Site search
sponsored by
News
Sports
The Central Oregon & Pacific Railroad this week submitted a formal application to abandon 94 miles of track on its Coos Bay line in Coos, Douglas and Lane counties.
The railroad had earlier announced its intention to jettison the line between Coos Bay and Vaughn, west of Eugene, but the submission to the federal Surface Transportation Board will start the process rolling.
In addition, the Roseburg-based railroad sought permission to discontinue service on two other segments of track leased from other railroads. Those segments include a 23-mile stretch between Coos Bay and Coquille that is leased from Union Pacific and a branch line near Gardiner leased from the Longview, Portland & Northern Railway Co.
At the same time, the railway seeks to retain a segment of its line between Eugene west to Noti. That segment contains three mills that ship wood products by rail. Retaining that portion of the line would also allow CORP to charge to ship goods over that segment if the closed Coos Bay line was reopened by another rail carrier.
“CORP seeks to abandon and discontinue service over the Coos Bay Subdivision because the present and prospective revenues from traffic handled via the line cannot support the ongoing cost of maintaining and operating the line,” wrote Scott G. Williams, a senior vice president and general counsel for CORP parent company RailAmerica.
Last week, the Oregon International Port of Coos Bay submitted an application asking to take over the line, including the portion from Noti to Eugene. The port, which asked the STB to order CORP to make $23 million in repairs and infrastructure improvements to reopen the line shuttered since September, would like to contract with a short line company to operate the line.
On Wednesday, the port filed a petition asking the Surface Transportation Board to reconsider its granting of a protective order allowing CORP to confidentially submit documents on its abandonment application. Because of the railroad’s importance to the region, the port argued that financial information and other information submitted to the STB should be publicly available.
In its original application for the order, the railroad said it should be able to submit proprietary information confidentially.
Traffic on the Coos Bay line has dropped 37 percent in the past five years, according to the abandonment filing. The closure of a Weyerhaeuser Corp. paper mill in Coos Bay in 2004 caused the annual loss of 3,000 railcars of traffic on the line.
In 2006, the last full year the Coos Bay line operated, 5,363 railcars of freight were shipped along the line. Although CORP took in $3.5 million in gross operating revenues that year, the company reported losses of $1.3 million on the line.
RailAmerica’s Williams wrote that 97 percent of the goods hauled on the Coos Bay line consist of lumber and other wood products. He said an analysis showed that companies shipping their products by truck or transferring their loads to rail farther inland would incur added expenses of 11 percent.
“This increased expense pales in comparison to the massive losses that CORP would incur to rehabilitate the tunnels and to resume operations on the line,” Williams wrote. “The fact that some shippers may have to pay more for motor transportation than for rail service is not sufficient reason to force CORP to continue to provide rail service at a substantial and continuing loss.”
Shippers on the line have said the extra costs have imposed a significant burden. Roseburg Forest Products alone is paying up to $167,000 more per month to bring its products inland by truck from its Coquille plant.
The line was shut down after a series of tunnels on the line were deemed unsafe. CORP said it would cost $6.7 million to repair the tunnels.
Between 2003 and 2007, CORP reported spending 28 percent of its gross freight revenues on the Coos Bay line for track, bridge and crossing maintenance. In 2006, CORP spent $934,000 on line maintenance, 32 percent of the gross revenues on the line. That year, the average for rail carriers nationwide was 13 percent, Williams wrote.
The railroad had tried to form a partnership between the state, the port, the Oregon Department of Transportation, shippers and other stakeholders, with each group providing a portion of the money needed to make repairs and improve infrastructure. CORP also sought an ongoing subsidy from the state, a plan rejected by Oregon Gov. Ted Kulongoski.
“CORP chose to seek abandonment and discontinuance authority as a last resort, only after its efforts to work with other stakeholders on a solution that would ensure the long-term viability of the Coos Bay Subdivision were unsuccessful,” Williams wrote.
