The Rumored End of the MMA?

Does anyone think that with E. Mill laying off 140+ (temporarily), questions about Frasers long term future in Madawaska and the lack of traffic over a 740+ mile regional that we are looking at the end of the MMA? Seemed like back in 2003 everything was lined up, but everything that could go bad has. In some cases, even worse that expected. We know RailWorld knows how to turn around struggling railroads (WC), but I guess it wasn't in the cards for the old B&A. Sad times at NMJ for sure.

I don't think this is the end. It seems like Quebec operations are all right but Maine operations are struggling. Derby is however trying to secure contracts so they are trying to make ends meet. Also the MMA is part of Railworld, a larger entity with other rail properties. I don't think Railworld would let the MMA die. Also the State of Maine is pretty sick of changing railroads on the B&A every 10 years.

Gee, I hope you're right CN. For what I can tell there's not much for online customers from say Megantic to Farham on the Quebec side and I don't see how Derby can support a 740 mile railroad. I for one wish everything was different, including the name. As far as the state of Maine's role in the MMA going under -- what role could they possibly have? Could you explain the 10 year thing, I'm just confused....I know the B&A was bought by Iron Road in the mid 90's, but including MMA I'm only coming up with 2 major ownership changes in what, 118 years?

Looks like MMA got the raw deal with the west of Brownville CP line as it looks like NBSR is doing a lot better business than the MMA right now.

haha well the ten years thing is a bit of a joke, Iron Roads was one switch over, the MMA a second and if they went under it would be a third. We all know the railroad is poor but they have the will to move forward. There is some business left in Maine and they are doing all they can to boost revenue. This includes using Derby to do rebuild contracts. The Brownville to Farnham leg is mostly a bridge line. Megantic had a customer but I don't know how that is anymore. I also don't know how the Railroad is in Newport but they still run down there. A glimmer of hope is the Sears Island project which believe it or not is progressing forward after 40 years of debate.

It would be interesting to know the comparative economics of continuing operations as-is vs negotiating a haulage agreement with PAR/SLR between NMJ-DVL-Lennoxville... and embargoing line segment BJCT-Megantic. (Or further west?) Downside: the route is 70% longer (but incremental cost for PAR/SLR would be minimal); upside: elimination of 120+ miles of remote, mountainous trackage that sees minimal traffic would be provide a HUGE expense reduction (as well as bolster PAR/SLR financial health).

Cowford, this is a great idea provided that PAR that can offer decent service. It would probably involve a larger interchange track at Sherbrooke as well. Does anyone else find it funny that the state of Maine seems to be putting so much money into the Brownville to Jackman portion when it is just a bridge line?

Regarding Searsport, I think the time has passed. Even if the economy recovers and they can steal business from Halifax, etc. it will be at least 3 years to get the infrastructure in place. I don't know how much money the MMA is losing, but from what I've heard there is no way they can afford to continue losing at current pace for 3+ years.

Having said all that, I hope the MMA takes off because once it's gone I'm afraid it will be the end of the B&A/MMA for good.

I don't see this at all as a good idea. The amount of revenue they would have to give to the SLR/GRS for the haul wouldn't be worth the cost of keeping it a straight MMA/CP operation. I don't see it being funny that the State of Maine is trying to support a home grown Railroad at all. I think its a good thing to try to keep a great asset like the MMA around. The States biggest problem is of course the lack of East/West Highway infrastructure. The MMA was screwed over by CDAC when they lost a lot traffic from NBSR to CN. The CN has been doing sub-par service out of New Brunswick and if the MMA could win back some of that traffic then it would be highly beneficial. St. John is actually growing in traffic as I sit here and watch the MABA/BAMA trains on Pan Am get longer and longer.

RailNutNE wrote:Cowford, this is a great idea provided that PAR that can offer decent service. It would probably involve a larger interchange track at Sherbrooke as well. Does anyone else find it funny that the state of Maine seems to be putting so much money into the Brownville to Jackman portion when it is just a bridge line?

Regarding Searsport, I think the time has passed. Even if the economy recovers and they can steal business from Halifax, etc. it will be at least 3 years to get the infrastructure in place. I don't know how much money the MMA is losing, but from what I've heard there is no way they can afford to continue losing at current pace for 3+ years.

