Siskiyou Rail Line Update

Burninbob Apr 1, 2009

  1. Burninbob

    Burninbob TrainBoard Member

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    It was right up to the deadline as the Coos-Siskiyou Rail Coalition tries to bolster their request for a different rail operator on the south portion of the Siskiyou Rail Line. The Coalition made their filing late yesterday afternoon in Washington, D.C.
    The Surface Transportation Board gave the shipper’s some added time to provide additional information in support of the original filing made last September to have another operator appointed.
    If the STB gives the Ok to appoint the West Texas & Lubbock Railroad Company, freight movement over the Siskiyou mountain range could begin almost immediately between Weed, California to Dillard.
    The next step in the process is for Central Oregon & Pacific Railroad, the current operator of the local railroad to file a rebuttal to yesterday's filing, that is due to be filed with the STB by April 10th.
    A final decision for or against the proposal is expected before the beginning of this summer.
     
  2. Ironhorseman

    Ironhorseman Staff Member In Memoriam

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    Thanks for the update, Bob. :)
     
  3. traindude109

    traindude109 TrainBoard Member

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    Thanks for update Bob, hopefully it works out in favor of the shippers coalition.
     
  4. Ironhorseman

    Ironhorseman Staff Member In Memoriam

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    Here's the latest from the Siskiyou Daily News - 4/7/09 & 4/8/09

    Shippers colition statement to the STB:

    Siskiyou County, Calif. -
    In order to augment their initial petition to the Surface Transportation Board (STB), shippers on the Siskiyou Rail line have submitted a supplemental statement addressing the various issues the STB decided were inadequately supported in their decision.
    The initial petition, filed by Timber Products Co., Roseburg Forest Products Co., Suburban Propane, Cowley D&L, Inc., Sousa Ag Service and Yreka Western Railroad, was a request for the STB to require Central Oregon Pacific Railroad (CORP) to allow an alternative rail provider to run the rail. The petitioners made the request based on what they claimed was inadequate rail service provided by CORP.
    In their supplemental statement, the petitioners cover “the frequency and severity of the delays Roseburg Forest Products and Timber Products Co. have endured in supplying finished goods to their customers and the consequences, if any, to them of those delays; the extent to which internal difficulties at their Oregon mills contribute to the various problems about which RFP and TPC complain; and the feasibility of addressing these problems through means other than a return to a 5-day-a-week service schedule (ie., building more track at the mills for loading and unloading cargo or storing raw materials at the mills).”
    Featuring verified statements from Ray Barbee, vice president of marketing for Roseburg Forest Products, Susan Hart, office manager for Timber Products’ Yreka facility, Andrew E. Jeffers, traffic manager-rail for Roseburg Forest Products and Court Hammond, president of Yreka Western Railroad Company, the legal argument of the petitioners contests the findings of the STB’s initial decision in March.
    The petitioners begin by stating the laws governing prescription of alternative rail service. “Alternative rail service will be prescribed under 49 U.S.C. 11123(a) if the Board determines that, over an identified period of time, there has been a substantial, measurable deterioration or other demonstrated inadequacy in rail service provided by the incumbent carrier.”
    The petitioners then explain that while the STB has admitted that inadequacies in service must be determined on a case by case basis, the petitioners believe that an earlier decision, rendered in PYCO Industries, Inc. – Alternative Rail Service – South Plains Switching, Ltd. Co., 2006 S.T.B. – showing that a continued lack of adequate boxcars constitutes a deterioration of service – correlates to the situation on the Siskiyou Line.
    The petitioners claim that rail service deteriorated at the time of the company Fortress’ acquisition of CORP’s parent company, ending in a move from a five-day-per-week schedule to two days per week, or a 60-percent service reduction.
