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12/5/2001



Rail News: Rail Industry Trends

RailAmerica set to shutter E&N's freight service


Chalk one up in truck's victory column in the ongoing North American rail vs. truck carload competition. RailAmerica Inc. Nov. 29 announced plans to discontinue E&N Railway Co. Ltd.'s freight services on Vancouver Island, British Columbia, on or about Jan. 1 due to the 181-mile short line's largest shipper's recent rail-to-truck conversion.
In addition to the Port Alberni, B.C., shipper greatly reducing both inbound and outbound carloads, another large E&N shipper recently closed a pulp mill at Powell River, B.C.
"[With] our largest shipper on the E&N moving to truck, we don't have the revenue to sustain freight business on the line," says Wayne August, RailAmerica assistant vice president of investor relations.
During the past year, E&N moved about 8,000 carloads — the equivalent of 20,000 trucks — but RailAmerica officials expect a drastic decline in the short line's 2002 carloads, perhaps less than half its historical volumes. The short-line holding company also anticipates severe employment cutbacks on Vancouver Island.
"We're disappointed that the discontinuance of freight service will result in significant staff reductions … our intent when we took over the railroad in 1998 was to not only preserve rail service on the island, but to grow it as well as we'd historically done with our other acquisitions," said E&N Senior Vice President Robert Parker in a prepared statement.
Pursuant to a current agreement, E&N plans to continue providing trackage and crews to operate VIA Rail Canada Inc.'s Victoria-to-Courtenay, B.C., passenger rail service. However, E&N officials are holding discussions with VIA Rail execs about the future of passenger rail on the island.


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