Having said all that, I hope the MMA takes off because once it's gone I'm afraid it will be the end of the B&A/MMA for good.

The amount of revenue they would have to give to the SLR/GRS for the haul wouldn't be worth the cost of keeping it a straight MMA/CP operation. I don't see it being funny that the State of Maine is trying to support a home grown Railroad at all. I think its a good thing to try to keep a great asset like the MMA around. The States biggest problem is of course the lack of East/West Highway infrastructure. The MMA was screwed over by CDAC when they lost a lot traffic from NBSR to CN...

CN, I have to take issue with your points.

First of all, I didn't say it made economic sense (though I bet it would), I just said it would be interesting to see the comparison. That said, that's a pretty tall claim to say outright it wouldn't be "worth the cost." Not sure how well you understand haulage agreements (I've been party to negotiations in several); they can be pretty darn inexpensive on a per-mile basis.

Not sure what you mean by home-grown. While headquartered in Maine, MMA is owned by a Chicago-based company. And Railworld is in business not to run trains, but to make money, so would drop MMA like a hot potato if the subsidiary threatened the parent's health. There are four E-W routes that are available to serve Maine's rail traffic needs (PAR/SLR/MMA/CN over the top); leaving aside CN, those three routes host a total of 5 freight trains/day each way, give or take. If you placed ALL of that traffic on one line, that line would STILL be considered underutilized. Hence, you should be able to acknowledge the point that the former CP line could arguably considered redundant. (PS - not to go off on a tangent, but consider that Florida, with its manufacturing base and a population 12x that of Maine, makes do very well with two primary and two secondary rail gateways.)

The state's got MUCH bigger problems than the lack of an E-W highway. Let's see, for starters: notorious anti-business attitude, logistically disadvantaged, one of the worst tax burdens in the country... The primary beneficiary to any EW highway (assuming you're talking about something that parallels the MMA) would be Canadians... and certainly not MMA.

Re the CDAC issues. MMA had every knowledge of CDACs traffic position when it purchased the line. Lost business serves to make the property less valuable, but MMA didn't get screwed over, per se. It's like buying a car and the owner tells you the transmission leaks. You may be fuming as you later write a check to AAMCO, but you knew about the problem when you bought the car.

To reply to your said points.

First of all. I am a Business student at the University of Maine. This makes me no expert at all but this also doesn't make me ignorant to business operations. From a text book point of view it wouldn't make economic sense to use other companies to move a product from Point A to Point B because we all know that the more railroads you add into the equation the smaller cut the railroad would get. Thats not to say that if the cost outweighed the maintenance costs they wouldn't do it but obviously since the railroad doesn't do it then it isn't feasible (I'm talking about reality here). I've seen the ABC routes in the past run a few trains and then falter off. I think the most recent was the Johnson City coal train using like 4 or 5 Railroads to get to the destination.

Home Grown companies are those that were born and raised in Maine. The MMA was born and raised in Maine. Railworld is based in Chicago. The MMA has offices in Farnham and Brownville, Maine. The workers of the MMA are from Maine, Quebec, Vermont and where ever else they are from. There are still workers from the B&A era of things. That to me is home grown in Maine. Of the Four E-W routes you talk about, One is in the United States. That route has been plagued by service and maintenance issues and is notoriously unreliable (Although things are getting better). Shipping through Canada is a good option but the "heartland" of Maine is covered by Guilford and it would make little sense to send something headed to the South over the SLR or MMA to CN then down to say Georgia. And please tell me where you got the figure of 5 freight trains a day. the SLR runs 2 each way everyday, the MMA runs 2 as well and Pan Am runs typically 6. These are manifest freights they are carrying product in and out of Maine. Each E-W line has its advantages which could make it good. Geographically, the SLR line is a Portland/Auburn to Montreal route. A lot of containers that go to Auburn get trucked to Portland and places like LL Bean. Guilford is the heartland route and runs Bangor-Portland-Metrowest-New York. Its the best East West route for Maine. The MMA is the truest East-West route. The passing through Maine is a shortcut which cuts off 12 hours from the CN Line. I'm sorry If I got you into the wrong mindset that I'm focused on traffic that originates and terminates in Maine. Traffic that merely passes through Maine is still freight traffic. A lot of traffic passes around Maine instead of heading through it. Even with the Border delays the route is still shorter through Maine. However historically the service hasn't been there (CDAC letting infrastructure fall to the point where derailments happened weekly lost a lot of traffic from NBSR to route over CN). Look at the volumes CN is running around Maine. I think they have like 4 trains or something like that its always changing but those trains they run are dangerously long (130 or so cars). Also do you ever wonder how much traffic is sent around Maine by ship to New York? This could enter Maine at a competitive rate to New York or even Norfolk ect ect. The East West highway idea is a private venture using no funds from the State to build a billion dollar truck corridor. The fact is though if they could get traffic going back through the State and no around it, they could rebuild a good solid base. The MMA understands this and the biggest problem right now is that between New York City and Halifax there is no global class port. And while you may say the Demand doesn't exist for this traffic heres the point it doesn't need to. By adding the port itself you do two things. You open up a new option for shippers to switch over from Halifax or New York which can siphon off traffic. And secondly the new infrastructure can create new demand for something that never existed. The way to get this to work is to use the relationship with CP.

