Costs adding up as rail shippers forced to switch to trucks

Since the Central Oregon & Pacific Railroad shut down its spur line between Coquille and Eugene, it has cost Roseburg Forest Products between $125,000 and $167,000 a month extra to ship its lumber products from the coast.

The Roseburg-based company — which ships by rail 70 percent of its products produced in the Northwest — has had to rely on trucks since late September to bring those shipments inland so they can be placed on rail cars for further delivery.

“We are really relying on railroads to get our products to market,” Ray Barbee, an RFP vice president, told an audience attending a breakfast forum Thursday at the Roseburg Country Club.

Barbee, who also represents the Coos-Siskiyou Shippers Coalition — which formed after the spur line was closed — applauded efforts by Gov. Ted Kulongoski calling for the railroad to make repairs to three tunnels and get the line reopened.

Last week, the governor reiterated in a letter that the rail line must be reopened before the state would consider providing any money to the railroad for other infrastructure needs. Officials with RailAmerica, the railroad’s Boca Raton, Fla.-based parent, are evaluating the governor’s letter and are formulating a response.

Thursday’s forum, sponsored by the Roseburg Area Chamber of Commerce, examined issues surrounding the rail line closure.

Martin Callery, an official with the Port of Coos Bay, said the port has been rebuffed in its efforts to obtain a grant from the ConnectOregon program to buy the spur line. The port sought $800,000 to buy the line and another $5.7 million to make repairs to the affected tunnels.

He said high-ranking officials with the Oregon Department of Transportation said they weren’t sure the project fit the model for improvements to transportation infrastructure that the statewide grant program was designed to fill. Even so, officials encouraged the port to submit an application, which made it all the more baffling, he said, when he was informed this week that the application had been disqualified before the proposed projects had come up for review.

“We’ve got great support from the governor, but I don’t see that same level of support from ODOT management,” Callery said. “I hope that could change.”

Karmen Fore, the district director for U.S. Rep. Peter DeFazio, D-Springfield, said continuation of rail service through Southern Oregon is an important issue. Once, when a Union Pacific train trestle in Springfield failed, Central Oregon & Pacific’s tracks provided the only rail passage into California, she said.

She said DeFazio wrote a letter to officials from Fortress, a private equity fund that owns RailAmerica, to urge the company to come up with a plan to reopen the line. He hasn’t received a response, she said.

“Clearly, Congressman DeFazio is extremely distressed about this situation,” Fore said.

Truck traffic on Highway 42 between the coast and Winston has increased greatly since the 120-mile spur line closed down. Besides Roseburg Forest Products, a number of other manufacturers, including American Bridge, Georgia Pacific and Southport Forest Products, relied on the railroad for shipping services.

Rail customers are also concerned whether CORP might close its line over the Siskiyou Mountains down to Weed, Calif. That would require the use of even more trucks and heighten costs, Barbee said.

Roseburg City Manager Eric Swanson questioned why the state held up the bulk of the $7.7 million grant awarded to the railroad to build a new rail yard next to Interstate 5 north of Winchester. After releasing about $1 million, the state held up further payments in light of the spur line closure.

“How does that move things forward?” asked Swanson, who said the project would benefit the city and rail customers, as well as the railroad.

Currently, the railroad can store only about 190 cars at its yard near downtown Roseburg. The new facility, which has been partially build, could handle up to 350 cars.

“It’s a way to leverage and be in a stronger position during negotiations,” said Mike Baker, an ODOT manager.

Central Oregon & Pacific was invited to provide a speaker for the program but declined. Patrick Kerr, the railroad’s assistant general manager, sat in the audience and answered questions from reporters afterward.

He said the company is committed to finding a solution that benefits shippers and the company.

“We’ve been here a long time and we have the best interests of the community at heart,” Kerr said.



• You can reach reporter John Sowell at 957-4209 or by e-mail at jsowell@newsreview.info.