Central Maine & Quebec Railway

Central Maine & Quebec Railway, commonly identified by the reporting mark CMQ, was a privately owned Class II freight railroad that operated a cross-border network in the northeastern United States and southeastern Canada. Its principal system connected communities and industrial customers in Maine and Quebec, with an additional route reaching Newport, Vermont. The company was headquartered in Bangor, Maine, while its U.S. corporate entity maintained offices in New York and its Canadian entity maintained offices in Sherbrooke, Quebec. CMQ was created during the restructuring of the Montreal, Maine and Atlantic Railway after that railroad entered bankruptcy protection in August 2013. The Montreal, Maine and Atlantic had been heavily affected by the Lac-Mégantic rail disaster, in which a runaway crude-oil train derailed in Lac-Mégantic, Quebec, on July 6, 2013. The disaster killed 47 people and caused extensive destruction in the town center. The resulting bankruptcy proceedings in the United States and Canada enabled the sale of the railroad’s operating assets. In December 2013, Railroad Acquisition Holdings, an affiliate of Fortress Investment Group, submitted a stalking-horse bid for the operating rail lines. The bankruptcy trustee accepted the bid in January 2014, and Fortress announced the formation of Central Maine & Quebec Railway as the new operating company in February. The transaction was completed in March 2014, although CMQ received its Canadian certificate of fitness from the Canadian Transportation Agency on June 24, 2014. The company’s U.S. and Canadian entities were registered in February 2014. At the beginning of its operation, CMQ inherited a rail system that required substantial rehabilitation. John E. Giles of Railroad Acquisition Holdings inspected the full route in March 2014 and estimated that between $10 million and $20 million would be required over three years to repair track and related infrastructure. The condition of the network was also a limiting factor in the company’s ability to handle crude oil and other dangerous goods. CMQ acquired ten GMD SD40-2F locomotives from Canadian Pacific Railway in 2014 and used them as part of its freight operation. The company’s core network covered approximately 481 route miles, including lines in Maine, Quebec, and Vermont. Its principal routes included the Searsport, Millinocket, Brownville, Moosehead, Sherbrooke, Adirondack, Newport, Stanbridge, and St-Guillaume subdivisions. The network served forest-products, manufacturing, energy, agricultural, bulk-material, and other industrial customers, and connected with larger railroads including Canadian National, Canadian Pacific, CSX Transportation, and regional railways in Maine, Vermont, and Quebec. CMQ also expanded beyond its inherited core system. In 2015, the Maine Department of Transportation selected the company to operate the state-owned Rockland Branch between Brunswick and Rockland. CMQ began operating the line on January 1, 2016, replacing Maine Eastern Railroad. The change ended the passenger excursion service that Maine Eastern had operated, because CMQ’s proposal focused on freight operations. In 2017, CMQ began operating the former Norfolk Southern Hannibal Subdivision in Ohio for Fortress-related industrial interests, although that operation was separate from the main Maine-Quebec network. CMQ considered restarting crude-oil transportation in January 2016, but the plan did not proceed, in part because of petroleum-market conditions. The company continued to operate freight services until Canadian Pacific announced an agreement to acquire it on November 20, 2019. Canadian Pacific described the transaction as a way to regain former Canadian Pacific routes, establish a more integrated coast-to-coast Canadian network, and strengthen its presence in New England. The acquisition closed on June 4, 2020, ending CMQ as an independent railway brand. Some operations associated with Fortress interests, i…

