Short line operators say the closure will severely impact their business.

As the clock ticks toward two shutdown dates for rail freight traffic over the Siskiyou Summit, railroad operators and shippers brace for the impact of likely delays and higher costs.

Last month, Central Oregon & Pacific Railroad (known as CORP) said it was losing money on its Siskiyou Pass operation. Starting Jan. 15, it will reroute California-bound traffic — originating from Ashland or anywhere north of there — through Eugene, where it will switch to a Union Pacific line going through Klamath Falls.

Shipments that originate or terminate in Weed, Calif., will continue over the pass on a biweekly basis at least until April 15.

CORP, a regional operator with more than 400 miles of track in southwestern Oregon and Northern California, claims little will change for its 80-some customers in Jackson, Josephine and Douglas counties.

The same can't be said, however, for two short line operators — WCTU Railway Company in White City and the Yreka Western Railroad Company in Siskiyou County — who connect CORP with many of its local customers.

While shippers anticipate delays and higher costs because of CORP's circuitous routing, the short lines are wondering about their own viability.

"Right now, what comes over the hill makes up about 25 percent of our business," says Norm St. Arnold, manager of the WCTU Railway Co. "If you go back 10 or 15 years, it wasn't that big of a thing, but now it makes things look scary and rocky. It will impact me quite a bit."

The White City company provides a freight switching service on 14 miles of track connected with CORP lines at 11th Street in White City. CORP hauls WCTU's lumber, plywood, wood products, cement, sand and fertilizer loads to interchanges with Union Pacific in Eugene or Black Butte near Weed, Calif.

The White City Terminal & Utility Co. began in November 1954. Its present name was adopted after Union Tank Car Co. acquired control in 1974. The company is now part of RailServe Inc., based in Atlanta.

The short line has a dozen customers at present.

"We used to have 10 times as much business before," St. Arnold says. "Burrill, Royal Oak and Georgia Pacific — they are all gone now."

Other shippers have cut back because of the housing market decline.

"Two years ago we were busier, then it started cutting back and 2007 was a little slower," St. Arnold says. "The way we're looking at it right now is that it doesn't look like it's recovering until the middle of this year. We used to handle between 250 to 300 cars a month — now it's down to around 100."

At the same time, the WCTU staff has fallen from eight employees seven years ago to four, including St. Arnold.

"Some were retired and some laid off," St. Arnold says. "If you have conductor or engineer experience, it's fairly easy to find a job, but maintenance-of-way jobs are a little harder to find. We're in a hold situation right now waiting to see what's going to happen with the mountain. Right now, I'm in favor of anything that keeps tonnage coming over the hill."

The Coos-Siskiyou Shippers Coalition, formed in November when CORP ceased operations along its 120-mile Coos line and strongly hinted what was in store for the Siskiyou line, is fighting the closure.

"There is some consternation about it," says Boise Cascade spokesman Bob Smith. "If you ship north and back south through Klamath it does add to shipping time."

Historically, the Siskiyou line was part of the Southern Pacific Railroad route linking the Northwest and California, but the steep tracks require more locomotives and slower travel on the 55-mile route through the mountains to Montague, Calif. Union Pacific, which still owns the tracks, bypassed the route in favor of the Klamath Falls/Oakridge/Eugene route in the mid-1990s. RailAmerica and CORP entered the picture at that point.

Local shippers got an inkling of what the Siskiyou closure might mean several years ago, when a fire closed Tunnel 13 near Mount Ashland. The line was closed from November 2003 to April 2005.

The closure forced freight headed for Jackson, Josephine and Douglas counties to be shipped through Klamath Falls and Eugene and back down CORP's inland valley line. It also forced Medford-based Timber Products to truck veneer from its Yreka, Calif., operation to mills in the Rogue Valley. Once panels were ready to ship there were long delays.

"I've been told it took five to six weeks to get railcars to Southern California from Southern Oregon," says Timber Products business analyst Erik Vos. "That was not acceptable because we were eating a lot of the cost."

While White City's short line depends on Timber Products for a large share of its business, Yreka Western Railroad Co.'s line would essentially be idled without TP's veneer traffic. Yreka Western operates a 12-mile short line between Yreka and Montague, where it connects with CORP.

"CORP's decision severely impacts our ability to haul freight," says Court Hammond, president and chief executive officer of the Yreka Western Railroad Co., perhaps best known for its Blue Goose steamer excursions.

Yreka Western and a short line based in Montana have both expressed interest in operating over the Siskiyou Pass if CORP halts its runs.

"From a mechanical, equipment and management standpoint, it's a very doable thing," Hammond says. "From what we've been told, three or four locomotives can haul 25 cars a whack."

Hammond has been in the rail business for 25 years and operated freight lines in Colorado before purchasing the Yreka line in January 2000. He differs from CORP's stance that operating over the summit is a losing proposition.

"At an initial glance, it could make a profit," Hammond says. "We're positioned and prepared to go and at this point we still have a shipper we service. Shutting the line down will damage the Yreka Western, but there are other jobs dependent on this, too, not just railroad jobs. Everybody will examine the effects of the reduced service levels and take action accordingly."

That could mean petitioning the Surface Transportation Board in Washington, D.C., says Bob Ragon, executive director of the Douglas Timber Operators and spokesman for the Coos-Siskiyou Shippers Coalition.

Ragon says the coalition has hired Roseburg attorney Ron Yockim to aid its attempt to keep the line open. When CORP ceases running the Siskiyou route, Ragon expects a petition will be filed with the Surface Transportation Board, indicating the shippers have been harmed because the railroad company hasn't carried out its obligation. Depending on how CORP responds, he says, it could open the door to another company operating that part of the line.

"We bit the bullet when the tunnel was down," says CORP Marketing and Sales Manager Tom Hawksworth. "We took some big hits on the rates and gave up most of our revenue to UP to compensate for the extra haulage."

He says CORP has made changes more to the liking of Union Pacific, which sets rates when railcars go beyond his company's reach. The regional line now groups cars in blocks to save UP the effort to shift them around in its yards.

"Because we've eliminated the handling, UP has indicated it will review some of the past opportunities that it has either turned down or offered non-competitive rates," Hawksworth says.

With railcars rerouted through Lane County, the volume of rail traffic rolling through Roseburg should rise by about 30 percent above the 100 cars rolling through Douglas County at present.

"We're still moving 25 to 30 cars a day north and south," Hawksworth says. "And we're still talking to the customers."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.