CORP’s application for abandonment, along with its application for the protective order and the port’s petition for reconsideration, are available online at www.nrtoday.com.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.
The railroad had earlier announced its intention to jettison the line between Coos Bay and Vaughn, west of Eugene, but the submission to the federal Surface Transportation Board will start the process rolling.
In addition, the Roseburg-based railroad sought permission to discontinue service on two other segments of track leased from other railroads. Those segments include a 23-mile stretch between Coos Bay and Coquille that is leased from Union Pacific and a branch line near Gardiner leased from the Longview, Portland & Northern Railway Co.
At the same time, the railway seeks to retain a segment of its line between Eugene west to Noti. That segment contains three mills that ship wood products by rail. Retaining that portion of the line would also allow CORP to charge to ship goods over that segment if the closed Coos Bay line was reopened by another rail carrier.
“CORP seeks to abandon and discontinue service over the Coos Bay Subdivision because the present and prospective revenues from traffic handled via the line cannot support the ongoing cost of maintaining and operating the line,” wrote Scott G. Williams, a senior vice president and general counsel for CORP parent company RailAmerica.
Last week, the Oregon International Port of Coos Bay submitted an application asking to take over the line, including the portion from Noti to Eugene. The port, which asked the STB to order CORP to make $23 million in repairs and infrastructure improvements to reopen the line shuttered since September, would like to contract with a short line company to operate the line.
On Wednesday, the port filed a petition asking the Surface Transportation Board to reconsider its granting of a protective order allowing CORP to confidentially submit documents on its abandonment application. Because of the railroad’s importance to the region, the port argued that financial information and other information submitted to the STB should be publicly available.
In its original application for the order, the railroad said it should be able to submit proprietary information confidentially.
Traffic on the Coos Bay line has dropped 37 percent in the past five years, according to the abandonment filing. The closure of a Weyerhaeuser Corp. paper mill in Coos Bay in 2004 caused the annual loss of 3,000 railcars of traffic on the line.
In 2006, the last full year the Coos Bay line operated, 5,363 railcars of freight were shipped along the line. Although CORP took in $3.5 million in gross operating revenues that year, the company reported losses of $1.3 million on the line.
RailAmerica’s Williams wrote that 97 percent of the goods hauled on the Coos Bay line consist of lumber and other wood products. He said an analysis showed that companies shipping their products by truck or transferring their loads to rail farther inland would incur added expenses of 11 percent.
“This increased expense pales in comparison to the massive losses that CORP would incur to rehabilitate the tunnels and to resume operations on the line,” Williams wrote. “The fact that some shippers may have to pay more for motor transportation than for rail service is not sufficient reason to force CORP to continue to provide rail service at a substantial and continuing loss.”
Shippers on the line have said the extra costs have imposed a significant burden. Roseburg Forest Products alone is paying up to $167,000 more per month to bring its products inland by truck from its Coquille plant.
The line was shut down after a series of tunnels on the line were deemed unsafe. CORP said it would cost $6.7 million to repair the tunnels.
Between 2003 and 2007, CORP reported spending 28 percent of its gross freight revenues on the Coos Bay line for track, bridge and crossing maintenance. In 2006, CORP spent $934,000 on line maintenance, 32 percent of the gross revenues on the line. That year, the average for rail carriers nationwide was 13 percent, Williams wrote.
The railroad had tried to form a partnership between the state, the port, the Oregon Department of Transportation, shippers and other stakeholders, with each group providing a portion of the money needed to make repairs and improve infrastructure. CORP also sought an ongoing subsidy from the state, a plan rejected by Oregon Gov. Ted Kulongoski.
“CORP chose to seek abandonment and discontinuance authority as a last resort, only after its efforts to work with other stakeholders on a solution that would ensure the long-term viability of the Coos Bay Subdivision were unsuccessful,” Williams wrote.
CORP’s application for abandonment, along with its application for the protective order and the port’s petition for reconsideration, are available online at www.nrtoday.com.
• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@nrtoday.com.
