Pan Am Railways
|Founded||1981 (Guilford Transportation Industries)|
2006 (Pan Am Railways)
|Fate||Purchase by CSX pending|
David A. Fink
Number of employees
|Parent||Pan Am Systems|
|Subsidiaries||Boston and Maine Corporation|
Maine Central Railroad Company
Portland Terminal Company
Springfield Terminal Railway Company
Pan Am Railways, Inc. (PAR), known before March 2006 as Guilford Rail System, is an American holding company that owns and operates Class II regional railroads covering northern New England from Mattawamkeag, Maine, to Rotterdam Junction, New York. The primary subsidiaries of Pan Am Railways are Boston and Maine Corporation, Maine Central Railroad Company, Portland Terminal Company, and Springfield Terminal Railway Company.
Pan Am Railways is headquartered in Iron Horse Park in North Billerica, Massachusetts. It is a subsidiary of Portsmouth, New Hampshire-based Pan Am Systems, formerly known as Guilford Transportation Industries. Guilford bought the name, colors, and logo of Pan American World Airways in 1998.
Pan Am was put up for sale in July 2020. On November 30, 2020, CSX Transportation announced that it had signed a definitive agreement to purchase Pan Am Railways, Inc. The sale of Pan Am to CSX is currently subject to regulatory review and approval by the Surface Transportation Board.
During much of the 20th century, heavy manufacturing industry tended to move out of New England, making the region primarily a receiver of freight traffic rather than an originator. Originating freight or carrying it long distance is far more profitable than final delivery or short-haul. New England's railroads have long been handicapped by traffic flow that makes them delivery agents for other railroads and by short distances. Practically the longest one-railroad haul in New England was Boston & Maine's (reporting mark B&M) route from the Hudson River to Portland, Maine, 267 miles (430 km) — less than one-eighth of the distance from Seattle to Chicago on the BNSF Railway.
A merger consisting of the B&M, the Maine Central Railroad (MEC), and the Delaware & Hudson Railway (D&H), along with one or more other New England railroads, was proposed as long ago as 1929 by the Interstate Commerce Commission (ICC) as part of its nationwide merger proposal. Frederic C. Dumaine, Jr., president at various times of the New York, New Haven & Hartford Railroad (NH), the Bangor & Aroostook Railroad and D&H, proffered much the same idea. The benefits of such a merger would include economies of scale and longer hauls.
In 1977, Timothy Mellon, heir of the wealthy and influential Mellon family of Guilford, Connecticut, teamed up with ex-Penn Central employee David Fink to form Perma Treat, a railroad tie treatment company. Mellon wanted to acquire a railroad and considered several: Illinois Central Railroad and the Detroit, Toledo & Ironton Railroad. None of those acquisitions happened, but Mellon's interest in railroads continued. The passage of the Staggers Rail Act in 1980 allowed Mellon and Fink to execute a business plan (unlike those of earlier railroads in the region), centering on buying up as many local railroads as possible, thus creating full horizontal integration over New England and the northern Mid-Atlantic states, and gaining efficiencies of scale.
In June 1981, Mellon purchased MEC and its wholly owned subsidiary Portland Terminal Company (then owned by U.S. Filter Corporation) through his holding company, Guilford Transportation Industries. In June 1983, the B&M became the second piece of the Guilford system, bringing with it a subsidiary, the 6.5-mile (10.5 km) Springfield Terminal Railway, a former interurban line connecting Springfield, Vermont to Charlestown, New Hampshire. The Springfield Terminal subsidiary continues to exist and houses most of the operational side of the entire company including train crews and dispatch.
The formation of Penn Central (PC) in 1968 and its takeover of the NH at year's end had left New England with only one non-PC connection to the rest of the country: B&M's interchange with D&H at Mechanicville, New York. The D&H made a logical extension to the Guilford system — and a necessary one if Guilford was to be more than a terminal company for Conrail traffic moving into New England. D&H was surrounded by Conrail and not doing well. The state of New York, which had financed much of D&H's rehabilitation program, approached Guilford about acquiring the railroad. In October 1981, the Norfolk & Western Railway, which owned D&H through a subsidiary holding company, agreed to sell it to Guilford. The purchase was completed at the beginning of 1984.
