Resolution on rail line may come after nearly 2-year fight

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August 04, 2009

By Greg Stiles

Mail Tribune

MEDFORD — There finally may be light at the end of the tunnel for the Coos-Siskiyou Shippers Coalition.

A spokesman for the coalition said Monday the group is hopeful the Obama administration's Surface Transportation Board chairman nominee Daniel R. Elliott III will bring resolution to its ongoing tiff with Central Oregon & Pacific Railroad.

It's been nearly a year since the shippers coalition filed an emergency Petition for Alternative Rail Service with the Surface Transportation Board to allow West Texas & Lubbock Railway and Yreka Western to operate the Siskiyou Summit line.

The shippers have been at odds with CORP for nearly two years since the Rail America unit shut down the line connecting Coos Bay with Eugene and curtailed runs over the Siskiyou Summit between Weed, Calif., and Ashland. CORP hasn't run trains over an 85-mile stretch crossing the Siskiyou Summit since May 6, 2008, forcing Timber Products Co. and Roseburg Forest Products to rely on trucks between Northern California and their Southern Oregon plants.

The Surface Transportation Board approves rail mergers and decides rate disputes between shippers and railroads. Elliott told a House panel last week he would be "proactive" in addressing shippers' allegations of pricing abuses by freight-rail companies.

That was welcome news, said Coos-Siskiyou Shippers Coalition spokesman Bob Ragon.

"This is more than we've heard from the STB in a year," Ragon said Monday.

The STB has heard from both sides, but apparently delayed action until a new chairman for the three-person panel stepped in. The coalition said it presented the matter as a service issue, but CORP argued it was a matter of price.

Congress now is considering a bill that would overhaul the relationship and give the government broader regulatory powers.

"The 300 percent rate increases on the Siskiyou Summit that CORP threw at us in May of '08 would have prompted a long and costly legal battle to overturn," Ragon said. "Our issue was lack of service, but they turned it into a rate issue. The present system to challenge exorbitant rate increases provides no meaningful relief in a timely, cost-effective manner. Having better oversight by the STB can only be a major improvement."

Although the faltering economy slowed down construction and the need for raw materials, Springfield-based Timber Products now relies on trucks to ship veneer from its Northern California plants to Southern Oregon.

"Local shippers feel that they will be better off with additional federal control of rail rate levels," wrote Tom McFarland, an attorney for the coalition, in an e-mail. "Local shippers have experienced exorbitant rail rate increases as rate contracts have expired with little or no hope of meaningful federal oversight."

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

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