CSX Corp. gears up for public hearing for Pan Am Railways acquisition (Courtesy of the Jacksonville Business Journal) — CSX CEO Jim Foote and his executive team have to convince three people that the Jacksonville-based railroad’s desire to expand its presence in the Northeast will benefit freight transportation in this country.
The railroad will appear before the five-member Surface Transportation Board on Thursday and Friday as part of a public hearing about CSX’s quest to purchase Pan Am Railway.
A majority of the board will have to approve the deal for 1,200 miles of track in New York, Connecticut, Massachusetts, Vermont, New Hampshire and Maine for it to move forward.
Foote, CSX Executive Vice President of Operations Jamie Boychuk, Executive Vice President of Sales & Marketing Kevin Boone and acting CFO Sean Pelkey are expected to address the board during the virtual hearing.
Other participants include the President of North American Operations for Genesee & Wyoming Inc.. the shortline operator whose operational headquarters is in Jacksonville. As part of the application, CSX agreed that Genesee & Wyoming will operate Pan Am Southern, a line between western New York and Ayer, Massachusetts, that was jointly operated by Pan Am Railways and Norfolk Southern, in order to increase competitiveness in the region.
A variety of logistics providers including Swift Transportation and Javelin Global Commodities as well as shippers such as Poland Springs and Cushman Lumber Co. will also take part in the hearing.
Many of those speaking are expected to support the deal, but at least one slated participant is not: Amtrak
The passenger railroad’s concerns are many but boil down to the belief that the merger would impact passenger train service in the Northeast.
Amtrak’s recent attempts to work with CSX have “not reflected the promised willingness or good faith,” Amtrak wrote in a Jan. 3 brief filed with the regulator, pushing back on the railroads argument that Board should not impose a requirement to “cooperate” regarding expansion or modification of passenger service.
The Justice Department also opposes the deal, saying that the plan to have Genesee & Wyoming operate Pan Am Southern “does not adequately address the competitive concerns created by the proposed transaction.”
The Justice Department is not slated to speak during next week’s public hearing.
Neither is the state of Vermont, which had opposed the application until the state and CSX reached a settlement agreement in December, giving Vermont Rail Systems’ operations trackage rights on several parts of the network.
CSX says that the acquisition will allow it to provide more “truck-like” service, particularly on forest products shipped from the Northeast.
Its plans include improving Pan Am Southern trackage from a Class 1 designation, where its top freight traffic can be hauled at 10 mph, to a Class 2 designation, which would allow freight to be moved at 25 mph. A 7.6-mile stretch between Worcester and Ayer, Massachusetts would be improved to Class 3 standards, which would allow freight to move at 40 mph, the railroad said in a July 1 filing.