By the time the Guilford system was formed, the one-time multiplicity of connecting railroads had become a single, healthy, well-managed railroad: Conrail. Any New England-bound traffic Conrail originated would move as far as possible on Conrail before being handed over to Guilford (e.g. to Springfield, Massachusetts, rather than Buffalo, New York), and it would move faster. The Guilford remained a short-haul, terminating railroad.
Guilford's first few years were defined by abandonments, labor unrest and strikes, and a draconian management style that damaged the company's reputation. The railroad struggled financially to turn a profit and implemented cost-cutting measures. Guilford then began to shrink its system by eliminating marginal low-density routes.
MEC's Mountain Division from Portland, Maine, to St. Johnsbury, Vermont, carried almost no local traffic and served only to give MEC a connection with a railroad other than B&M. With the formation of the Guilford system, it was deemed redundant. B&M was now part of the family, and interchanging traffic with the Canadian Pacific Railway (CP) at Mattawamkeag, Maine, was easier than battling the grades of Crawford Notch in New Hampshire. A section in New Hampshire was salvaged and reborn as the Conway Scenic Railroad.
Similarly, the only business on MEC's Calais Branch from Bangor to Calais, Maine, was at the extreme eastern end, which could be reached by CP. Service on most of the branch was discontinued, and the line was sold to the Maine Department of Transportation (MaineDOT). The remaining service in Calais serves a pulp mill in Woodland and is operated by ST; MaineDOT leases a 10-mile (16 km) segment between Brewer and Ellsworth to the Downeast Scenic Railroad. The remaining 85-mile (137 km) Ellsworth-Calais segment was leased to the Downeast Sunrise Trail, an interim rail trail.
MEC's Rockland Branch from Brunswick to Rockland, Maine was also on the chopping block, as was part of the Lower Road; the Portland-Waterville route via Augusta, Maine. This branch would later be sold to MaineDOT and operated on its behalf by the Maine Eastern Railroad until the end of 2015 when operations were transferred to the Central Maine and Quebec Railway (CMQ). The operation of this branch would soon be transferred to CP, upon that rail system's acquisition of CMQ.
Labor disputes and mismanagement
Guilford announced layoffs, shop closings, and pay cuts. MEC's maintenance workers went on strike in March 1986, and the strike spread to B&M and D&H. To take advantage of a lower wage scale and more flexible work rules that apply to shortline railroads, Guilford began leasing portions of the MEC and B&M to B&M subsidiary Springfield Terminal (ST) for operation. This saved money for Guilford, but angered labor, resulting in another, more lengthy strike in 1987. In 1988 an arbitrator on behalf of the ICC ruled that Guilford could not lease the D&H to ST and had to abide by pre-ST labor agreements. The ruling precipitated the D&H bankruptcy. Guilford withdrew from D&H and informed the federal government that they were going to cease operations. The New York, Susquehanna and Western Railway was ordered by the federal government to operate the railroad under subsidy until a buyer could be found. Even though the NY&SW placed a bid of their own for the railroad, in 1991 the D&H was sold to CP Rail, where it grew into a more prosperous railroad than it had been during Guilford's tenure. The Philadelphia Inquirer later commented that Guilford had "become the bane of organized labor for a harsh, confrontational approach to trimming costs." Most railroad executives dismissed Mellon as a wealthy heir who suffered from gross mismanagement, possessed a willful misunderstanding of the inner workings of a railroad, and was a "stubborn ideologue".