    “A 60-percent service reduction is substantial and measurable under any reasonable definition of those terms,” the petitioners state.
    Addressing the board’s decision stating that it appeared to be that the two-day-per-week schedule was adequate for the number of carloads required by both Roseburg and Timber Products, the petitioners cite Jeffers’ verified statement.
    The petitioners state,
    “only 10 days during the period January through May did CORP operate with five locomotives, and even on those days, CORP did not move 37 carloads per train.
    “On four of those 10 days, CORP moved 28, 30, 33 and 31, and left behind 5, 5, 9, and 8 carloads, respectively.”
    The petitioners also state that they believe that if CORP had wished to provide adequate service, the company would have pursued a stronger engine to transport all cars required by the shippers.
    Various other issues are also discussed, including 13 occasions where railcars were left behind, the period of time from January 31 to February 12, 2008 regarding a snowstorm during that period, and the lack of a rate for traffic on the Weed, Calif.-Saginaw, Ore. route.
    The petitioners then quote Barbee’s verified statement that the switch to a two-day-per-week transportation schedule forced Roseburg to abandon “Just in Time” (JIT) delivery standards, which the petitioners state is the hallmark of forest products delivery.
    “If a marketer of forest products is not able to meet JIT protocols, it will no longer be a viable supplier,” the petitioners state.
    Barbee also stated that the rail car leasing agreement became uneconomical when the service schedule changed and bunching occurred at the mills.
    Also contested by the petitioners is CORP’s claim in its rebuttal that the mills suffer from internal difficulties, which contributed to the service inadequacies.
    The petitioners state that the number of cars each mill can handle was understated by CORP, using photographs from Hart to back their claim. The petitioners also refer to the mills’ ability to handle large car capacities during busy shipping periods in the 1970s and 1990s, as well as CORP’s ability to provide service in the previous 15 years.
    The petitioners go on to contest the suggestion that more track be built at the mill facilities, stating that there is ample track space for adequate service and that extending rail would be “physically impossible” due to property boundaries and other factors.
    The final aspect of the argument addresses the contention that alternative rail options exist for the shippers, including transportation over the Siskiyou Line by the line’s owner Union Pacific or transportation between Black Butte, Calif. and Eugene, Ore.
    The petitioners state that Union Pacific is not interested in hauling over the Siskiyou Line and that the other option “is wholly unsatisfactory because of (1) the two additional rail interchanges; (2) the 150-mile circuity; and (3) the non-truck-competitive rate level.”
    In the conclusion, the petitioners state that in CORP’s letter of December 13, 2007 announcing a curtailment of rail service, CORP said, “‘(t)he Siskiyou Subdivision is difficult, expensive terrain for rail operations,’” to which the petitioners reply, “but that had been the case during all of the many years in which the Subdivision was successfully operated.”
    The petitioners also state that CORP’s allegation that the line was operating at a loss should have led CORP to an abandonment process, “so that local interests could acquire the line by an offer of financial assistance to continue needed rail service. Instead CORP commenced a slow-motion abandonment by drastically curtailing rail service and exorbitantly increasing rates.”
    The petitioners then state that they believe the only solution for them is to seek alternative rail service and eventually a feeder line acquisition on the line.
    “The wholly-unsatisfactory alternative is a continued impasse whereby the rail line sits unused because rail service over it is inadequate for the shippers’ needs and rates are at levels designed to keep traffic off the rails,” the petitioners state, “In those circumstances, the public interest strongly supports the remedy of alternative rail service.”
    CORP also filed a supplemental statement on March 31, which will be covered in tomorrow’s edition of the Siskiyou Daily News.

