(The Associated Press circulated the following story by Clarke Canfield on February 22, 2010.)
PORTLAND, Maine – The collapse of the housing market is largely to blame for a railroad company’s plans to abandon miles of track in the far-flung northern third of Maine that have served the region for more than a century carrying potatoes, paper, lumber, and other products.
The Montreal, Maine & Atlantic Railway has filed notice with the federal Surface Transportation Board that it intends to abandon 233 miles of track that stretch from Madawaska to Millinocket. The company says it has been losing $4 million to $5 million a year on the lines.
Freight revenue has plunged as shipments of lumber, plywood, logs, and wood chips have fallen, said Bob Grindrod, the railway’s president and chief executive. Those products are largely used in home construction, and demand has fallen as the housing market has tanked.
“In one sentence, we have too much track and too little revenue,’’ Grindrod said.
The state is trying to see whether it can buy the railroad. If that doesn’t happen, northern Maine could be left without rail service as early as summer.
The railroad dates to 1891, when the Bangor and Aroostook Railroad was incorporated and began laying track. The line served as a connector between the isolated and sparsely populated expanses of northern Maine and points to the south.
Montreal, Maine & Atlantic bought the railroad in 2003 and now owns 774 miles of track that run from Maine to Montreal, with a short side line into Vermont. The company has 225 employees and is based in Hermon, near Bangor.
For decades, potatoes grown in northern Maine were the railroad’s bread-and-butter. These days, the trains for the most part carry construction material and paper products out of the region bound for markets across the United States and beyond. Fertilizer, heating oil, propane, chemicals, and cooking oil for a french fry factory are among the products that are brought into northern Maine aboard the trains.
The railroad has a couple of dozen customers. One is a Louisiana-Pacific Corp. wood-products plant in New Limerick that uses the railroad to ship its products across North America. Without rail, the plant’s delivery costs would go up because it would have to ship products by truck to another point where they could be put on a train for final delivery.
That means the products will be more expensive and less competitive, said plant manager Travis Turner.
“For the last 100 years there’s been no better way to ship large volumes of product long distances than by rail,’’ Turner said. “Trucks can carry smaller loads and are faster and make sense for short trips, but for moving large quantities of product you really need rail.’’
Rail lines have been disappearing slowly across the country for decades. There are now nearly 140,000 miles of track that crisscross the United States carrying more than 35 million cars of freight each year, according to the Association of American Railroads.
But rail supporters say losing a railroad would be particularly hard in northern Maine, where unemployment and poverty rates are high and income levels are low. The region has lost nearly a quarter of its population since 1980.
The loss of a railroad will only make things worse, said Denis Berube of the Northern Maine Development Commission in Caribou.
Berube estimates that up to 750 direct jobs could be lost if the railroad leaves. And when the housing industry turns around, northern Maine companies would not be in a position to cash in if the railroad is not there.
“Without the rail up here, you’re not going to see a rebound up here,’’ he said.