Guilford proved to be an unwilling participant in assisting Amtrak on several occasions, forcing the U.S. federal government to get involved. The company had two north-south routes to Canada, the D&H line north from Albany and B&M's Connecticut River Line. The D&H line was in better condition, so Guilford downgraded the B&M route, reducing maintenance. Complications arose. B&M and the Central Vermont Railway (CV) each owned a portion of the route. South of Brattleboro and north of Windsor, Vermont, CV maintained its track so that good speeds were possible, but between those two points was a 50-mile (80 km) stretch of B&M track, much of it limited to 10 mph (16 km/h). Amtrak, whose Montrealer used the route, found the slow running intolerable. The train was suspended in 1987, and the ICC ordered B&M to sell the Windsor-Brattleboro segment to Amtrak, which immediately resold it to CV, who rehabilitated the track. The Montrealer was restored in 1989 on a new route: CV all the way from New London, Connecticut, to Cantic, Quebec, bypassing B&M entirely.
Service on Amtrak's new Downeaster line between Boston and Portland was delayed when negotiations between Guilford and the national passenger carrier slowed due to the former's issues with equipment weight and speed limits. In December 1998, a speed limit of 79 miles per hour (127 km/h) was agreed upon between both parties, with the Surface Transportation Board (STB) approving it in 1999. Guilford then refused to assist Amtrak with any track improvements, forcing the STB to deal with Guilford on Amtrak's behalf. Track upgrades were eventually made in 2000, but the proposed 2001 start-up was further delayed when Guilford refused to allow Amtrak speeds in excess of 59 miles per hour (95 km/h) (despite STB approval of 79 mph), as well as prohibiting Amtrak from operating test trains. Again the STB informed Guilford that they were in violation of their agreements signed with Amtrak. Downeaster service finally began on December 14, 2001.
In 1985, Guilford entered into an agreement with Norfolk Southern Railway (NS) to run trains to St. Louis. NS was attempting to win approval of a plan to purchase Conrail from the U.S. government and proposed allowing Guilford to lease Conrail lines to St. Louis in order to restore competition that would be lost in the merger. The plan would have allowed Guilford to use the Conrail mainline from Toledo to Ridgeway, Ohio, and from Crestline, Ohio, to St. Louis. Guilford would also purchase 955 miles (1,537 km) of Conrail track and 1,300 freight cars from Norfolk Southern for $53M. NS did not prevail in its attempt to purchase Conrail in 1985, and the Guilford plan was dropped. In 1987, Guilford also placed a bid to buy Southern Pacific.
The paper industry provides the largest source of business, with chemicals, clay and pulp inbound, and finished paper outbound. But the railroad has been losing ground to other forms of transportation - particularly trucking. A 2008 report issued by the American Society of Civil Engineers rated Maine at 48th of the 50 states in volume of freight traffic that moves by rail. The Maine Motor Transport Association web page reports that trucks transport 94% of total manufactured tonnage in Maine.
Despite the general growth in freight transport throughout the US, Guilford's growth remained stagnant after an initial increase in the 1990s. After the creation of Pan Am Railways, traffic dropped considerably. A report issued by MaineDOT listed traffic on MEC as being 162,658 loads in 1972. As of 2008, Pan Am traffic over the remaining portions of MEC was estimated to be less than 69,000 loads. During the same time span, the Association of American Railroads estimates that freight traffic throughout the US more than doubled.[failed verification]
Pan Am Railways (2006-present)
In 1998, Guilford bought the name, colors, and logo of Pan American World Airways. In March 2006, Guilford Transportation Industries changed its name to Pan Am Systems, and Guilford Rail System was rebranded as Pan Am Railways (PAR). Then in March 2009, PAR was ordered to pay the largest corporate criminal fine in Massachusetts history — $500,000 — due to the company's negligence to report a spill of hundreds of gallons of diesel fuel in violation of state and federal environmental laws and regulations.
As of 2011, PAR employs 750 people and has a $40 million payroll. The company continues to operate with subsidiary entities bearing the names of former railroads which over time formed the present-day company. The company's assets are housed separately in these various subsidiaries for various reasons. For example, the Boston and Maine Corporation owns the railroad property itself while the Springfield Terminal branch operates the railroad (most of the company's employees are under the Springfield Terminal umbrella.) Meanwhile, the Maine Central entity owns rolling stock.