    CORP's rebuttal:

    Siskiyou County, Calif. -
    The Surface Transportation Board (STB), in making its decision on the Siskiyou Rail Line, requested additional information from both Central Oregon and Pacific Railroad (CORP) and the various shippers on the line.
    CORP begins its statement by quoting the March 4 decision by the STB, asking CORP to “clarify why it is opposed to alternative rail service given that petitioners have diverted their traffic to truck transportation and that CORP would be compensated for WTL’s [Western Texas and Lubbock railroad] operation of the Line, as CORP insisted in its proposal to voluntarily lease the Black Butte-Medford portion of the Line to WTL.
    “CORP should also respond to the contentions that it failed to give notice of the scaled-back rate increases or make copies of its tariff available from customary sources. Finally, CORP should clarify the ambiguities noted above regarding petitioner-shippers’ other rail options.”
    CORP argues, as it did in its initial rebuttal, that it believes the issue is over the rates it has set for transport over the line, not over an inadequacy in service as the shippers have maintained.
    CORP then provides a background on the issue – starting with the shippers’ petition for alternative rail service with WTL to attempts at negotiating a contract with CORP for WTL’s use of the line, which failed and resulted in the responsibility for the decision being handed to the STB.
    In its interim decision on March 4, the STB stated, “The record does not establish the existence of a rail transportation emergency having a substantial adverse effect on rail shippers. Although petitioners have experienced a reduction in service frequency and have documented some service inadequacy, they have not established that a substantial, measurable service deterioration exists that would justify an alternative service order.”
    The final decision, however, is dependent on the board’s assessment of the supplemental information it requested.
    CORP first responds to the STB’s question of why it would be opposed to alternative service on the line.
    “CORP opposes the imposition of alternative rail service on the Line because CORP has consistently held itself out to provide common carrier service upon demand at reasonable rates,” CORP states.
    CORP then goes on to state that it agrees with the interim decision of the STB, claiming that “They [petitioners] have not met the criteria for the Board to impose alternative rail service.”
    CORP reiterates its belief that the problem is that the shippers are unwilling to pay the rates it has set, explaining that the rates cover CORP’s costs of operating over the Siskiyou Line.
    “If, as it does here, CORP must choose between continuing to provide service and lose money on each carload because the shippers will not ship unless the current rates are reduced, or lose the traffic to truck and avoid the losses from operating the Line, CORP will accept the diversion of traffic,” CORP states.
    CORP then states that its stance “is consistent with the rail transportation policy which has the policy objectives of ‘allowing rail carriers to earn adequate revenues’” as well as other economic assurances granted to rail operators.
    CORP contends that it would rather pursue a negotiation with WTL and the shippers, as opposed to litigation by the STB, so that it will not be faced with the possibility of having to recover losses it believes may be incurred by the alternative rail service.
    “CORP opposes alternate service because it has done nothing wrong,” CORP states. “CORP must be assured that it will receive appropriate compensation for the use of the Line and that the condition of the line will not deteriorate as a result of alternate service. As explained above, CORP opposes alternate rail service.”
    Responding to the petitioners’ contention that CORP failed to provide notice of its scaled-back rate increases, CORP states that it is not legally required to provide advance notice of rate decreases, and that it posts rates on its Web site.
    CORP also clarifies its claim that there are three rail options for the shippers. It states that the shippers can utilize CORP over the line on the two day per week schedule, can take the longer route over the Cascade line or work with Union Pacific, the Siskiyou Line’s owner.
    In the conclusion, CORP states, “CORP has responded to the questions raised by the Board. CORP respectfully requests the Board to deny the emergency service sought by Petitioners because they have failed to demonstrate that over an identified period of time, there has been a substantial, measurable deterioration or other demonstrated inadequacy in rail service provided by CORP.”
     
  5. Siskiyou

    Siskiyou In Memoriam

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    Thanks for the update, Bill.

    Scott
     
  6. Ironhorseman

    Ironhorseman Staff Member In Memoriam

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    Yer welcome, Scott.

    It's kinda long-winded and is basically a recap of everything we've known about it already. As I understand it, yesterday was the last day for both sides to submit information to the STB. Now we await their decision. Should be withing 30 days. I'm rooting for the shippers. :thumbs_up:
     
  7. JCater

    JCater TrainBoard Member

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    Here is hoping this all works out!
     
  8. Siskiyou

    Siskiyou In Memoriam

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    Time for a related ghost story, Bill. Sitting in the Ashland Historic Railroad Museum last night (Good Friday) listening to Rod Reid's lecture on Ashland's historic railroad district, I suddenly heard a loud multi-chime whistle blast two long toots. Sounded like an old SP Geep or Cadillac. When I got to the window, there was nothing to see except the string of cars in storage. Those I asked said they didn't hear it. Scott's losin' it in the Siskiyous...

    Scott

    Scott
     
  9. JCater

    JCater TrainBoard Member

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    THAT is a cool story!
     
  10. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    :eek: Well, perhaps you were just lucky to be the chosen one who could hear it?

    Boxcab E50
     
  11. traindude109

    traindude109 TrainBoard Member

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    Another Siskiyou Line Update....

    <http://www.nrtoday.com/article/20090414/NEWS/904149934/1063/NEWS&ParentProfile=1055>

    Railroad willing to provide service at fair price

    by John Sowell, The News-Review (Roseburg, OR)
    Tuesday, April 14, 2009

    Central Oregon & Pacific Railroad said it is willing to provide rail service over the Siskiyou Mountains, but only at a fair price.

    The Roseburg railroad, in a filing Friday with the federal Surface Transportation Board, said Roseburg Forest Products and Timber Products Co. of Yreka, Calif., have taken a disagreement over the adequacy of service between Dillard and Black Butte, Calif., and turned it into a rate dispute.

