WisBusiness: State stuck for solutions to railroad’s service cuts

By Joanne M. Haas
For WisBusiness.com

When the Wisconsin Central Transportation Corp. stockholders approved the merger agreement with Canadian National Railway Co. on April 4, 2001, Thomas F. Power, the chief executive officer and president of the Wisconsin rail, praised the deal.

“The merger…is the best transaction for our shippers, stockholders and employees,” Power said that day.

Things have changed.

More than three years later, Ken Morris of Northwoods Distributions Services in Rhinelander was complaining about the sudden notification by Canadian National of its plans to slice its service from five days to three days per week.

Morris, the firm’s general manager, says Northwoods has a history of supporting the railway by increasing its volume levels and use of rail cars. So this slash of service is bad news.

“Canadian National is making a change to benefit themselves short term,” Morris said. “In the long run this change will hurt not only Canadian National’s profitability but also local businesses.”

And that’s the reoccurring theme state lawmakers have been hearing from northern Wisconsin businesses growing ulcers as they contemplate their futures if Canadian National slices its service days.

The Assembly Transportation Committee led an informational hearing this week regarding what appears to be the slow demise of rail service in the northern region. And, as a state transportation official testified, there may be next to nothing the state or local officials and business leaders can do about it.

Democrat Rep. Gary Sherman of Port Wing and Republican Rep. Don Friske of Merrill asked committee chair Rep. John Ainsworth, R-Shawano, to call the meeting after each heard repeated complaints about a slow decline in service provided the northern counties by Canadian National. Sherman said rail service is vital to the northern communities, where forest products are a major industry. Since the Canadian rail company purchased Wisconsin Central in 2001. Sherman says constituents have complained about a decline in service coupled with a “radical, unprecedented increase in rates.”

Friske says it was no single story nor incident that prompted him to ask for the hearing, but a “reoccurring theme” and he wanted to learn if the problems were legitimate and what could be done.

The answer, at the state and local level, is nothing. Ron Adams, director of the state’s Bureau of Rails and Harbors in the transportation department, told the committee due to a federal law change rail companies can nearly do what they’d like.

“Railroads are largely free of economic regulations at any level,” Adams said, adding the companies can add and drop lines as they like. “The state has little to say about it.”

Transportation consultant Kevin Soucie was asked to check with his client — Canadian National — and report back to Friske and Sherman. Depending upon the report, another meeting may be called to discuss what, if anything, can be done.

The state does own about 550 miles of rail lines in the southern areas as part of its rail program. Statewide, about a dozen freight railroads operate on about 3,500 miles of rail line in 36 counties, carrying items such as pulp and paper and coal.