Lastly the MMA was obviously not ignorant to the fact that CDAC screwed things up but Ed did admit in an interview that he was eying the property many years before. Also I believe he came into the situation with a nostalgic idea of if you build it they will come. Or in this case if I come in things will get better.

So Searsport is going to be a world class port?

I'm sorry but its not going to happen,read the numbers from Halifax this year? not very pretty

The forest products industry is in bad shape at the moment so if both mills shut down (if not for good) I won't be surprised and east of NMJ its dead till you reach Quebec.This line needs a shot in the arm fast

Dont feel bad the NBSR is thinking long and hard about the St Stephen branch and everything west of Saint John the MMA is not alone

Responding to your points:

From a text book point of view it wouldn't make economic sense to use other companies to move a product from Point A to Point B because we all know that the more railroads you add into the equation the smaller cut the railroad would get.

I think you are confusing line-haul "alphabet" routes with the haulage agreement idea that I mentioned. I ask this respectfully: do you the understand haulage agreement concept? Under haulage, the contracted carriers (in this case PAR and SLR) typically charge a per-car or per car-mile fee, regardless of commodity or "retail" revenue. In addition, those carriers are not responsible for car-hire. As such, the pricing is normally very reasonable. A New England example of this was the agreement established in the late 80s (?) between GRS and Conrail to divert interchange traffic from Rotterdam Jct to Barber Station, MA. CR charged a flat rate of $75/car, I believe.

Regarding train counts, I stated my numbers on an "each way" basis. I'm not up on actual train counts, but it looks like you're mixing TOTAL and EACH WAY. Again, my daily estimate is 5 EACH WAY, or 10 TOTAL, give or take. If I'm off by a couple, so be it: my statement of underutilization still stands.

Regarding routes, a couple of points: If the old CP line is so strategically superior to the CN line, why has the CN not taken a more active stance in trying to control that line? Also, "truest?" The difference in mileage between Maine and, say, Chicago is minimal comparing the US route vs routing 'over the top." By the way, keep in mind that when you are supporting an "over-the-top" routing, you are exporting transportation jobs and services to Canada. Not saying that's wrong, but a lot of people would.(Btw, 130-car trains are not dangerously long)

And what the heck does Halifax - New York container traffic have to do with the line west of Brownville Jct??? Regarding ports, shippers DON"T HAVE AN OPTION about ports. They use the ports the steamship companies call on. And given the continuing trend of larger and larger container ships, port selection is going to DECREASE over time, not increase. I recommend you read "The Box" by Marc Levinson. It gives great perspective on why port locations have evolved as such since the dawn of containerization in the 50s.

I understand the concept but New England has the East-West problem we discussed earlier. A huge lack of Class 1 activity is also a huge issue. I'm asking if your train count is total for all Maine railroads both ways daily. I know personally that total it is 10-12 trains total being 2 on the MMA, 2 on the SLR and 6-8 on Guilford. The NBSR does run about 2 - 4 trains into Maine. Guilford runs branchline trains that originate and terminate in Maine. Examples are Bucksport trains and the Keag job. The MMA runs a train to Van Buren which interchanges with the CN which could be consideed. The CP line is strategically superior and the CN HAS taken an active stance on controlling the line. They did this by entering into a haulage agreement with NBSR in the late 90's. This is when CN retreated out of Island Yard and the NBSR took over but routed most traffic over CN. I believe this is a 20 year agreement but Im not positive. The Shippers don't need to have the option about the Port, as long as the steamship companies are getting a good deal. Perhaps a Searsport Container port could take on an aggressive approach and offer incentives to shipping lanes that go through there port.