    In March, the three-member board said it needed additional information before ruling on a shippers' request to have a different carrier operate the 218-mile line. CORP's filing was in response to one submitted earlier this month by the shippers.

    CORP said it provided service over the line five or six days a week until the fourth quarter of 2007, when rail traffic from Northern California to Oregon began to dwindle. As a result, the railroad reduced the number of trains it ran over the line, according to the filing by CORP attorney Louis Gitomer.

    Late that year, CORP notified the shippers that in January 2008 it would operate trains twice a week in each direction. However, the railroad said it would also "modify our schedule as appropriate for the traffic," if demand was heavier.

    At the same time, the railroad negotiated new prices with the shippers, but they were unable to reach a solution. Because of the reduced traffic and the high cost of operating trains over Siskiyou Pass, CORP issued a rate increase that took effect May 6, 2008.

    Both companies stopped shipping over the line before that increase went into effect, switching to truck transport.

    In filings earlier this month, RFP and Timber Products Co. said they used a "just-in-time" delivery system in which customers keep their inventory low to reduce costs. It's critical to deliver materials and finished products on time, they said.

    Gitomer noted that neither company mentioned during contract negotiations the need for rail service as part of a just-in-time manufacturing process. It only became an issue during the current dispute, he said.

    "CORP remains amenable to making the line available to another operator for the purpose of moving loaded cars north (from) California to locations on the line in Oregon and empties from the Oregon facilities to the California facilities, so long as CORP receives the appropriate compensation established by the Board in (an earlier case)," Gitomer wrote.
     
  12. JCater

    JCater TrainBoard Member

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    ahhh...the politics of business...ain't it grand?
     
  13. Ironhorseman

    Ironhorseman Staff Member In Memoriam

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  14. BoxcabE50

    BoxcabE50 HOn30 & N Scales Staff Member TrainBoard Supporter

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    Yeah. Some of it makes the person quoted look rather weak. Of course we often do not see the full text, or proper context, when reading from media.

    :tb-wacky:

    Boxcab E50
     
  15. wslco

    wslco TrainBoard Member

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    I just love CORP's attitude. We don't want to operate the line 'cuz we can't make any money with it BUT we won't sell it 'cuz someone else might make money operating the Siskiyou line.
    --Steve from the other Phoenix
    By the way, the Siskiyou line would be a tourist magnet. Run it from Medford to Black Butte.
     
  16. Ironhorseman

    Ironhorseman Staff Member In Memoriam

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    It would make one heck of a dinner train route. But it would have to be an all day - stay overnight trip, then return the next day. I've always wanted to take the Blue Goose from Yreka to Weed and back. That too would be an all day trip. :)

    Every time I drive south on I-5 I fantasize that I'm at the throttle as old #19 breaks the curve to cross the trestle just before going under the freeway, presenting a show of steam and sound as we did so. :thumbs_up: Dang! I sure miss doing that work.
     
  17. JCater

    JCater TrainBoard Member

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    Now a dinner train is something I could sink my teeth into :D
     
  18. traindude109

    traindude109 TrainBoard Member

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    Your not the only one who has that fantasy Bill! ;)

    Tim and I have discussed that many a time driving to Yreka last summer. Would be one heck of a run!
     
  19. SP Cabforward

    SP Cabforward TrainBoard Member

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    Hey Matt, I think we pretty much talk about that for a good hour or so everytime we get together. :p
     
  20. Ironhorseman

    Ironhorseman Staff Member In Memoriam

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    John, the owner of the Yreka Western would love to have the opportunity to run such an operation, but there's many, many obstacles in the way ... the biggest would be, of course, money. Next would be acquiring equipment and lastly but not any less onerous would be getting permission from the CORP, (or whom ever is in charge after all this litigation is done with) and insurance to use the line. The prospect IS a virtual gold mine if it ever comes to fuition.

    Tim and Matt, I know you two guys miss it as much as I do. I'm hoping and praying that things can work out so that all of us can work together again. Bill and I have often discussed it. You two young'uns are talented and I'd love to teach both of you how to hog the 19 some day ... pass the torch so-to speak. :D

    Matt, I hope you did not mind that I merged your last thread with this one. It's easier for members to access it when we keep it all together. So when anyone has any more information to add to the subject, I'd ask them to just add it to this thread. :thumbs_up:
     

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