On May 15, 2008, NS announced that it had come to an agreement with PAR to "create an improved rail route between Albany, New York, and the Boston, Massachusetts, region, named the Patriot Corridor. The STB approved the deal on March 10, 2009, with each railroad owning 50% of a new company known as Pan Am Southern (PAS). PAR's trackage between Ayer, Massachusetts, and Mechanicville, New York, was transferred to PAS and continues to be operated and maintained by PAR's ST subsidiary. NS transferred to PAS cash and property valued at $140 million.
Improvements to the route include track and signal upgrades, and expansion of terminals, including construction of new automotive and intermodal terminals in Ayer and Mechanicville. In March 2012, the Federal Railroad Administration awarded a $2-million grant to the Massachusetts Department of Transportation for preliminary engineering on removing 19 obstacles to allow double stack container trains to use the Patriot Corridor route. The project includes raising clearance by two feet in the 4.75-mile (7.64 km) Hoosac Tunnel.
Disputes with local governments
Pan Am was put up for sale in July 2020. On November 30, 2020, an agreement was announced for CSX Transportation to acquire Pan Am Railways. Norfolk Southern has expressed concern about possible impacts on competition. The sale was proposed as follows: CSX will own and operate between Mattawamkeag, ME and Ayer, MA. Between Ayer and Rotterdam, NY, Genesee and Wyoming Rail will be the operating party. This means the track will be owned by CSX but CSX will not dispatch it. Also, Norfolk Southern will keep its 49% stake in Pan Am Southern (PAS). With the sale, the intermodal traffic between Mechanicville and Ayer will be re-routed over the B&A to Worcester, MA. From there the traffic will come up the Worcester main and into Ayer Yard.
On March 25, 2021, after numerous letters questioning CSX's acquisition of Pan Am Railways from the Massachusetts Bay Transportation Authority, the Massachusetts Department of Transportation, the Commonwealth of Massachusetts, Vermont Rail System, as well as many other local political figures and community leaders from other New England states, the Surface Transportation Board ruled the acquisition as "Significant" meaning that a more rigorous review process would be necessary.
On April 30, 2021, CSX submitted a 478-page plan of purchase outlining a broad range of topics, from implementations of track upgrades to the controversial issue of Norfolk & Southern intermodal routing, as well as the fate of Pan Am's hodgepodge fleet of aging motive power, which is made up of EMD and GE locomotives from railroads such as Conrail, NS, CSX, the Milwaukee Road, and Kansas City Southern.
On May 26, 2021, the federal regulators of the Surface Transportation Board rejected CSX's purchase application, deeming it "incomplete." The board cited "contradictions" and "lack of necessary information" to properly judge the acquisition, and therefore could not rule on the matter. While CSX has the option of re-submitting a revised application, which it has motioned toward in its official statement, the transaction stands on uncertain ground.
On July 30, 2021, the Surface Transportation Board accepted a revised merger application for consideration, allowing CSX to move forward with the acquisition on Pan Am Railways and its short-line subsidiaries. The decision determined that an environmental and historic review are unnecessary and establishes criteria for additional filings, public comments, and a deadline for a final Surface Transportation Board decision.
