MMA dispute with Canadian National ends up in court

From MPBN:

MPBN wrote:A federal court has agreed to hear a legal dispute in northern Maine between two railroads. Each claim they have the exclusive right to bring rail cars into a lumber mill in Madawaska. The outcome of the case could affect the already uncertain future of freight train service in Aroostook County.

Read more at: http://www.mpbn.net/News/MaineNewsArchi ... fault.aspx

Hat's off to MPBN for such reporting accuracy. I never knew Madawaska was a saw mill/lumber mill and shipped wood.

I find the comments of Chop Hardenberg (someone whose opinion I normally value) odd:

"I see this as almost a loss of northern Maine. If we lose any rail connection south of Madawaska down to Millinocket and the prime job provider in the northern part of the county is sending its rail out over Canada, we may as well turn that area to Canada in a way."

Let's not get all xenophobic and heap this on CN and the evil Canadians. Northern Maine's LUCKY that CN connection exists. MMA structured their recent line sale with the intention of routing MAD traffic over the top... they couldn't give a damn which way the traffic moves - as long as they can squeeze out a line-haul division of revenue. And anyway, MMA's existing preferred route out of Maine (via the old CP) is, well, out over Canada.

In yesterday's Bangor Daily News:

Bangor Daily News wrote:The head of the Twin Rivers Paper Co. in Madawaska said Thursday that his company’s future is jeopardized by shipping costs that have escalated as two rail lines dispute track rights.
...
Twin Rivers is intervening in a lawsuit between Canadian National Railway Co. and the Montreal, Maine & Atlantic Railway. Dutton said the mill has been unhappy with the service from MM&A, which has been handling switching at Twin Rivers and also has been hauling some paper down through Maine.

Read more at: http://www.bangordailynews.com/story/Bu ... ion,159422

Twin Rivers to truck paper to Canadian National:

Bangor Daily News wrote:Twin Rivers Paper Co. has opted to truck its paper into Canada to be loaded onto freight cars there rather than use Montreal, Maine & Atlantic Railway trains, the latest escalation in a northern Maine track battle.
...
Using MM&A to ship paper all the way south to Montreal would take five to six days, if all went well, said Dutton. Using MM&A to connect with Canadian National in St. Leonard would get shipments to Montreal in three to five days, he said.

Using the new system — trucking into Edmundston, then loading onto freight cars — means Twin Rivers’ paper gets from the mill to Montreal in two days, Dutton said.

Read more at: http://www.bangordailynews.com/story/Bu ... oad,160865

Thanks for posting 407. Well, this certainly (and unsurprisingly) appears to be blowing up in MMA's face. You only have to look as far as S Paris and New England Public Warehouse to understand that just because a mill is rail-served, it's not necessarily captive. All things considered, I'm sure that TR would rather load rail-direct; however, it's ironic that the squabble is giving the mill more leverage... they now know a way around MMA and they now have insight into MMA's revenue share.

Pigs get fat, hogs get slaughtered.

Back in the 1980's, the B&M, then Guilford service to the Farmington NH
plant of Davidson Rubber (auto parts) became worse and worse, until
finally, Davidson began shipping the finished product by truck to Paris
Maine, which was an 85 to 100 mile trip, depending on which route was
taken. At Paris, the products were shipped via the Grand Trunk Railroad,
now the St. Lawrence and Atlantic RR, through Canada to auto plants in
Michigan and elsewhere. At its peak, Davidson had shipped as many as
15-18 carloads a day out of Farmington.

MM&A should have seen this coming...

What was BAR's rationale for granting CN trackage rights over the BAR in the first place if this was one of their largest customers? Wouldn't it be in their best interest to switch originating and terminating traffic at the mill regardless of whether it was going to MMA or CN?

They were desperate for cash and got $5 million from the CN in exchange for those rights.

In today's Bangor Daily News -- federal judge finds in favor of MMA:

Bangor Daily News wrote:In a 77-page ruling released late Friday afternoon, U.S. District Court Chief Justice John A. Woodcock Jr. rejected Canadian National Railway Co.’s motion for a preliminary injunction that would allow it to carry product to and from the mill.
...
Robert C. Grindrod, chief executive officer of Montreal, Maine & Atlantic, which is headquartered in Milo, said he was satisfied with Woodcock’s ruling.
...
Twin Rivers President and CEO Jeffrey Dutton said he was disappointed with the ruling. “We will continue with our trans-loading [trucking arrangement] as we continue to save money [with that] versus using the MM&A,” Dutton said in an email. “The MMA has yet to present us with a proposal that both meets our service requirements and is competitive from a cost perspective.

Read more at: http://new.bangordailynews.com/2011/04/ ... ref=latest

I'm curious to know how this will play out with the Irvings taking over the lines north of Millinocket? Is it not a moot point now? Are all existing contracts/rates with shippers null/void after MMA's "abandonment" and EMRY starting from scratch?

Given Twin River's comment, sounds like a pyrrhic victory for MMA.

fogg1703 wrote:I'm curious to know how this will play out with the Irvings taking over the lines north of Millinocket? Is it not a moot point now? Are all existing contracts/rates with shippers null/void after MMA's "abandonment" and EMRY starting from scratch?

I'm sure someone will correct me if I'm wrong, but I believe that MM&A deliberately kept the short connection from Madawaska to the CN for itself, specifically so it could keep the mill traffic.

For that reason, and to prevent the new operator from having a direct connection to CN. They tried that on the south end, too, but overhead rights between Millinocket and Brownsville Jct were finally agreed to as part of the sale to the state. The original abandonment, as proposed, would have kept a new operator isolated from interchange with other carriers and held the traffic captive to MMA interchange.