RAIL BARON IN THE BERKSHIRES.

Northern New England is to the freight railroad network as the appendix might be to the digestive system.  The gross product originating in the Boston area can be shipped out in lobster barrels or as packets of pixels.  There's still a fair amount of newsprint, toilet paper, and lumber production in Maine and the northern reaches of New Hampshire, but not much by way of inbound shipments.  One reason the major carriers, New Haven and Boston and Maine were in and out of bankruptcy in the middle part of the twentieth century is that the inbound shipments tailed off, and the outbound traffic wasn't enough to load the inbound cars.  And the potato distribution became unreliable.

That doesn't mean the eastern trunk carriers have had no interest in the principal freight railroad of the region, currently trading as Pan Am Railroad (yes, with the blue and the globe of the old airline); previously Guilford Transportation, and for a brief shining moment as the affiliated Boston and Maine and Maine Central.  Norfolk Southern worked out a traffic agreement with Pan Am for running powers over part of Boston and Maine.  More recently, CSX, which have their own route into Boston over the former Boston and Albany, expressed interest in buying Pan Am out.

Clearly CSX sees potential in Pan Am, perhaps as a way to build on its dominant presence in New England. If so, it’s a turnabout for CSX, which has been retreating from New England since the 1999 acquisition of Conrail. It sold the former Boston & Albany main line east of Worcester to the state a decade ago for increased MBTA commuter train use, and its Beacon Park yard in Boston was ripped up for redevelopment. CSX has disposed of some Boston-area branches and just last month leased a branch to short line Grafton & Upton.

Yet CSX’s former Boston & Albany main line remains the primary freight artery serving the region from the west and handles more than a dozen trains per day. Among them: A daily merchandise train in each direction that link CSX’s hump yard at Selkirk, N.Y., with Portland, Maine, via Pan Am interchange outside of Worcester, Mass. CSX and Pan Am also interchange some merchandise traffic and unit grain trains at Rotterdam Junction, N.Y., the west end of the former Boston & Maine.

NS, in contrast, runs just two pairs of trains over Pan Am daily, a merchandise train to and from the former B&M hump yard at East Deerfield, Mass., and an intermodal/auto train to Ayer, Mass., the eastern extent of the Pan Am Southern.

It is unclear what CSX would gain from acquiring Pan Am, aside from a longer haul on traffic it already enjoys, including paper and forest products produced in the Pine Tree State and neighboring New Brunswick.

Pan Am does have an impressive growth pipeline, which railroad President David Fink outlined in a presentation at the North East Association of Rail Shippers conference in September. Maine paper mills have come back from the dead after shifting production from paper used in printing to high-demand paper used in packaging. Pan Am has other traffic on the rise, too, including propane, biodiesel, municipal solid waste, aggregates, and Poland Spring water.

“Railroads in New England have to be hardscrabble,” Fink says. “So if one thing doesn’t work we pivot to something else. And that’s what we’ve always done. And everyone else that connects with us has done the same thing.”

In that disinvestment by CSX in the former Boston and Albany might be the reason for its interest in Pan Am.  The Boston and Albany west of Worcester is primarily a single-track railroad, and Amtrak cooperate with CSX in construction season by replacing the Boston section of the Lake Shore with a bus.  Passenger Rail advocates in Massachusetts would like to add passenger train service to western Massachusetts, in order to provide business, shopping, and recreational-friendly service for Springfield and Pittsfield and possibly as far as Albany.  Get the freight trains off that single track, which hacks its way over the Berkshires, and onto Boston and Maine's Hoosac Tunnel line, which has an easier crossing of the main spine of the Berkshires (it's a wash on the crossing of the coastal ridge that makes up the east bank of the Connecticut River) and sell the tracks to the Commonwealth, with freight running powers to Providence and Worcester.  That would be the end of the interchange at Worcester, which is a survival of Boston's curious railway geography: the shipments headed to the New Haven for New York or the Alphabet Route would be handed off at Worcester; Boston and Maine preferred to keep traffic for New York Central on their own rails to Rotterdam Junction and Crescent in New York.

At the end of November, CSX have a new train set in time for Christmas.

Including haulage rights, Pan Am stretches 1,700 miles from the Albany, N.Y., area to Maine. It includes trackage of the former Maine Central, Boston & Maine, Portland Terminal, and Springfield Terminal railroads. Pan Am connects with four Class I railroads — CSX, Norfolk Southern, Canadian National, and Canadian Pacific — and 14 short lines. It also operates over Massachusetts Bay Transportation Authority commuter lines in the Boston area and hosts Amtrak’s Downeaster service linking Boston with Portland, Maine.

CSX connects with Pan Am at Rotterdam Junction, N.Y., on its former New York Central Water Level Route, and outside of Worcester, Mass., via its former Boston & Albany main line, which is far and away the busiest freight route in New England.

Norfolk Southern are seeking regulatory protections to accompany the transaction.

Word first leaked in early November that CSX was making a move for Pan Am when Norfolk Southern filed a preemptive objection with the STB to any deal between the two carriers. NS has a joint venture with the New England regional called Pan Am Southern that includes more than 400 miles of track in Massachusetts, New York and Connecticut. The venture dates back to 2009 and allows NS to go head-to-head with CSX in the Boston market.

“NS is concerned with CSX’s potential acquisition of Pan Am, specifically its interest in PAS, and is further concerned with CSX’s potential use of a voting trust to acquire Pan Am,” an attorney for NS wrote. “One of the main benefits of NS’ and Pan Am’s joint control and ownership of PAS was to strengthen competition with CSX… Any CSX effort to acquire Pan Am would threaten to materially undermine this existing competition, thus impacting not only NS but also rail shippers and other railroads.”

The letter also notes that NS was “given certain rights in the event of a ‘change of control,’” including the establishment of a voting trust.

As of Monday, the STB had not responded to NS’ objection and it’s unclear if the issues have been resolved behind the scenes. Earlier this month, a CSX spokesperson told Railfan & Railroad that the carrier was working directly with NS to “understand any issues they might have.”

In the alternative model railroad world of Cold Spring Shops, Boston and Albany had a friendly connection as far north as central Maine in the form of the State of Maine Northern. Reality sometimes imitates the model.