MMA To File 241 Mile Abandonment With STB

I was recently up in Fort Kent and I noticed there were bulkhead flats in the yard there plus tank cars (propane?)

Do the Fraser mills in Masardis and Ashland generate any rail traffic?

Jon

This may be the begining to the end I can't see the old CP route lasting 5 years after all this goes through

So basically the MMA more or less wants to become a bridge line between the Quebec border and NM JCT?

Obviously Burkhardt is just positing for state ownership, state funding, or an operating subsidy.

Truth is if these clowns could get the business from some of the industries previosuly mentioned that currently goes by truck, while it may not be "booming", business woudl be not half bad. Also consider the current economic climate. Everybody is hurting and traffic is down, everywhere.

But then again, Burhardt has been running teh railraod for what, 6 or 7 years now? Can anyone name one significant thing he has done to improve viability or build traffic sinc he got there? The only thing Mr. Burkhardt seems interested in is the income from the contract work at Derby.

As for previous comments, Iron Roads' problem was primarily a financial management/cash flow problem, not so much a traffic problem.

Oibu wrote:

Truth is if these clowns could get the business from some of the industries previosuly mentioned that currently goes by truck, while it may not be "booming", business woudl be not half bad.

I totally disagree. I know some of the management people at MMA and believe me, they work very hard and are very professional. Calling them "clowns" only shows how little you know about them.

The fact is that this state (Maine) is a horrible place to do business. As a small business owner myself I struggle with state policies that are anti-growth, anti-business, and worse (for the railroads), anti-industry. Frankly, one of the only positive industrial developments in this state in years has been the Cianbro facility in Brewer. Cianbro fortunately had enough clout to get this through the red tape and over-regulation and anti-everything special interest groups. A lesser company would not have been able to do it.

Add to this that the paper making industry has become globally competitive, enviro groups repetitively try to shut down the forest products industries through "clear-cut" referenda, and transportation policies favor the trucking industry (look how hard they are trying to get the 100K limit on I-95), and it's a wonder that railroads survive in Maine at all. Instead of calling their professionals childish names, why not congratulate them and look at how you can positively help them to compete and grow?

Burkhardt is a smart guy, but he's not a miracle worker. He had to clean up the mess left behind by Iron Road, and on top of that, the Maine economy (and the U.S. economy as a whole) has been declining steadily during the entire time that MMA has existed. Burkhardt and everyone else at MMA have been trying to push a boulder up a mountain. I think they've done about as well as could be expected, all things considered. Look at how many of their customers have either relocated out of state or gone out of business. That's not MMA's fault. Of the Top 10 "most economically stressed" counties in New England, 6 are in Maine -- right smack dab in MMA territory. Every business in those counties is struggling to stay afloat.

^ I never called anyne at the local level on MMA a clown, only Burkhardt and his corporate cronies who obviously could care less whetehr or not MMA tanks, as long as it doesn't cost them money and they can still use Derby. Near as I can tell, part of teh struggle by MMA people at the local level has been to get anything more than the occasionally toss of a half-eaten stale cookie from their parent. On the local level, heck yeah MMA's people have done a great job. But it didn't need to be so hard for them as it's been. Burkhardt is not a railroader, he's a money-maker first and foremost; if a railroad makes him money great, if not he'll move on.

Look at all the traffic that moves from facilities in the county by truck, and formerly went by rail. You're seriously going to tell me that no way, no how could MMA ever get that traffic back? I don't buy it for a minute. Even in this economy there's at least one if not two good-sized manifests moving each way in and out of the County ever day... only it's via 1, 95, and the TCH. Geez, last time I was up a couple months ago you couldn't stand along side Rt 2 in 'Keag for 2 minutes without a log or chip truck going by. Obviously MMA may not be financially or physically able to capture all of that, but geeze... even 10-20% of what I saw in logs and chips on Rt 2 would be huge. I'm just using that as a general example, of which it is not unique.

One way or the otehr teh fact of the matter is that Burkhardt is hoping to scare the state enough to get some state funding , which I suppose I can't fault him for, everybody else does it why shouldn't MMA? It just would have been nice if Railworld had put some money into the MMA 3-5-7 years ago when it might have really made a difference. He knows that even if the state knows his bluff, they probably won't risk the potential fallout. Perhaps if the state gets on board, it will at least provide that which MMA has desperately needed and that Railworld couldn't muster up.

People of MMA are great. That's not where the problem lies...

In the end, there's just too little traffic (mainly low revenue) spread over too many miles. Not sure anyone could make a go of it the way all the mills are closing.

