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Benton County Could Get Intermodal Rail Yard by Bennett Hall Gazette-Times, October 30, 2013

A container shipping shakeup at the Port of Portland could turn into an international business opportunity for a mid-valley farmer and railroad operator.

Larry Venell grows grass seed and other crops in south Benton County. He also operates a shortline freight railroad from a covered loading dock at Llewellyn Road south of Corvallis, transporting agricultural commodities for himself and neighboring farmers.

Now he wants to acquire another stretch of track to the south, part of the defunct Bailey Branch line, to create an intermodal loading facility where shipping containers could be transferred from trucks to railcars.

The reason? To capture a piece of the straw export market that will be up for grabs when trans-Pacific container carrier Hanjin Shipping Lines stops serving the Port of Portland in January.

Venell approached Benton County officials last week about acquiring the northernmost 3-1/2 miles of the 18-mile Bailey Branch right of way, which the county is in the process of purchasing from the Union Pacific Railroad. The UP halted service on the line in 2007; Venell bought the 5-mile stretch between Llewellyn Road and the Corvallis terminus to maintain a rail connection to the area.

"With the pullout of Hanjin Freight Lines from the Port of Portland, I believe there is an opportunity to load straw containers here in the south Willamette Valley on trains to be shipped to the Ports of Seattle and Tacoma," he wrote in a letter sent Friday to the Benton County Board of Commissioners.

"This straw will continue to be exported to Pacific Rim countries and a new loading point for delivery to Washington ports is needed. Because the closest intermodal yard is in Portland, containers are now being trucked to Portland and loaded on trains for the trip to Washington ports."

Straw is a major byproduct of the Willamette Valley grass seed industry, which needed a cost-effective way to get rid of it after the state began phasing out field burning 30 years ago. Since then, South Korea, Japan and other Pacific Rim nations have emerged as customers for Oregon straw, which is used for cattle fodder.

"Most of the straw you see in the valley is exported overseas," said Paul Marquardt, an Oregon State University Extension Service agent who also serves as interim secretary to the Agriculture Fiber Association, a statewide trade group.

Last year, the value of Oregon straw and hay exports was $42.6 million, Marquardt said.

On Tuesday, Venell pitched his idea of an intermodal rail yard to the three-member Board of Commissioners at a work session in Corvallis.

"Right now, the straw is trucked to Northwest Container up in Portland," Venell told the commissioners. "The straw companies would love to have the opportunity to load that straw onto railcars here in the Willamette Valley."

Venell said he wants to move quickly on the deal, before contractors for Union Pacific remove the rails and ties from the segment of right of way south of his property.

The board agreed to consider the proposal, but Commissioners Annabelle Jaramillo and Linda Modrell balked at the idea of selling the segment of right of way outright. Instead, they said they'd prefer a long-term lease.

That way, if the intermodal yard fails to get off the ground, the county would still have the full 18-mile Bailey Branch corridor available for use as a route for a future railroad line or, alternatively, a trail.

"It's about being ready for the opportunity if it comes up," Modrell said.

County counsel Vance Croney said he would draft a letter outlining the county's interest that Venell could use to negotiate directly with the railroad's representatives while Venell and the county continue to work out details of a possible right of way lease or purchase.