Central Maine & Quebec Railway emerged from the bankruptcy restructuring of Montreal, Maine and Atlantic Railway. That predecessor had itself developed from assets associated with Iron Road Railways, but its later history was dominated by the July 2013 Lac-Mégantic rail disaster. A runaway crude-oil train derailed in Lac-Mégantic, Quebec, killing 47 people and destroying much of the downtown area. Montreal, Maine and Atlantic subsequently sought protection under Chapter 11 in the United States and under Canada’s Companies’ Creditors Arrangement Act on August 7, 2013. The proceedings created a framework for selling the operating railway and related assets. Railroad Acquisition Holdings, LLC, an affiliate of Fortress Investment Group, submitted a stalking-horse bid in December 2013. The bankruptcy trustee accepted the bid in January 2014. Fortress then established Central Maine & Quebec Railway as the new operating entity. The U.S. company was named Central Maine and Québec Railway US Incorporated and maintained offices in New York, while the Canadian company was named Central Maine and Québec Railway Canada Incorporated and maintained offices in Sherbrooke. Both entities were registered on February 14, 2014. The transaction closed in March, and the Canadian Transportation Agency issued CMQ a certificate of fitness on June 24, 2014. The new operator inherited a large but distressed regional network. During a March 2014 inspection, John E. Giles of Railroad Acquisition Holdings traveled across the line and assessed its track, facilities, and industrial connections. He estimated that $10 million to $20 million in investment would be needed over three years to restore the railway. The condition of the line affected the company’s ability to move crude oil and other dangerous commodities. CMQ acquired ten GMD SD40-2F locomotives from Canadian Pacific Railway in 2014 as it built its operating fleet. CMQ’s principal system extended from Maine through Quebec, with a smaller Vermont component. In Maine, its routes included the Searsport, Millinocket, East Millinocket, Madawaska, K.I., and portions of the Moosehead subdivisions. In Quebec, the network included the Sherbrooke, Adirondack, Stanbridge, and St-Guillaume subdivisions. The Newport Subdivision reached Vermont. In total, the company reported approximately 481 route miles: about 221 miles in Maine, 237 miles in Quebec, and 23 miles in Vermont. Interchange relationships connected CMQ with Canadian National, Canadian Pacific, CSX Transportation, Eastern Maine Railway, Maine Northern Railway, St. Lawrence and Atlantic Railroad, and Washington County Railroad. The railway’s business centered on freight movements for industrial customers and on interchange traffic. CMQ considered restoring crude-oil service in January 2016, but the proposal did not proceed because market conditions made the business unattractive. The company also broadened its operating portfolio. In September 2015, the Maine Department of Transportation chose CMQ to operate the state-owned Rockland Branch between Brunswick and Rockland. CMQ took over on January 1, 2016, replacing Maine Eastern Railroad. Its proposal did not continue Maine Eastern’s passenger excursions, so the branch became focused on freight service. In 2017, CMQ began operating the former Norfolk Southern Hannibal Subdivision in Ohio. The line served industrial facilities associated with Fortress, including the former Long Ridge Energy Generation Facility in Clarington. Locomotives assigned to the work included CIT-owned SD40-2 units, and operating crews were sent from Maine on rotating assignments. This Ohio operation was geographically separate from CMQ’s principal Maine-Quebec system. On November 20, 2019, Canadian Pacific announced that it would acquire CMQ. Canadian Pacific chief executive Keith Creel said the acquisition would provide a more complete coast-to-coast Canadian network and increase the company’s presence in New England. The purchase also allowed Canadian Pacific to regain several routes that had previously been part of its system before being sold to predecessor railroads and later consolidated under CMQ. Canadian Pacific completed the acquisition on June 4, 2020, after which CMQ ceased to operate as an independent railroad brand. The Rockland Branch remained a separate operational issue after the acquisition. In late August 2021, Finger Lakes Railway was announced as the incoming operator, and the Surface Transportation Board approved the transfer. Dragon Cement, the branch’s largest shipper, subsequently stated that it would stop shipping cement from its Rockland facility by the end of 2021. Because cement movements formed most of the branch’s revenue, the decision threatened the economic basis of the rail shuttle service. The former CMQ network and assets therefore continued under new ownership or operating arrangements, but Central Maine & Quebec Railway itself remained a historical, defunct brand after the Canadian Pacific transaction.

1. 2021Rockland Branch operator changes

   Finger Lakes Railway was selected to take over the Rockland Branch, subject to Surface Transportation Board approval.

   Source
2. 2020Canadian Pacific completes acquisition

   The acquisition closed on June 4, ending CMQ’s independent existence.

   Source
3. 2019Canadian Pacific announces CMQ acquisition

   Canadian Pacific announced its agreement to purchase CMQ and reintegrate portions of the network.

   Source
4. 2017Ohio industrial operation added

   CMQ took over operation of the former Norfolk Southern Hannibal Subdivision in Ohio.

   Source
5. 2016Rockland Branch operations begin

   CMQ replaced Maine Eastern as freight operator on January 1.

   Source
6. 2015Rockland Branch operating contract awarded

   Maine DOT selected CMQ to operate the state-owned Rockland Branch.

   Source
7. 2014Central Maine & Quebec Railway is formed

   Railroad Acquisition Holdings, backed by Fortress Investment Group, formed CMQ to operate the purchased rail lines.

   Source
8. 2014Canadian certificate of fitness issued

   The Canadian Transportation Agency issued CMQ a certificate of fitness on June 24.

   Source
9. 2013Montreal, Maine and Atlantic enters bankruptcy protection

   Following the Lac-Mégantic rail disaster, Montreal, Maine and Atlantic filed for protection in the United States and Canada, initiating the asset-sale process that led to CMQ.

   Source

A privately owned regional and short-line freight railroad focused on maintaining and operating a cross-border industrial rail network in northern New England and Quebec.

• Cross-border freight rail serviceRail freight transportation2014

  CMQ’s principal offering was regional freight transportation across a network linking Maine, Quebec, and Vermont. The railway hauled traffic for industrial customers and connected with major and regional carriers at interchange points including Saint-Jean-sur-Richelieu, Sainte-Rosalie, Lennoxville, Northern Maine Junction, Brownville Junction, Millinocket, Brunswick, and Newport.