Oibu, you sound understandably frustrated at the situation, but your characterization of Burkhardt is unfair and unfounded. The fact that they've been kept that property running intact for over 6 1/2 years is a minor miracle in itself and a testament to Burkahardt and the entire MMA team making things work on a shoestring. That said, it's arguable that Burkhardt & co. did not do a proper job on due diligence in evaluating the purchase of this property in the first place. Five red flag issues were obvious (and stated in this forum at the time) that would have given most investors the heebie-jeebies: 1) The property was drained dry by prior owners; 2) Traffic density sucked then almost as much as it does now; 3)There were precious few base-load customers on which to rely, negative population growth in the region, and little, if any, opportunity for traffic growth; 4) Virtually all Maritime traffic would be subject to competition from PAR and CN, thereby limiting overhead volume and unit revenue potential; and 5) The most strategic connection the BAR had was with a hostile carrier.

Since when was the B&A's western connection with CP "hostile"? If you're reference is to Guilford, the bulk of B&A interchange has been with the CP since at least the early 70s, so while Guilford's issues have certainly not helped matters, that only impacts the roughly 30% or less of B&A traffic that has been interchanged with Guilford or MEC over the last 4 decades. B&A looked to CP as it's primary western connection not long after Buck Dumaine's arrival on the scene.

As for Burkhardt's management of the MMA or lack thereof, I stand by my comments. Unfair? Unfounded? Not one of the naysayers so far has produced any specific examples of Burkhardt pumping any significant capital, making any improvements, or showing evidence of any top-down aggressive marketing and pursuit of traffic. Perhaps I'm wrong, but I've been observing teh MMA since it's inception and I'll be surprised if anyone here can actually come up with concrete cases where Mr. Burkhardt and his corporate team have really rallied for teh MMA's cause. Since I haven't heard of any such cases in the last 7 years on this or other forums, in first-hand observation, or in discussion with the railroaders themselves, I'll be pretty amazed if suddenly, right here in this thread, a whoel list of efforts and/or expednitures comes to light, teh facts of which no one has yet heard of. Remarkably though, yes, despite all of that MMA's local managemnt and the railroaders "on teh ground" have made a pretty good go of it!

I do agree that the B&A/MMA had "red flag" issues from the start, but one would have assumed that Burkhardt had enough experience to know what he was getting into, and enough desire to make it work that he'd do what was necessary. But I guess glimmers in Poland and elsewhere must have distracted him, as so often happens with multi-railroad regional conglomerates who operate a line with great promise and great success, right up until "the next big thing" comes along it all goes to heck because the existing operations are left to fend for themselves. Or perhaps teh plan all along was to squeeze what he could out of the railroad and Derby's capabilities, with no serious personal or corporate commitment to long-term operation or viability? The motive power philosophy does seem to support that concept, to teh credit of MMA people they've mostly doen alright with them but what a bunch of clunkers they were left to patch up! They've done an amazing job with what they have, but geeze... talk about trying to make silk purses from sows' ears. Even many if not most second-hand-owner shortlines had retired their B23-7s by the time Burkhardt bought the BNSF ones!

Regardless, hopefully the economy improves and/or the state steps in before Burkhardt removes any rail.

Keep in mind that MMA's been in crisis mode since Day 1, when Millinocket went dark. Which reminds me, there was another obvious red flag. One of the B&A's "biggest" customers (Fraser) was already tied to a long-term agreement with CN that essentially ruled Fraser out as a significant contributor to MMA's bottom line. Anyway... it just doesn't wash. Burkhardt has a reliable history of significant investment in, and growth of railroads, most notably the Wisconsin Central, which had been left for dead by CP/Soo Line. To have invested further money that showed no hope of return would be plain bad business. And regarding traffic potential... I know they tried to get TOFC going overhead. Other than that, I don't know what efforts they made, but I doubt the "corporate team" deserves being bashed for the lack of business generation. Maybe the question should be: What business have they let go by the boards? For instance - chips and logs going down Rt 2 through Keag? Sounds like the origin or destination is on PAR. Two-line haul... short haul... at least one end not served by rail... low value product competing against a tri-x trailer on state roads with a 100,000lbs GWL... you'd stand a better chance of Comrade Senator Snowe actually voting for fiscal responsibility than for MMA to be successful with that!

Oh, and my reference to strategic connection was not CP. I did not say that it was necessarily the primary interchange, volume-wise...rather, the most strategically important.

What I'm hearing from you guys is that Burkhardt is a great railroad manager, has always tried to make the most o fteh MMA, AND that the railroad obviously hasn't had any potential for growth in quiet some time for x number of reasons (short hauls/trucks/interhcange/nonexistant traffic).

