confident about Pan Am acquisition

By Bill Stephens (June 3, 2021) Tains.com Online

Shippers and officials from federal, state, and local governments all have expressed support

Front of a train

A former CSX B40-8 leads a Pan Am Railways train at Plainville, Conn., on Feb. 6, 2021. CSX has filed its application to acquire Pan Am with the Surface Transportation Board. (Scott A. Hartley)

CSX Transportation remains confident that it will receive regulatory approval to acquire New England regional Pan Am Railways despite two setbacks at the Surface Transportation Board.

“We’re just in the early stages of seeking authority to complete the transaction from the Surface Transportation Board,” CEO Jim Foote told an investor webcast today. “And I’m confident just because of the positive nature of it. Clearly it improves the overall rail transportation network, especially in the New England region.”

Shippers and officials from federal, state, and local governments all have expressed support for the deal, Foote notes. “It’s been extremely well received,” he says.

When CSX announced it would acquire Pan Am Railways in November 2020, it sought to have the Pan Am deal treated as a minor transaction that would get a streamlined board review. But the STB in March ruled that the deal is a significant transaction requiring a more rigorous review process. CSX filed its more detailed merger application on April 26, but last week the board rejected it as incomplete.

CSX says it is working on getting the STB the information it has requested, including a full analysis of how the deal will affect railroad competition and rail-truck competition in New England.

Foote says a crucial element of the Pan Am acquisition is extending CSX’s customer-facing technology to Pan Am’s customers. Regional railroads like Pan Am can’t afford to make the investments necessary to develop sophisticated online tools like CSX’s ShipCSX customer portal, he says.

“In today’s marketplace, technology is a big deal,” Foote says, and customers don’t want to have to pick up the telephone to talk to a railroad.

“They want to go online … find out what the service is, click, and go – just like they do today with a truck,” Foote says.

The combination of improved customer technology and single-line service will help CSX traffic grow in New England, Foote says.

CSX hopes the Pan Am deal gains regulatory approval sometime in early 2022. The railroad had proposed a March 2022 date for closing of the Pan Am deal, but that date has been pushed back by the board’s request for more information.

Foote says he doesn’t believe the proposed Canadian National-Kansas City Southern merger will kick off a final round of Class I railroad mergers. But he said the wave of mergers since 1980 has made the industry stronger.

“You can make a case that consolidation might be good,” Foote says, noting that today’s seven Class I systems provide far better service than the 61 Class I railroads did in 1980.

“They were a basket case, their service was horrible, there was no capital investment,” Foote says. “And over the years the railroads consolidated into what they are today and the core infrastructure of the rail industry now is significantly better than it was. And, No. 1 and most importantly, the seamless nature and the single line service provided today is much better than it was.”

Foote spoke at the Bernstein Strategic Decisions Conference.

Stevens Notes on this

 After looking at the  Map of Pan Am Railways, I can see how the Pan Am routes will help Csx Transportion with service to NH, Vt, Ct and other route throught the Hoocsic Tunnel which will give CSX other way into New York, which will be really awesome to see CSX going through the Mighty Hoocsic Tunnel. The route into New York State on the Pan AM line will be great in case they ever have to detour trains off of the Boston & Albany Line. It mite also open up ways for Amtrak to bring service to New Hampshire and Vermont  to service more towns in both states. Let’s hear your comments about this, please use our Contact Form  to let us know what you think about this?

May 26,2021

Federal regulators reject CSX-Pan Am merger application as incomplete (updated)

By Bill Stephens – May 26, 2021

CSX ordered to provide more detailed view of deal’s competitive impact

Front of a train

A former CSX B40-8 leads a Pan Am Railways train at Plainville, Conn., on Feb. 6, 2021. The Surface Transportation Board has rejected CSX’s application to acquire Pan Am as incomplete. (Scott A. Hartley)

WASHINGTON — It’s back to the drawing board for CSX Transportation’s proposed acquisition of New England regional Pan Am Railways.

The Surface Transportation Board today rejected as incomplete CSX’s application to acquire control of Pan Am.

“The Board finds that the application fails to include all of the information needed to satisfy the Market Analysis required for a ‘significant’ transaction application,” the board said in its decision.

CSX can file a revised application that addresses the board’s concerns, and indicated that it plans to do so.

“CSX appreciates that the STB desires additional information,” the railroad said in a statement, “and we will provide it as expeditiously as possible. We are confident that the pro-competitive acquisition of Pan Am will bring significant benefits to stakeholders in the Northeastern United States and beyond and look forward to presenting further detail illustrating those benefits.”

This is the second strike against CSX in the merger application process. CSX initially sought to have the Pan Am deal treated as a minor transaction that would get a streamlined board review. But the STB in March ruled that CSX’s acquisition of Pan Am is a significant transaction requiring a more rigorous review process.

CSX filed its more detailed merger application on April 26. It included a market analysis that reviewed the deal’s potential impact on rail competition in New England, including the Pan Am Southern joint venture with Norfolk Southern. It also detailed CSX’s naming of a Genesee & Wyoming subsidiary, Berkshire & Eastern, as the neutral operator of Pan Am Southern and how that would affect neighboring short lines.

But the STB today said the market analysis missed the mark and had so many shortcomings it did not provide the board enough information to properly judge the merger.

“The Board finds that the Market Analysis and supporting verified statements do not sufficiently describe ‘the impacts of the proposed transaction — both adverse and beneficial — on inter-and intramodal competition,’ nor do they meet the other specific requirements for a Market Analysis, including the requirement for supporting data. Because the Market Analysis is incomplete, the Application will be rejected,” the decision reads.

The board also pointed out a contradiction in the application: CSX says that while it expects traffic growth over time, it does not expect significant traffic increases on Pan Am despite offering better service, track improvements, and extended market reach for the railroad’s customers. “If so,” the board said, “one would expect some growth in traffic volume.”

The board also sought more information about the effect plans to divert Norfolk Southern intermodal trains from the current routing via Hoosac Tunnel would have on Pan Am Southern revenue. As part of the Pan Am acquisition, CSX agreed to give NS trackage rights for its pair of daily intermodal trains that run to Ayer, Mass. The current route is via the former Boston & Maine main line from the Albany, N.Y., area to Ayer. The trackage rights would divert the trains to CSX’s Water Level Route near Albany, then onto the former Boston & Albany to Worcester, Mass., then to Ayer via a combination of Providence & Worcester, Pan Am, and Pan Am Southern trackage.

The STB said a revised merger application should include additional detail on the impact of the deal on railroads in New England; provide more information about how the merger would affect major traffic commodity groups on Pan Am and Pan Am Southern; outline rail competition that would exist after a merger; list all shippers whose options would be reduced from two railroads to one; and quantify the amount and types of traffic that would benefit from single-line service.

— Updated at 5:15 p.m. CDT with CSX statement.

 *Website Links from Above News Storys*