Third Time’s A Charm? CSX Tries Again to Acquire Pan Am

On Friday, CSX had submitted its third application with the U.S. Surface Transportation Board to acquire the New England regional. Photo by Justin Franz.

Third Time’s A Charm? CSX Tries Again to Acquire Pan Am

By Justin Franz 

WASHINGTON — For the third time since February, CSX Transportation has filed an application with the U.S. Surface Transportation Board to acquire New England’s Pan Am Railways.

On Friday, the railroad announced it had submitted an “amended and supplemented application” to the STB in an effort to convince the federal regulator that the proposed transaction would be good for shippers and passengers alike. CSX first submitted its plan to acquire Pan Am back in February but a month later it was rejected after the board deemed it would be a “significant” transaction. In April, CSX filed a 478-page amended application. But in May, the board said that was not enough either and that the new application didn’t have a “market analysis” looking at how the deal might impact the New England rail network.

On the same day that CSX submitted its revised application to the STB, it also launched a new website, nefreightrail.com, to convince the public of the merits of the combination. 

“CSX is pleased to submit an expanded application for the acquisition of Pan Am Railways, which explains the tremendous benefits of the proposed transaction for stakeholders in New England and beyond,” said CSX President and CEO James M. Foote. “The proposed transaction is an ‘end-to-end’ acquisition that will integrate the New England rail network owned by Pan Am into CSX’s national rail network, creating seamless single-line service. This will provide substantial benefits to shippers with low-cost, environmentally-friendly rail service with truck-like reliability.”

The website touted the economic and environmental benefits of a CSX takeover. It also vowed to spend a significant amount of money to improve Pan Am’s track and infrastructure. Specifically, CSX states that it wants to increase speeds on Pan Am’s 10 mph main line to 25 mph.

Late last year, CSX announced that it would purchase Pan Am for an undisclosed amount of money. As part of the proposed plan, Genesee & Wyoming would operate Pan Am Southern — a joint venture between Pan Am and Norfolk Southern — and NS will get trackage rights over CSX’s Boston Line so that it can move double-stack trains to Ayer, Mass. The new G&W line would be called Berkshire & Eastern. CSX would operate the railroad east of Ayer, Mass., into New Hampshire and Maine. 

“Pan Am remains excited about this merger with CSX, a North American leader in rail-based freight transportation,” said Pan Am President David A. Fink. “We have continued to receive support from our customers about the transaction as they know that CSX’s investment in the region will benefit not only New England shippers but also those who will have new access to their goods and products through the direct connection into CSX’s national rail network.”

CSX’s plan to acquire Pan Am has been met with a chorus of skepticism from state governments, completing railroads and passenger operators. Perhaps the most damning statement came from Amtrak President Bill Flynn who called the proposed deal “a significant threat to the American traveling public.” Flynn specifically said that the proposed acquisition could negatively impact Amtrak’s plans to dramatically expand passenger rail service in New England, as outlined in its recently released corridor plan. Amtrak wants to expand service to 160 new communities across the country before 2035. 

This article was posted on: July 2, 2021