CSX to acquire Pan Am Railways in New England
Written by David C. Lester, Editor-in-Chief
David C. Lester
CSX yesterday announced that it has signed a definitive agreement to acquire Pan Am Railways, Inc. (“Pan Am”), the largest short line company/regional railroad in North America. Pan Am serves New England industries from northern Maine to New York’s Capital District.
The Pan Am network has connections to four Class 1 roads —Canadian National, Canadian Pacific, CSX and Norfolk Southern. In addition, the road connects to over 20 short lines and regional railroads. Pan Am owns and operates a highly integrated, nearly 1,200-mile rail network and has a partial interest in the more than 600-mile Pan Am Southern system. Pan Am’s network across New England has access to multiple ports and large-scale commodity producers. The transaction will expand CSX’s reach in Connecticut, New York and Massachusetts while adding Vermont, New Hampshire and Maine to it’s existing 23-state network.
CSX says that the transaction will provide significant benefits to shippers and local communities as CSX integrates Pan Am into its best-in-class network. CSX made nearly $1.5 billion in infrastructure capital expenditures in its network in 2019, supporting economic growth and ensuring the safety and efficiency of the supply chain.
According to James Foote, president and chief executive officer of CSX: “In Pan Am, CSX gains a strong regional rail network in one of the most densely populated markets in the U.S., creating new efficiencies and market opportunities for customers as we continue to grow. We intend to bring CSX’s customer-centric focus and industry-leading operating model to shippers and industries served by Pan Am. 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 and connecting railroads to provide exceptional supply chain solutions to New England and beyond.”
“Pan Am is pleased to reach this agreement with CSX, a North American leader in rail-based freight transportation. This is great news for New England shippers and the national freight network overall,” according to David A. Fink, President of Pan Am Railways.
While the terms of the transaction were not made public, the acquisition is subject to regulatory review and approval by the Surface Transportation Board.
RT&S reached out to Norfolk Southern for its comment on the proposed acquisition, as the CSX acquisition of Pan Am will change the competitive landscape.
NS spokesperson Jeff DeGraff said “In 2009 Pan Am Railways and Norfolk Southern negotiated a pro-competitive joint venture that resulted in the creation of Pan Am Southern. That transaction was approved by the Surface Transportation Board in large part because the joint venture provided competition in the marketplace. Over the last decade, Norfolk Southern has ensured the success of that venture, and remains committed to it today. We now understand that CSX is poised to acquire Pan Am Railways. We are carefully considering the effects of this transaction, especially any competitive harm to the marketplace. We remain committed to working with any potential Pan Am Railways purchaser, the STB, and any other applicable regulatory agencies to protect shippers, commuters and rail passengers throughout the New England market.”
RT&S will continue to follow this story as it develops.
