A Maine railway has plans to shut down a large swath of track in the state in a move industrial firms in New Brunswick are decrying as a loss of a key transportation service.
Both Fraser Papers Inc. and J.D. Irving Ltd. are among the larger customers of the Montreal, Maine and Atlantic Railway, which says it is losing millions of dollars on its service between the Maine communities of Madawaska and Millinocket.
The railway is proposing to sell or abandon the 387-kilometre stretch of track.
Fraser Papers CEO Peter Gordon said the route loss would mean significant added costs for the company, which is undergoing restructuring.
"Obviously, it's a concern for us as a vast majority of our paper is shipped by rail down on that line into the northeast," Gordon said.
Since the railway is the only one to run north and south through Maine, Fraser Papers would likely have to ship most of its products by CN Rail, which heads west to Montreal before sending products south to key markets.
"We obviously have alternatives but the alternatives can be more expensive," Gordon said.
Bob Grindrod, the railway's president and CEO, said the money-losing track is not economical.
"The portion of the railroad we're considering for abandonment, our traffic there is down 35 to 40 per cent as compared to what it was in 2008, which wasn't good to start with," he said.
"In 2007 it was $2 million, in 2008 it was $7.5 million, and thus far this year, it is about $3.5 million in losses."
He said a decline in forestry activity since 2006 — when the U.S. housing market took a crash — is partly to blame for the fewer number of cars travelling the track.
In good times, mills producing oriented strand board filled 25 to 30 rail cars per week on the line. They now only account for about two to three weekly cars, Grindrod said.
The railway has cut its workforce by about 35 per cent and reduced pay for the remaining employees by 15 per cent, he said.
Grindrod is proposing that the state buy and maintain the track while the railway or another private carrier would operate the trains on contract.
"Essentially it's an economic development project and everyone acknowledges that the economy of the area will be adversely affected if the railroad goes away," he said.
The Maine Department of Transportation has applied for US$23 million in funding from a US$1.5-billion program under Washington's Recovery Act meant to stimulate the economy.
"That would be to purchase the line and upgrade it and put it in a good state of repair," said Rob Elder, director of the department's office of freight and business services.
The Northern Maine Development Council is trying to drum up more business for the railway, which has cut back on frequency of service in recent years to save cash.
Mary Keith, spokeswoman for J.D. Irving Ltd., said her company is concerned about the track abandonment plans as a supplier of wood fibre to mills south of Maine's Aroostook County.
"On an annualized basis, we would move the equivalent of 10,000 truckloads" on the railway, she said in a statement.
"The economics of deploying trucks to move this freight over more cost-efficient rail is a concern, as are the added (carbon dioxide) emissions associated with trucking."
The Montreal, Maine and Atlantic Railway began operating in 2003 and owns about 1,200 kilometres of track in Maine, Vermont, Quebec and New Brunswick.
(New Brunswick Telegraph-Journal)