Rail company’s future threatened by train car tariff
BUDE – A new tax on users of the Brookhaven-to-Natchez railroadis threatening to cripple the viability of a top Franklin Countyindustry.
A track tariff being imposed by Natchez Railway, LLC, is forcingrailroad car repair and refurbishing company American RailcarIndustries to pay a switching fee of $700 for each car that entersand exits its facility. Company and local officials are reachingout to state and federal lawmakers to intervene on behalf of ARI,claiming the tariff will make business unprofitable and force thecompany to relocate, said Franklin County Board of SupervisorsPresident George Collins.
“American Railcar is going to leave Franklin County. That’s justtoo much money to spend,” he said. “We’re trying to get some helpwith it, talking to some of our leaders so they can help us keepthem from moving. We’re going to go all the way up, as far as wecan, to Washington, (D.C.)”
Franklin County Chamber of Commerce President Brad Jones said localofficials have also presented the matter to the federal SurfaceTransportation Board, a regulatory board that oversees railroadrate and service disputes.
“We want to keep ARI open, and we’re going to work with them in anyway we can to ensure that plant stays open,” Jones said.
One of Franklin County’s leading businesses, American RailcarIndustries has operated at its Bude location for more than 30 yearsand employs about 100 people. The company uses the Natchez Railway,LLC, line to store cars awaiting repair and move them in and out ofits facility on Gerard Street. ARI has never paid a switching feeto use the tracks in the past, officials said.
ARI officials refused to comment on the situation.
Natchez Railway, LLC, was formed last year to operate the 66-milestretch of track purchased from Canadian National, which sold thetrack because it was unprofitable.
Natchez Railway, LLC, Vice President Michael Van Wagenen said the$700 tariff was necessary to keep the company profitable. He hintedat the possibility of a biomass industry locating to Adams Countyand hopefully using the rails, but right now there are fewcustomers on the line and revenues are less thanexpenditures.
“You have to bring in more money than you spend or you go out ofbusiness. We just can’t afford to give the service away,” VanWagenen said. “We either need to be making money or there’s nosense in us serving (ARI) and losing money.”
The railroad’s affiliation with Utah-based A&K RailroadMaterials, Inc., a railroad salvage company, caused major concernfor Southwest Mississippi lawmakers when it bought the tracks lastyear. Officials are worried the company’s $700 tariff is a steptoward closing and scrapping the railroad, but Van Wagenen deniedsuch a goal.
“We haven’t had any discussions of that nature at this point,” hesaid.
District 92 Rep. Becky Currie, R-Brookhaven – who authored aresolution urging the STB to deny the sale last year – said thetariff is evidence that Natchez Railway, LLC, plans to scrap thetracks next year after a two-year agreement it made to maintain theline expires.
“It’s very apparent to me this company has no intentions of runningthis line past the two years they agreed to. We’ve got one moreyear and they’ll say, ‘Well, we tried, there’s nothing we can do,'”Currie said. “We need this railway line for industries that come toSouthwest Mississippi. Once we lose the rails and lose theeasements, we will never get them back.”