Umm, not sure where your numbers are coming from, but the MMA has only been running east-west trains like 3 days a week lately and the SLR is running 1 east-west train 6 times a week. So that makes a TOTAL of 18 trains/week on those lines. I would definitely agree that is underutilized. I'm not sure your Class I argument has any merit either. For example, if CN were to come in and take over the SLR, do you really think all this traffic would appear out of nowhere? I'm also afraid that your argument for an east-west highway would definitely cripple that old CP line.

If that state of Maine wants to get serious -- lets create some tax havens for corporations willing to develop real business for Maine along those lines. Just look at how much the Port of Auburn has changed in the past generation. I think looking to the future, the POA and the SLR will be the rail hub of the state of Maine.

Railnut's spot on: The lack of class 1s is a result of low traffic density in the region, not the other way 'round. Why do you think CN spun off the old GT link to begin with? (Not to mention why CP spun off the International of Maine line.) By the way, FEC is not a Class 1, and FL does pretty well by them.

I don't know your point about the Bucksport locals, etc. As the issue is focused on traffic to the west, NBSR/local Maine traffic is not relevant to the discussion.

You seem pretty adamant about the viability of Maine-based, world-class container terminal. Perhaps you could provide some justification for such a terminal, e.g, why would a ship operator want to divert their mega-ship from Halifax, NY/NJ or Montreal to Sears Island. Keep in mind the following excerpt from a container ship article: " Container ships now carry up to 15,000 TEU (approximately equivalent to 35 100-car double-stack intermodal freight trains) on a voyage."

My numbers come from personal observation. I'll admit I forgot about the fact that the MMA is down to 3 days a week and that is my bad. The SLR I know runs 2 trains a day because I live in Norway, ME 4 months out of the year and know people who work on the railroad both East and West on the Railroad. The MMA I haven't been up to Brownville recently but I live an hour away and 20 mins from NMJ. With Guilford I went off on a random tangent just talking about number of trains running in Maine, it had nothing to do with the discussion I know. I'm not saying there is a need for Class 1 railroads in Maine but if there were class 1's in Maine, things would be better (We all know that.) When I'm at home I go to Auburn probably 2 times a week. My father works in Portland and has for 35 years so I've spent many times in Portland and Rigby. The last time I was down there was during Thanksgiving and I'm sure several things have changed. Last time I was in Auburn railfanning was mid January. I try to keep up to date with number of trains as much as I can so I can stay in the loop when I railfan. My thoughts about the Port is that it is a good time to take this opportunity. I dont know if you know but they want to build a second Port in Halifax (Medford I believe is the name) and I haven't checked the progress of the project but I do know that if the goes through then you can kiss Sears port goodbye. The Geographic location in the US is a natural advantage as well as lack of congestion. I know that the demand has existed in the past when they made the Port in Portland (Which does recieve containers) and wanted Guilford to connect to it but they never did. I'll admit I'm not as knowledgable on the ship part of the equation but I guess thats why Im a railfan not a shipfan (Lame humor?). I think NBSR is a big part of the equation and relevant to the discussion. Traffic from NBSR is important to Guilford and the MMA. Also like I said I don't have any idea how much traffic is interchanged from the CN up in Northern Maine but last time I was up there they had 100 cars waiting to be picked up (2005 obviously its a lot less now cause of the economy).

Listen obviously this discussion is getting to the "I know more than you" and is nothing more than a rhetoric war. Now listen, I'm a 19 year old College student and I've been following railroads ever since I can remember (Thanks Dad). I'm not trying to be any sort of expert but I'm also trying to prove that there is a future for rail in Maine. We all know things have to change in Maine for there to be a real future for the MMA. All I want to do is say that the pieces are out there to assemble a viable East-West railroad. And the CP line is a true East-West railroad just look at it on the map and from St. John to Montreal is almost a straight horizontal line. I just want to see the railroad succeed and I think they can. If you guys feel otherwise then I suppose you have your reasons but don't you think its good to think positive and try to make progress? Its better to have tried then to have not at all.