- MEC: European and North American Railway, MEC mainline
- B&M: B&M mainline, Lowell and Andover Railroad
- Boston & Lowell Railroad: Nashua & Lowell Railroad, Stony Brook Railroad
- Fitchburg Railroad: Fitchburg Railroad mainline, Vermont & Massachusetts Railroad, Troy and Greenfield Railroad, Southern Vermont Railroad, Troy & Boston Railroad, Boston, Hoosac Tunnel & Western Railway
This table possibly contains original research. (February 2016)
This section may contain an excessive amount of intricate detail that may interest only a particular audience.(April 2018)
|007||MEC||EMD SW1||1, ex-PRR|
|1, 2||PAR||EMD FP9||2, ex-CN units, where they were originally numbered as 6505 & 6516, later Via Rail, and also on New Hampshire's Conway Scenic Railroad between 1995 & 2009|
|305‑307, 310, 313, 315‑317, 319, 321||MEC||EMD GP40||10, 305 & 306 ex-CR/PC/NYC, remaining 307 to 321 ex-CR/PC|
|326‑327, 330, 334||BM||EMD GP40||4, ex-CR/PC|
|345, 350‑354, 381, 383||MEC||EMD GP40||7, 345 ex-CR/PC, GMTX owned rebuilt to GP40‑2, 350‑354 ex-CR/PC/EMD, 381 ex-CSX/SBD/SCL, 383 ex-GMTX/CSX/BO|
|501‑508||MEC||GMD GP40-2L(W)||8, ex-CN, 503, 506, 507 & 508 GMTX owned|
|509‑512, 514‑519||MEC||EMD GP40-2(W)||10, ex-CN, 515, 518 & 519 GMTX owned|
|600, 604, 606, 619||MEC||EMD SD40-2||4, ex-KCS/TFM/SP/ATSF/SCL/MILW|
|3400‑3405||MEC||EMD SD40-2||6, 3400‑3404 ex-QNSL, 3405 ex-HLCX/TRC, GMTX owned (3405 was originally numbered 616)|
|5930, 5933, 5936, 5943, 5946, 5948, 5953, 5956, 5958, 5963, 5966‑5968, 5972‑5974, 5976||MEC||GE B40-8||17, ex-CSX/CR/NYSW|
|7489, 7500, 7517‑7518, 7523, 7528, 7534‑7535, 7541‑7542, 7545, 7552, 7561, 7575, 7585, 7594‑7595, 7605, 7609, 7620, 7622, 7627, 7635, 7643||MEC||GE C40-8||24, ex-CSX (7489 is an ex-Conrail C40‑8)|
|7655, 7727, 7797, 7835, 7875, 7898||MEC||GE Dash 8-40CW||6, ex-CSX|
In August 2011, PAR repainted an EMD GP9 locomotive (ST #77) into the maroon and gold "Minuteman" paint scheme used on B&M locomotives in the 1950s. In December 2011, ST GP9 #52 was repainted using MEC's 1950s-era "Pine Tree Route" green and gold livery. Both were sold to the Heber Valley Railroad and departed Pan Am property in September 2018.
B&M #339 in Guilford livery at Wells, Maine, 1999
ST #621 at Westford, Massachusetts, 2007
MEC boxcar in PAR livery at Rigby Yard in South Portland, Maine, 2006
MEC #603 in Portland, Maine, 2010
- "Transload and Warehouse Sites". panamrailways.com. Pan Am Railways. 2018. Retrieved December 1, 2020.
Pan Am's headquarters location at Iron Horse Park in North Billerica, MA.
- "Maine's Biggest Railroad Is For Sale". MPBN.org. July 2020. Retrieved July 1, 2020.
- "CSX to Acquire Pan Am Railways in New England" (Press release). Jacksonville, Florida: CSX Corp. November 30, 2020.
- Luczak, Marybeth (November 30, 2020). "Definitive? CSX Acquiring Pan Am Railways". Railway Age.
- Drury, George H. (1992). The Train-Watcher's Guide to North American Railroads: A Contemporary Reference to the Major railroads of the U.S., Canada and Mexico. Waukesha, Wisconsin: Kalmbach Publishing. pp. 123–125. ISBN 0-89024-131-7.
- "Chief Executive Officer's Message" (PDF). The Pan Am Clipper. June 16, 2006. p. 2. Archived from the original (PDF) on June 16, 2006.
- "Terminal Railway Map". Archived from the original on July 2, 2008. Retrieved May 28, 2008.
- "Welcome to the Downeast Scenic Railroad". Downeastscenicrail.org. Retrieved 2016-02-29.
- "Sunrise Trail Coalition Home". Sunrisetrail.org. Retrieved 2016-02-29.
