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Lack of Rail Service Pinches Idaho Mill by Barbara Coyner, Freelance Writer Capital Press, April 21, 2006

PRINCETON, Idaho -- Trains stopped calling on Bennett Lumber Products on Jan. 7, and company vice-president Brett Bennett ordered his lumber trucks to roll for around-the-clock shuttles instead. He'd tried to broker a deal with the St. Maries Railroad out of either Plummer or Bovill, but no dice. When Watco red-flagged the Palouse River-Coulee City rail line at the Washington-Idaho border, the matter was decided. Lumber would have to be trucked to the Bennett mill at Clarkston to catch the train.

But the lack of rail service has more ominous outcomes for the whole region, Bennett feels.

"There are a lot of trucks out there and it's going to create accelerated degradation for our roads," said the third-generation mill operator, explaining that one railcar carries the equivalent of three truckloads of lumber. "Is there a value to safe highways? We need to look at that as part of the economy too. I'm not anti-truck. We have trucks of our own, but we need to consider accelerated degradation of our roads as a serious problem."

Beyond chipping away at the company's bottom line and competing against other mills with good rail service, Bennett describes a ripple effect for agriculture. When Washington state bought the network of eastern Washington short lines, Kansas-based shortline operator Watco assumed day-to-day operations. Deeming some lines unprofitable, Watco tacked on a surcharge of first $250, then $870, per car. Some segments of the rail line were already seasonal in nature, so the new charges automatically deleted several customers. Bennett Lumber, a long-time steady customer on the Idaho portion, couldn't justify the $870 per car, so it too canceled cars. Now as farming season ramps up, Bennett sees his farming neighbors in a world of hurt.

"It's that time of year when farmers need fertilizer, and that's been temporarily solved by bringing it in by truck. But Washington is feeling the degradation of its highways. If something doesn't come along to change things by harvest season, they know they'll lose families and farms. Barges and trucks are part of the system, but you need rail too, especially with these higher fuel costs."

For Bennett Lumber, having four to six cars call on the mill has been a far cry from the glory days of logging when 100-car trains chugged out of Idaho's timber country. Yet the company offered steady growth for a small railroad as it pitched rail service to its clients.

"We usually had six cars per week, and we were trying to get more of our customers to ship by railcar," Bennett said. "Now we have to push them back to truck and it takes pressure to go backwards like that, especially with higher diesel costs. They might end up buying from someone else. We usually shipped about 30 percent of our product by rail, but we were trying to increase by 3 to 5 percent per year. All white fir goes best by rail because it's a heavier product. Nobody wants trucks. Douglas fir, pine and cedar can go the other way, but diesel is up, so rail can work better. It's a struggle for us, an added dynamic."

Faced with more pressure on transportation costs, Bennett Lumber is now rethinking its plan of adding a small log mill to its Princeton facility. The new mill would handle the small-diameter logs frequently coming out of the area, and it would boost the local economy. Bennett said the mill would even add a new rail spur, if rail service again became available and predictable. "But we don't know from one day to the next whether we'll even have a rail line," he adds.

Bennett noted that a group of shippers met recently in Spokane to unify the group and hire a lobbyist. He also mentioned that Idaho politicians are trying to remedy the situation from their side of the border. As the railroad owner, Washington state at this point occupies a precarious spot, with Watco not necessarily delivering service in a consistent manner, he said, adding that salvage value might very well outstrip revenues from actual service. As Bennett watches farmers work toward a solution before harvest, he finds himself more desperate because he ships year around.

"Watco says the line is not profitable, but then they turn around on some days and say they're going to reopen. It's a chess game like you wouldn't believe."