NE PORTS / CHEMICALS 2008 - Should the State of Maine expropriate Pan Am railways?

By: | at 08:00 PM | Channel(s): Intermodal News  Ports & Terminals  

By Chalmers (Chop) Hardenbergh, AJOTFor decades, Maine shippers have suffered with bad service from Pan Am Railways, the biggest line in the state. Ironically, just as the Legislature is entertaining an effort to expropriate Pan Am’s lines because of the bad service, many are saying that service is improving.
Pan Am’s traffic totals about 100,000 carloads a year, and about 65,000 of them are either delivering chemicals and slurries to the Maine mills, or bringing out paper. That traffic is growing, according to Mike Bostwick, Pan Am’s senior vice-president for marketing. He told a New England Railroad Club confab in late March that while other paper mills in northern New England are closing, the coated paper mills in Maine, which Pan Am serves are “going all out, at 110% of capacity, and giving a boost to my company.”
Another steady source, intermodal, is also growing, he said. “Carloads are up, service is much improved, we are running one helluva railroad.”
Pan Am took over the venerable Boston & Maine and Maine Central railroads in the early 1980s. Shipper satisfaction slipped significantly. By 2005, shippers were asking the Maine Legislature to act. It requested a three-year survey of all of Maine’s railroads to create some evidence to take to the federal Surface Transportation Board (STB), the body charged with overseeing rates and service of US railways.
The results of the survey were presented to the Utilities Committee of the Legislature in late February this year; Pan Am did not fare well. While it accounts for 68% of Maine carloads, it generated 86% of the complaint contacts shippers reported making with the railroads.
Maine’s other two railroads did better. The Montreal, Maine & Atlantic (MMA) has 24% of the traffic but only 12% of the complaints. St.Lawrence & Atlantic (SLR) has eight percent of the traffic and only two percent of the complaints.
The results, plus personal experience of some of the committee members, led the Utilities Committee in late January to pass a bill asking Maine DOT, with the assistance of the Attorney General, to look into filing a feeder line application at the federal Surface Transportation Board (STB) in Washington.
Shipper reactionFederal law permits shippers or states to buy a rail line when service gets bad, under the feeder line statute. But Maine could only buy the Pan Am line if the majority of shippers support the move. Will the shippers come forward? Shippers shy away from public comment about Pan Am service, rightly fearing retaliation in the form of even worse service.
One anonymous shipper said he would be “first in line” if Maine actually filed the bill. Support should also come from NewPage, the giant mill in Rumford, Maine. Its use of rail has dropped from around 70% of outbound shipments in the early 2000s to 39% in 2007.
If the anti-Pan Am forces are correct, a state seizure should improve rail service. That would comport with the effort of Democratic Governor John Baldacci, who has gradually focused more on rail. In 2007, he asked the deputy commissioner of the Maine Department of Transportation (MDOT), Greg Nadeau to lead an effort to move freight to rail.
To get some understanding of the service situation, last year Baldacci and Nadeau met separately with each of the three major Maine railroads and their biggest shippers, literally in Baldacci’s kitchen. Nadeau will not provide details of the meetings with ST, SLR, and MMA, except to label the talk as “frank.”
Nadeau co-chairs a committee of representatives from all New England states and the eastern Canadian provinces, preparing a statement on energy, transportation, and the environment for the governors and premiers. They will hold their annual meeting in Bar Harbor, Maine, and September.
But neither Nadeau nor the governor can point to any on-the-ground rail improvement. Indeed, with Maine facing a budget deficit of $200 million, the state may not be abl

American Journal of Transportation