CSX has formally notified the U.S. Surface Transportation Board of its plans to acquire Pan Am Railways.
The merger application said the transaction will improve service, capture business from trucks, and boost railroad competition in New England.
The deal had been announced on Nov. 30. Pan Am operates 1,700 miles of track and haulagae rights from Albany, New York, to Maine.
In what some industry observers see as a concession to Norfolk Southern, which had expressed initial opposition to the news of the pending acquisition, CSX will have a Genesee & Wyoming subsidiary operate the Pan Am Southern, a joint venture of Pan Am and NS.
G&W’s Pittsburg & Shawmut subsidiary operating as Berkshire & Eastern, will operate Pan Am Southern of which NS is a 50 percent owner.
CSX will own half of Pan Am Southern while NS will retain its ownership share.
NS had sought a neutral party to operate the Pan Am Southern.
The Atlanta-based Class 1 also will gain trackage rights over CSX, Providence & Worcester, and Pan Am between Albany and Ayer, Massachusetts, for intermodal and automotive traffic.
That will provide a faster route for NS intermodal trains 22K and 23K as well as a route that avoids the clearance restrictions in 4.75-mile Hoosac Tunnel in western Massachusetts.
Using CSX track on the former Water Level Route and the Boston & Albany via Worcester, Massachusetts, is expected to reduce the running time for the 22K and 23K by three hours and eliminate a single-stacking operation at Mechanicville., New York.
In return NS has agreed to help pay for clearance work between Worcester and Aye and will rebuild its former Delaware & Hudson route from Delanson, New York, to Voorheesville, New York.
Two NS manifest freights will continue to operate daily over the Pan Am Southern between Albany and the Pan Am classification yard at East Deerfield, Massachusetts.
The Pan Am Southern, which has 425 miles of rail lines and trackage rights routes, is now operated by Pan Am’s Springfield Terminal subsidiary.
G&W already connects with Pan Am Southern through its New England Central, Providence & Worcester, and Connecticut Southern.
The STB filing did not estimate cost savings or revenue gains that CSX expects from acquiring Pan Am.
“While CSXT expects rail traffic on the PAR System to grow over time, CSXT does not expect to make any significant changes in traffic routes or traffic volumes in the next few years,” the filing said.
Having Pan Am will extend CSX’s reach into Vermont, New Hampshire, Maine and Saint John, New Brunswick.
CSX is already the dominant Class 1 freight railroad in New England but said that because it is an end-to-end merger there will be no adverse effects on competition.
The petition said no short line railroads will lose competitive access and the Berkshire & Eastern will independently set rates on Pan Am Southern.