By Scott Lindsey
It has been just over one year since CSX completed its acquisition of Pan Am Railways, and Norfolk Southern is not pleased with the outcome thus far. As background, NS and Pan Am forged a partnership in 2009 designed to improve NS’ access into the New England market. That resulted in the creation of the Pan Am Southern, with each company owning 50 percent of the new railroad. This new company took over Pan Am Railways’ former Boston & Maine route between Ayer, Mass., and Mechanicville, N.Y., with operations supported by Pan Am’s Springfield Terminal Railway subsidiary. Thus, CSX gained 50 percent ownership in Pan Am Southern with its acquisition of the Pan Am parent company in 2022.
In its legal action, plaintiff NS is seeking preliminary injunctive relief pending arbitration against CSX and Springfield Terminal. It claims that the two defendants are “brazenly and repeatedly violating key contract provisions” associated with the Pan Am takeover. NS also claims that these violations are having a meaningful, negative impact on the financial and service performance of Pan Am Southern, and hurting NS operations into the Ayer intermodal and auto terminal.
NS’ court filing details a number of agreements for which it claims on-going violations by CSX. These include operating trains through Ayer Yard that exceed the agreed-upon lengths of 9,000 feet for through traffic and 4,750 feet for trains working the yard. CSX is also limited to one train pair daily on a section of Pan Am Southern trackage through Ayer, and NS claims this has been exceeded numerous times. CSX has also allegedly delayed work on Ayer terminal improvements and on clearance enhancements between Worcester and Ayer. The latter route is necessary for NS to start using a new routing into Ayer that will allow domestic intermodal containers to be double-stacked on Train 264 (Chicago-Ayer) and counterpart Train 265.
In addition, CSX agreed that a “neutral”, third-party railroad operator would take over operation of Pan Am Southern’s trackage from Springfield Terminal. This is to help prevent CSX from using its new ownership position to leverage business away from Pan Am Southern. The new operator is the Berkshire & Eastern Railroad, a wholly-owned subsidiary of Genesee & Wyoming. This transition was expected to be completed by late 2022 but was still being finalized as of mid-2023. CSX acknowledged that it has been working through the concerns expressed by NS, but that it will “vigorously defend itself” against this legal action.
