Oregon
In the case of the International Port of Coos Bay in Oregon, the new operator is the port itself. The 133-mile line, running west from Eugene, Ore., to the coast and then south to Coos Bay, had been operated since 2011 as Coos Bay Rail Link by ARG Transportation, a Eugene company that also runs a short line in Arizona.
But the port decided to take operation of the line in-house, setting up a new company, Coos Bay Rail Line Inc., to begin operating Nov. 1. The port says it has spent $4 million on locomotives and other equipment, and hired 15 employees to manage the railroad.
“Owning and operating the Coos Bay Rail Line has many strategic advantages,” the port said in an announcement. “The new outfit will benefit from greater commercial exposure, improved customer service, and can leverage the port’s financial and people resources. Since the rail line is over 100 years old, blending routine maintenance with capital improvement projects will ensure a holistic approach to improving the line’s infrastructure which has been neglected by prior owners and operators.”
But it’s not been a particularly amicable split, to judge from dueling filings with the Surface Transportation Board. The port says ARG told it last December of “its intention to divest their relationship with the port.”
ARG said it was considering divesting its portfolio of rail businesses but Coos Bay Rail Link wanted to continue operating the railroad even with an ownership change. The port says Coos Bay Rail Link “has failed adequately to maintain the line in accordance with [the railroad’s] contractual obligations.”
Coos Bay Rail Link says any track deterioration is the result of insufficient capital investment by the port. The company also notes that under its management, traffic on the line increased from 194 cars in 2011 to more than 7,200 cars.
One item near the top of the port’s to-do list is to fix a swing-span bridge at Coos Bay, that has been out-of-commission since mid-April. The port says repairs could have the bridge operating by the end of this year.
Washington
North and east of Coos Bay in Washington, the state owns multiple short lines collectively known as the Palouse River & Coulee City. The 108-mile line between Cheney, Wash., (near Spokane) and Coulee City, in Eastern Washington wheat country, also has a new operator.
Washington Eastern Railroad officially took over operations Nov. 5 from Eastern Washington Gateway Railroad, a part of Illinois-based U.S. Rail Partners. Washington Eastern is a part of The Western Group, an Ogden, Utah-based consortium of railroads in Oregon, Arizona, Texas, New Mexico, and Kansas under the common ownership of David Durbano.
The Western Group and Washington Eastern were selected from a pool of seven applicants to take over an expiring lease, according to the Washington State Department of Transportation. Eastern Washington Gateway was among them.
Like many of Eastern Washington’s short lines, the Cheney-Coulee City line’s future has been clouded by questions about track conditions and whether there is sufficient freight volume — mainly wheat — to justify spending money to rehabilitate the track. The state says the rail line handled about 5,500 cars in 2017, most of that in grain.
The Western Group says what it’s facing with the Washington Eastern is nothing new.
“With extensive experience in short line freight railroading, as well as railroad construction and maintenance, [Western Group] can influence maximum value for the communities of the region and the state of Washington,” the company said in an announcement of a tentative deal. “[Western Group] has a proven track record of finding innovative solutions to improve cast-off branch lines so that they become sustainable, productive transportation providers for rural communities.”
