Northern Maine stands to lose rail service by summer

The Associated Press
Posted Feb. 21, 2010, at 10:06 p.m.

PORTLAND, Maine — The collapse of the housing market is largely to blame for a railroad company’s plans to abandon miles of track in the northern third of Maine that have served the region for more than a century carrying potatoes, paper, lumber and countless other products.

The Montreal, Maine & Atlantic Railway has filed notice with the federal Surface Transportation Board that it intends to abandon 233 miles of track that stretch from Madawaska to Millinocket. The company says it has been losing $4 million to $5 million a year on the lines.

Freight revenue has plunged as shipments of lumber, plywood, logs and wood chips have fallen, said railroad President and CEO Bob Grindrod. Those products are used largely in home construction, and demand has fallen as the housing market has tanked.

“In one sentence, we have too much track and too little revenue,” Grindrod said.

The state has been looking to see whether it can buy the railroad. If that doesn’t happen, northern Maine could be left without rail service as early as summer.

The railroad dates to 1891, when the Bangor and Aroostook Railroad was incorporated and began laying track. The line served as a connector between the isolated and sparsely populated expanses of northern Maine and points to the south.

The Montreal, Maine & Atlantic bought the railroad in 2003 and now owns 774 miles of track that run from Maine to Montreal, with a short side line into Vermont. The company has 225 employees and is based in Hermon, near Bangor.

For decades, potatoes grown in northern Maine were the railroad’s bread and butter. These days, the trains for the most part carry lumber, logs and wood chips as well as paper products out of the region bound for markets across the U.S. and beyond. Fertilizer, heating oil, propane, chemicals and cooking oil for a french fry fac-tory are among the products brought into northern Maine aboard the trains.

The railroad has a couple of dozen customers. One is a Louisiana-Pacific Corp. wood products plant in New Limerick that uses the railroad to ship its products across North America. Without rail, the plant’s delivery costs would go up because it would have to ship products by truck to another point where they could be put on a train for final delivery.

That means the products will be more expensive and less competitive, said plant manager Travis Turner.

“For the last 100 years there’s been no better way to ship large volumes of product long distances than by rail,” Turner said. “Trucks can carry smaller loads and are faster and make sense for short trips, but for moving large quantities of product you really need rail.”

Rail lines have been disappearing slowly across the U.S. for decades. Nearly 140,000 miles of track now crisscross the U.S. carrying more than 35 million cars of freight each year, according to the Association of American Railroads.

But rail supporters say losing a railroad would be particularly hard in remote northern Maine, where unemployment and poverty rates are high and income levels are low. The region has lost nearly a quarter of its population since 1980.

The loss of a railroad will only make things worse, said Denis Berube of the Northern Maine Development Commission in Caribou.

Without rail, the sawmills, wood product companies, paper mills, farms and other businesses will become less competitive. At the same time, home heating oil, diesel fuel and propane will become more expensive for residents.

Berube estimates that up to 750 direct jobs could be lost if the railroad leaves. And when the housing industry turns around, northern Maine companies won’t be in a position to cash in if the railroad isn’t there.

“Without the rail up here, you’re not going to see a rebound up here,” he said.

The railroad announced its plans last year to abandon its northern Maine tracks, with the exception of a 25-mile section running from a paper mill in Madawaska to Van Buren, where the track then veers into Canada. Since then, the Maine Department of Transportation and legislators have been looking for ways to keep the trains rolling. The state unsuccessfully applied for $23 million in a federal stimulus grant to buy and upgrade the railway.

Legislators have been discussing whether to use bond money to buy the tracks. The state already owns 80 miles of active railroad tracks. But the state has money woes of its own, and some would question whether it should be taking on a money-losing railroad.

If the state or some other buyer doesn’t step forward, train service could start shutting down in late June. Grindrod doesn’t want that to happen, but says the company has no choice.

“The company doesn’t want to abandon the tracks, but it also can’t continue losing millions of dollars a year on them,” Grindrod said.

AP PHOTO BY MICHAEL C. YORK

Rail cars sit idle on the Montreal, Maine & Atlantic Railway junction in Oakfield on Friday. From this point the line heads west to Houlton and north to Presque Isle, Easton, Caribou, Limestone, Fort Kent and Madawaska.

http://bangordailynews.com/2010/02/21/news/northern-maine-stands-to-lose-rail-service-by-summer/ printed on August 23, 2014