Canadian Pacific plans to upgrade CM&Q trackage to handle premium traffic

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NEW YORK — Canadian Pacific will upgrade Central Maine & Quebec trackage so that the route linking Montreal and Atlantic ports can handle premium intermodal and automotive traffic, Chief Marketing Officer John Brooks told the RailTrends 2019 conference on Friday.

CP announced this week that it will acquire the CM&Q from Fortress Transportation and Infrastructure Investors. Fortress invested $55 million to bring the 480-mile railroad, most of which is former CP trackage, up to 25-mph operation.

Assuming regulatory approval of the $130 million deal, CP will boost speeds on the CM&Q trackage in Quebec and Maine. CEO Keith Creel has asked the engineering department to develop a plan to upgrade the route, Brooks says.

“To run a premium product, you’ve got to have the infrastructure,” Brooks says. “To run the right operating railroad, you have to have the nuts and bolts in place. So that would be something we’d look to early on.”

CP sold off its trackage east of Montreal in the mid 1990s, including its line to Saint John, New Brunswick. The route ultimately became the CM&Q from Montreal to Brownville Junction, Maine. From Brownville Junction to Saint John the line is operated by J.D. Irving short lines New Brunswick Southern and Eastern Maine Railways.

Brooks says the railway is excited to put more dots on its map, even if that meant paying way more for the route than what CP sold it for back in 1995.

Rival Canadian National has a major presence in Atlantic Canada, including service to Saint John, as well as Halifax, Nova Scotia. Buying the CM&Q will enable CP to better compete, Brooks says.

“The opportunity to link directly into Searsport [Maine], that port terminal, and then also into Saint John, that port terminal, is valuable,” Brooks says. “It’s a powerful tool that we haven’t had in our toolbox. I think that lends itself to new intermodal products. I think that lends itself to potentially new automotive products.”

The deal offers the potential for both new intermodal service and carload growth.

“Certainly the premium-type service opportunity is something we are keenly interested in,” Brooks says.

CM&Q has a strong base of forest products traffic, Brooks notes, including several shippers that CP does not do business with today.

Acquiring the CM&Q also may permit CP to better compete for potash traffic that CN currently handles to the port of Saint John for export to Brazil.

Fortress purchased the bankrupt Montreal, Maine & Atlantic for $14.5 million in 2014, a year after the disastrous oil train wreck that killed 47 people in Lac-Mégantic, Quebec. The CM&Q handled about 26,000 carloads in 2018.

Brooks spoke at the RailTrends 2019 conference, which is sponsored by trade publication Progressive Railroading and independent analyst Anthony B. Hatch of ABH Consulting.

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