UPDATE: CSX Files to Acquire Pan Am, G&W to Run Pan Am Southern

Pan Am Railways GP40-2 516 leads a train at Yarmouth, Maine, in July 2010. Photo by Justin Franz.

UPDATE: CSX Files to Acquire Pan Am, G&W to Run Pan Am Southern

UPDATED: Feb. 26, 4:50 p.m. EST

By Justin Franz

NORTH BILLERICA, Mass. — CSX Transportation’s acquisition of Pan Am Railways will result in a major “realignment” of the New England rail landscape, according to documents filed with the U.S. Surface Transportation Board this week and made public Friday.

As part of the deal, Genesee & Wyoming will operate Pan Am Southern — a joint venture between Pan Am and Norfolk Southern in Massachusetts, New York and Connecticut — and NS will get trackage rights over CSX’s Boston Line so that it can move double-stack trains to Ayer, Mass. The filing comes three months after it was first announced that CSX was going after the New England regional.

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. At the time NS was worried about CSX disrupting the venture that was designed to allow it to compete with CSX in the Boston market. To resolve those issues, CSX will own half of Pan Am Southern but Genesee & Wyoming will operate and maintain it. G&W will establish a new railroad called Berkshire & Eastern to operate the former Boston & Maine west of Ayer.

“The selection of a G&W affiliate is based upon our desire to maintain competition and enhance rail service in the New England market. G&W’s existing presence, relationships and experience will greatly assist the transition,” CSX officials wrote in a statement to Railfan & Railroad. “We look forward to integrating Pan Am into CSX, with substantial benefits to the rail-served industries of the Northeast, and to working in partnership with connecting railroads to provide exceptional supply chain solutions to New England and beyond. We are likewise confident that G&W’s subsidiary will bring similar benefits to PAS customers as the successful operator of PAS.”

Besides involving G&W, CSX will allow NS to run at least one intermodal train a day over its Boston Line to Worcester, Mass., where it will briefly go over the Providence & Worcester to Barbers before getting back onto Pan Am for the final run into Ayer. The trackage rights will allow NS to run double-stack trains into New England, something it cannot presently do because of Pan Am’s Hoosac Tunnel in Western Massachusetts. 

Pan Am east of Ayer will be integrated into the CSX system. According to the 375-page STB filing, CSX does not plan to dramatically alter operations but instead hopes to streamline them in order to better serve customers. 

“CSX intends to bring a very different operating philosophy to the integrated network,” officials wrote. “In the past few years, CSX has enhanced its operating philosophy to place greater emphasis on operating consistently and reliably, with careful data measurement and management to ensure accountability. A smaller rail network like the PAR System does not have the resources or scale of operations to implement the type of sophisticated operating systems and practices that CSX will bring to New England”

The application did note that Pan Am will abandon its branch from Oakland to Madison, Maine. The former Maine Central branch has been out-of-service for a number of years. 

In its filing, CSX also noted that the acquisition would give it access to the Port of Saint John in New Brunswick, which has been the subject of recent investment. Access to Saint John was one of the key factors in the Canadian Pacific’s decision to purchase the former Central Maine & Quebec in 2019. 

Pan Am’s system stretches 1,200 miles through Maine, New Hampshire, Vermont, Massachusetts, Connecticut and New York. It was created as Guilford Rail System in 1981. It was renamed Pan Am in 2006 after the company purchased the name and logo from the iconic air carrier of the same name eight years earlier.

This story will be updated when more information becomes available. 

This article was posted on: February 26, 2021