<HTML> <HEAD> <TITLE>96 Shortline Rail White Paper, WWC Staff, Wheat Life</TITLE> </HEAD> <body bgcolor="FFFFFF" text="000000" link="0000FF" vlink="FF0000" alink="0000FF"> <basefont face="Arial, Tahoma, Times New Roman" size="3" color="#000033"> <TABLE border="0" width="100%" cellspacing="0"> <TR align="left" valign="top"> <td><small> <A href="https://sgi25.netservers.net/bluefish.org/thefilm.htm">the film</A><br> <A href="forum.htm">forum</A><br> <A href="library.htm">library</A><br> <A href="tutorial.htm">tutorial</A><br> <A href="contact.htm">contact</A> </small></td> <TD> <A href="economic.htm"><img src="images/economic.gif" border="0" width="110" height="110" align="center" alt="Economic and dam related articles"></a> <TD> <CENTER><FONT FACE="Arial, Helvetica" COLOR="0000FF"> <strong><BIG><H2 align="center">Shortline Rail White Paper</H2> </BIG></STRONG></FONT><FONT COLOR="FF0000">by WWC Staff <BR>Wheat Life, March 2006</FONT></CENTER> </TABLE> <HR> <P align="left"> The Washington Wheat Commission (WWC) drafted the following white paper in response to the wheat industry's concerns about the state of railroad infrastructure in Washington. The paper was provided to state legislators, the Washington state departments of Agriculture and Transportation and at the congressional level. The WWC believes there is a direct correlation between the health of the wheat industry and railroad service in the state.

Eastern Washington's shortline rail infrastructure is vital to the local and regional economy of the state and particularly to the wheat industry in moving product to market. The State of Washington should follow through on its established plan to purchase and rehabilitate the Palouse-Coulee City Railroad right of way. According to the state's own analysis, the public benefits of doing so outweigh the costs by nearly 2:1.

State and wheat industry position

Recognizing the importance of rail infrastructure, the State of Washington has established a priority for freight rail with a 10-year strategy for addressing large freight rail assistance projects, including purchase of branch rail lines in eastern Washington.

The Washington wheat industry supports the State of Washington's position set forth in RCW 47.76.210, that for the state's economic future ". . . better freight rail planning, better cooperation to preserve rail lines, and increased financial assistance from the state are necessary to maintain and improve the freight rail system within the state."

The same RCW further states, "Thus, the economy of the state will be best served by a policy of maintaining and encouraging a healthy rail freight system by creating mechanisms that keep rail freight lines operating if the benefits of the service outweigh the cost."

Action: rail line purchase

In fulfilling this objective, the Washington State Department of Transportation (WSDOT) agreed with WATCO, the shortline carrier, to purchase the Palouse-Coulee City Railroad (PCC) right of way (track and underlying land and easements) with initial segments purchased on November 1, 2004 (WATCO had threatened to abandon the lines). State purchase of the right of way was based on a positive benefit/cost ratio; legislative directive and funding for both the purchase ($7.028-million) and rehabilitation ($26.4-million); and strong support throughout eastern Washington with numerous economic and community benefits. With nearly 400 miles at stake, purchase and rehabilitation is far less than the $1-million-per-mile-cost of building a new line.

Immediate concern

WATCO is threatening to abandon the segment of the line (Coulee City to Cheney or CW line) that the state has not yet purchased, citing once again salvage value of the line. The company has also informed the state of their intent to stop service on the P&L line running from Marshall to Pullman. The wheat industry recognizes the importance of the shortline rail system. It also recognizes that shippers, the shortline rail carrier and even the State of Washington can be captive and thus directly affected by policy decisions of the Class I railroads—only two of which exist in Washington. Washington state must ensure that its partnering efforts with the Class I railroads in moving freight from out-of-state shippers through our state is balanced with competitive, timely and efficient service to all Washington rail shippers. Currently, the railroads seem to be stepping away from their common carrier obligations to shippers through insufficient service, car allocation schemes, rate setting, surcharges, and the elimination of service (even on rail lines over land essentially given to them to provide rail service). Deregulation under the Staggers Act of 1980 has benefited the railroads, but has not provided protection for shippers. Thus, at the national level, legislation (S. 919, and H.R. 2047—The Railroad Competition Act) has been introduced to ensure rail-to-rail competition and address the monopolistic actions of the railroads, particularly against the captive shippers that exist across industries.

Benefits the shortlines provide:

Costs of abandoned branch lines include:

Brief background

Formally owned by Class I carriers Burlington Northern Santa Fe Railroad (BNFS) and Union Pacific (UP), the branch lines known as the Palouse-Coulee City Railway (PCC) suffered from years of insufficient maintenance and were designated for abandonment by BNSF and UP. WATCO purchased the lines in the mid-1990s and began operating as the shortline carrier. Operating speeds were 25 mph, but a further lack of maintenance has reduced speeds to 10 mph in most areas. Contending that scrap value was more attractive than operating the lines, WATCO informed Washington in March 2004 of intentions to abandon the lines unless an agreement could be reached with WSDOT to acquire and rehabilitate the lines. The state agreed to purchase the lines, with WATCO retaining operating rights.

WATCO is again looking to abandon portions of the line (having stopped service on the CW line) and directing that rehabilitation funds should all be spent on the Hooper section of the line. Shippers, and ultimately growers, who bear the cost of freight, are disadvantaged by these actions, as is Washington state and its transportation infrastructure.

Conclusion

Shippers in good faith have partnered with the state and WATCO to ensure the shortlines are utilized. The state should continue to pursue a viable shortline rail industry, recognizing that in so doing, the public benefits far outweigh the public costs.

<HR> <strong>WWC Staff</strong><br> <A href="http://www.wheatlifemagazine.com/0306/pg64_0306.pdf"> <I>Shortline Rail White Paper</I></a><BR> <strong>Wheat Life</STRONG>, March 2006 <HR> <P align="center"><CENTER> <BIG><strong>See what you can learn</STRONG></BIG><P> <A href="topic.htm">learn more on topics covered in the film</A><BR> <A href="https://sgi25.netservers.net/bluefish.org/video.htm">see the video</A><BR> <A href="script.htm">read the script</A><BR> <A href="songs.htm">learn the songs</A><BR> <A href="forum.htm">discussion forum</A><BR> <IMG src="salmon_swimming_md_wht.gif" width=150 height=70 alt="salmon animation"> </CENTER> </basefont> </body> </HTML>