By definition, given that MR. Burkhardt bought the railroad, one or another other of those three statements that some here are trying to inextricably and unconditionally marry must be false, or at least not 100% true. If there was no money to be made from Fraser's paper, log and chip traffic, etc., AND Mr. Burkhardt is a great railrorad manager, AND Mr. Burkhardt's intentions of giving the MMA his best shot for th elong-term and not just as a convenient "home shop" rang true, he woudn't have bought the railroad. You can't say in one sentence that he knew what he was doing, and then in another say nothing the railroad moves or could move can make money, unless soem other piece of teh equation shifts to fit. I'm not trying to put anyone down here, I'm just trying to figure out how you guys think it makes sense to say what has been said when teh pieces just don't fit. Facts prove that Burkhardt can run a railroad, but when it comes to MMA there's more evidence of what MMA has done for him and his ventures elsewhere, than can be said going the other way.

Oh, and one last observation: no one here finds it "curious" that Mr. Burkhardt's railroad in Colorado has been known to use some of the best power that was left on the MMA property when IRon Road departed, and has taken others and sent them out on lease (i.e., they're $$ makers- but not for MMA, since they're owned by Railworld Leasing), rather than operate them on MMA? You don't see NS leasing out it's C44s to UP then and running it's own trains with ex SP SD45T-2s, do you? Just a thought, but I think it speaks volumes on where Ed's priorities are. MMA is just a vehicle that allows him to more easily and cheaply accomplish his otehr goals, a contract shop to fatten his wallet a little more, and at the same time perhaps the rairlaod itself puts an extra dollar in his pocket here and there.

Oibu, that's exactly my point. I've never understood why Rail World bought it in the first place. I very much doubt the MMA Board of Directors are all gathered around a big mahogany table right now with evil grins, rubbing their hands together at the vision of all the money they've made in their MMA investment. Rather, they're probably wincing at the bad investment choice. However, if there is SPECIFIC evidence that it was a good investment, I'd like to see it. For instance, exactly how much foreign shop work did Derby do? And (A) wouldn't that be good for MMA as it keeps local talent employed, and (B) provides an additional revenue source for Rail World. (PS: Any profits from foreign work would typically NOT be poured back into railroad operations... that's not how it works.)

About loco leasing, I don't know that market, but a hunch... any locomotives they took off the MMA system to lease were probably more viable as lease units than the ones that were used on the property. I've never heard of significant issues re power shortages/junk locomotives on MMA, so why is that a problem? Any sensible business person's going to allocate their fleet in the most profitable manner.

I think once they turned the railroad around (Which they did) they were very pleased. Everything was going great in 2005-2006 and then the talk with CSX about getting the line from Montreal to Syracuse spun around. If they had acquired that line I think they would have been in a great position to bridge traffic from Maine/Maritimes away from CN and Possibly Guilford. Of course there were problems with this and the deal fell through. Since then not much has happened.

Purchasing the Montreal Secondary seemed to me to be a non-starter if it was tied to any sort of alternative gateway for their originated traffic, or worse, to develop a competing overhead bridge route. Traffic density is the driving economic issue for MMA (and the region) and it seems the additional costs would outweigh the additional revenue of running their traffic to Syracuse. They already have a gateway to CSX (and NS) around PAR via the WACR. And, lastly, from a profitability standpoint, the type of traffic which generally has the lowest contribution (profitability) is overhead bridge traffic because it's highly competitive with little control for the intermediate carrier. The one thing that perhaps could change this situation, both in terms of the health of their existing system or one that included CSX's Montreal Secondary would be a new, big traffic generator. But, that seems remote, including the Searsport container port initiative.

Consider that since they took over from Iron Roads:

- By far their biggest customer, the Millinocket mill complex, has either been shut down completely or operating at a greatly reduced capacity since day one.
- They were unable to reverse through Legal means the Fraser deal with the CN, and since then have been unable to win back much if any of Fraser's business via their longhaul routes. Fraser has also been shut down or operating at reduced capacity for a long time.
- GP at Old Town closed, which while not directly served, provided them with a large Woodchip transload move. Not sure if the new owners are using this service anymore.
- Domtar at Woodland (jointly served by ST & MMA), has closed their OSB and Paper plants for good and recently shuttered their Pulp plant. The Pulp plant is running again but as far as I know not being rail served. During the MMA era, that plant has switched to almost 100% export via truck to Eastport.
- At least one or two of the Lumber mills that MMA serves have closed, the others are on life support due to the building slowdown.
- The transload subsidy at Saint John for Lumber reloading expired which more or less killed that business.
- Can't remember their name, but another large Lumber shippers' plant in Quebec was closed for a long time due to fire damage.

Add to this the fact that their traditional interchange partner, CPRS, has been raising rates significantly and providing poor service on the former D&H, while at the same time, ST seems to be improving their relationship with Irving and now has a strong partnership with the NS and CSXT, which both seem to prefer routing their Maritime traffic via the ST vs the MMA, and you can see why MMA market share out of the Maritimes is shrinking and becoming less and less profitable.