• Rockland Branch freight operationShort-line railroad operation2016

  Under a Maine Department of Transportation contract, CMQ operated the state-owned line between Brunswick and Rockland from January 2016. The operation emphasized freight, including a cement shuttle associated with Dragon Cement, and did not continue the passenger excursion program previously offered by Maine Eastern Railroad.

• Hannibal Subdivision operationIndustrial rail operation2017

  Beginning in 2017, CMQ operated the former Norfolk Southern Hannibal Subdivision in Ohio for Fortress-related industrial customers. The assignment was separate from the company’s principal Maine and Quebec network and used locomotives and crews assigned specifically to the operation.

• 2019Agreement to sell CMQ to Canadian PacificM&A

  Canadian Pacific sought to strengthen its New England presence and recover routes formerly associated with its network.

  What changed. Canadian Pacific announced an agreement to purchase CMQ on November 20.

  Aftermath. The transaction closed on June 4, 2020, and CMQ ceased to operate as an independent company.

  Source
• 2016Launch of Rockland Branch freight operationStrategy

  Maine DOT sought an operator for its state-owned Rockland Branch between Brunswick and Rockland.

  What changed. CMQ replaced Maine Eastern Railroad as operator on January 1, focusing the line on freight rather than continuing passenger excursions.

  Aftermath. The branch was later transferred to Finger Lakes Railway, while the loss of Dragon Cement traffic weakened the line’s principal freight business.

  Source
• 2016Crude-oil service plan abandonedOther

  CMQ considered resuming crude-oil transportation after acquiring the former Montreal, Maine and Atlantic network.

  What changed. The planned January 2016 crude-oil service was not launched because petroleum-market conditions did not support the proposal.

  Aftermath. CMQ remained focused on conventional regional freight and industrial traffic.

  Source
• 2014Rebuild and operate the acquired cross-border networkStrategy

  CMQ acquired a rail system emerging from bankruptcy and inherited track and infrastructure that required significant rehabilitation.

  What changed. The new operator inspected the full line, estimated a multiyear repair requirement, obtained regulatory authority, and began rebuilding freight operations.

  Aftermath. CMQ operated the network until Canadian Pacific acquired the company in 2020.

  Estimated infrastructure investment. $10 million-$20 million estimated requirement (Three years from 2014)

  Source

• 2013Lac-Mégantic rail disaster involving predecessor railwayControversy

  The July 2013 runaway crude-oil train derailment in Lac-Mégantic occurred under Montreal, Maine and Atlantic Railway, before CMQ was formed. The disaster killed 47 people and contributed directly to the predecessor’s bankruptcy and the later creation of CMQ. CMQ was not the operator at the time of the accident.

  Source

• 2021Finger Lakes Railway selected to replace CMQ on Rockland Branch

  Finger Lakes Railway was announced as the incoming operator of the Rockland Branch after CMQ’s successor arrangements, with the transfer approved by the Surface Transportation Board.

  Other
  Source
• 2020Canadian Pacific completes acquisition of CMQ

  Canadian Pacific finalized its acquisition of CMQ on June 4, ending the company’s independent operation.

  M&A
  Source
• 2019Canadian Pacific announces agreement to acquire CMQ

  Canadian Pacific announced that it would purchase CMQ, citing network integration, the recovery of former CP routes, and stronger access to New England.

  M&A
  Source
• 2017CMQ takes over operation of the former NS Hannibal Subdivision

  CMQ began operating the former Norfolk Southern Hannibal Subdivision in Ohio for industrial interests associated with Fortress.

  Other
  Source
• 2016CMQ begins Rockland Branch operations

  CMQ assumed freight operation of the Rockland Branch between Brunswick and Rockland on January 1, ending the previous operator’s passenger excursion service.

  Other
  Source
• 2016Planned crude-oil service does not proceed

  CMQ had planned to resume crude-oil transportation by rail, but the proposed service was not launched amid unfavorable petroleum-market conditions.

  Other
  Source
• 2015CMQ selected to operate Maine’s Rockland Branch

  The Maine Department of Transportation selected CMQ to replace Maine Eastern as operator of the state-owned Rockland Branch.

  Other
  Source
• 2014Fortress affiliate forms Central Maine & Quebec Railway after bankruptcy-asset bid

  Railroad Acquisition Holdings formed CMQ to operate the rail assets acquired from the bankrupt Montreal, Maine and Atlantic Railway.

  M&A
  Source
• 2014CMQ receives Canadian certificate of fitness

  The Canadian Transportation Agency issued CMQ its certificate of fitness, supporting the company’s operation of its Quebec railway lines.

  Regulation
  Source

1. Central Maine and Québec Railway