- "CP to acquire Central Maine & Quebec Railway from FTAI". www.cpr.ca.
- Belden, Tom (May 6, 1990). "An Investor Believes He's On Track; Banking Heir Timothy D. Mellon Has Poured Millions Into Regional Railroads; He's Also Stirred Controversy". The Philadelphia Inquirer. Retrieved December 30, 2012.
- "Highlights from Formation of TNE to the Downeaster Inaugural". Trainriders Northeast. Retrieved November 9, 2012.
- "Firm Conditions Conrail Bid on Approval This Year." Los Angeles Times, June 6, 1985.
- The New York Times, November 25, 1987
- "2008 Maine Infrastructure Report Card - Maine Section of the American Society of Civil Engineers". Maineasce.org. 2015-09-15. Archived from the original on 2008-12-03. Retrieved 2016-02-29.
- "MMTA: ECONOMIC FACTS". Archived from the original on May 10, 2009. Retrieved April 27, 2009.
- Mountain Division Rail Study; Maine Department of Transportation, December 2007
- Atlantic Northeast Rails and Ports, 08#02A
- "Error". Archived from the original on March 6, 2016. Retrieved April 27, 2009.
- Arata, Mary E. (12 October 2011). "Ayer may weigh injunctive relief against Pan Am". Nashoba Publishing. Retrieved 13 October 2011.
- Billings, Randy (19 May 2011). "On the right track? Rail officials, South Portland residents hope to forge solution to idling trains". The Forecaster. Archived from the original on 28 May 2011. Retrieved 21 May 2011.
- "Pan Am Railways and Norfolk Southern Create the Patriot Corridor to Improve Rail Service and Expand Capacity in New York and New England" (Press release). Norfolk Southern Corp. 2008-05-15. Retrieved 2008-05-15.
- Norfolk Southern Railway and Pan Am Railways (2008-05-16). "Introducing the Patriot Corridor" (PDF). Norfolk Southern Corp. Retrieved 2008-05-16.
- "2 railroad freight companies combine effort". AP Business News. Worcester Telegram & Gazette. Associated Press. 2008-05-15. Retrieved 2008-05-16.
- "STB approves Pan Am Southern transaction". 11 March 2009.
- "Pan Am's second takeoff". Trains Magazine. Kalmbach Publishing. January 2010.
- "Olver, Kerry, Brown, Neal: Massachusetts Awarded $2 Million to Initiate Improvements Needed to Expand Freight Rail Service Into New England". Archived from the original on September 15, 2012. Retrieved May 21, 2012.
- Ashline, Shelby (July 6, 2017). "Buckland Board of Health: What can we do about dumped railroad ties?". The Recorder.
- Stephens, Bill (November 30, 2020). "CSX to acquire New England regional Pan Am Railways (updated)". Trains Magazine. Retrieved 2021-03-28.
- "Federal regulators put higher hurdle in front of CSX-Pan Am deal (updated)". Trains. Retrieved 2021-08-01.
- "Rail News - CSX files amended application for proposed Pan Am acquisition. For Railroad Career Professionals". Progressive Railroading. Retrieved 2021-08-01.
- "The Board Rejects as Incomplete the "Significant" Application Filed by CSXT & Pan Am in Control and Merger Proceeding". www.atlp.org. Retrieved 2021-08-01.
- "Federal regulators reject CSX-Pan Am merger application as incomplete (updated)". Trains. Retrieved 2021-08-01.
- "STB accepts updated CSX-Pan Am merger application". Progressive Railroading. Retrieved 2021-08-11.
- "SURFACE TRANSPORTATION BOARD DECISION - Docket No. FD 36472" (PDF). Progressive Railroading. Retrieved 2021-08-11.
- Sprague, Bob (14 August 2011). "ST 77". Railroad Picture Archives. Archived from the original on 30 December 2011. Retrieved 10 October 2011.
- Smith, Kevin. "ST 52". Railroad Picture Archives. Archived from the original on 24 May 2012. Retrieved 16 December 2011.
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