Talks stall between railroad, shippers over Siskiyou line

Negotiations between rail shippers and Central Oregon and Pacific Railroad over proposed rate hikes on the Siskiyou line between Northern California and Southern Oregon have broken down.

Representatives from Roseburg Forest Products and Timber Products Company, both members of the Coos-Siskiyou Shippers Coalition, announced today that they've informed CORP the railroad's proposed rate hikes for hauling veneer and logs is "cost prohibitive."

"The gap between the parties was too great to begin with, and subsequent counter-offers resulted in no meaningful progress," said Roseburg Forest Products Vice President of Sales and Marketing Ray Barbee, in a news release.

Negotiations over the rates were initiated by CORP on April 3, but the parties have been unable to come to a workable agreement.

"CORP's request for a long-term commitment of a 150 percent rate increase driven by CORP's desire for a substantially higher operating profit that includes their demand that the shippers fully fund all, and even substantially more than, the nearly $5 million of deferred maintenance was simply unacceptable and untenable to us," said Timber Products Company spokesman Erik Vos in the news release.

Comments from CORP or its parent company RailAmerica were not immediately available.

Roseburg Forest Products hauls veneer and logs from its facility in Weed, Calif., to plywood plants in Riddle and Dillard. Timber Products Company hauls veneer from Yreka, Calif., to plants in White City, Medford and Grants Pass.

The breakdown in negotiations over the Siskiyou line follows a recent ruling from the federal Surface Transportation Board over another rail line between Coquille and Eugene. The federal board demanded RailAmerica show cause why its failure to reopen the line between Coquille and Eugene should not be considered an unlawful abandonment.

The railroad closed that line last September after inspections of the tunnels on the line revealed several of them were unsafe.

Railroad officials have since pressed for help from the state and shippers affected by the closure to pay for repairs estimated at $20.4 million. The railroad itself has indicated it would be willing to pay $2.9 million to repair the tunnels.

Gov. Ted Kulongoski declined to help until the railroad has repaired the tunnels and reopened the line. Shippers have indicated they are willing to negotiate, though they've said so far the terms offered by the railroad have not been favorable.