Two truck-to-rail intermodal projects aimed at improving agricultural shipping have won conditional approval for $51 million in grant funding from Oregon transportation officials.
The Oregon Transportation Commission unanimously voted July 18 to approve $26 million for one facility in Nyssa focused on onion shipments and $25 million for another facility in Millersburg intended to allow farm exports to bypass highway traffic.
Both projects will still need to meet further conditions, such as nailing down specific costs for freight and establishing a schedule for completion.
A competing proposal for a mid-Willamette Valley intermodal facility in Brooks was unanimously rejected by the commissioners, who cited uncertainties about rail service and zoning.
“We don’t want to be risk-averse but we do want to make a calculated decision,” said Tammy Baney, the commission’s chair.
The intermodal project planned for Nyssa — which would allow Treasure Valley onions to be loaded directly onto railcars instead of trucked to a more distant facility — was briskly approved by the commission.
A third-party economic consultant, the Tioga Group, determined the Treasure Valley proposal demonstrated sufficient railroad commitment, strong support from shippers and a competitive business model.
The rival proposals for the mid-Willamette Valley, on the other hand, did not get a ringing endorsement from the Tioga Group, which found that neither project was able to provide specific quotes for freight prices by rail.
Dan Smith, the consulting company’s principal, also said that both sites face serious economic problems because they would have to undercut trucks on price to compete.
Beating the trucking companies would be difficult because other intermodal facilities in Portland are subsidized by ocean shippers, which offer below-cost rail shipping to maritime ports along the Puget Sound, he said.
There’s no indication that ocean carriers are willing to extend such subsidies to facilities farther south in the Willamette Valley, Smith said. “Neither service is going to be able to compete for significant business volume.”
When considering the Brooks proposal, commissioners said the project didn’t have sufficient railroad backing and may face land use challenges because it’s in an “exclusive farm use” zone. They also said the site is near an already-overloaded highway interchange.
“There’s been more than enough time invested in this, and there’s still a lot of ambiguity,” said Alando Simpson, a commissioner.
Commissioners expressed serious qualms about approving the Millersburg project due to insufficient information about freight rates and uncertain railroad commitment, though they also hesitated to reject the proposal outright.
Commissioner Martin Callery said it’s difficult to secure commitments from railroads unless a project is selected for funding.
“They’re playing their own game, frankly,” he said.
The possibility of postponing the decision and giving a continuance to proponents of the Millersburg site was discussed at length. However, not offering the same option to the Brooks proposal was seen as potentially unfair.
The commission ultimately settled on approving the Millersburg site, though proponents will need to obtain a pledge of rail service at specific prices before the project can proceed. A progress report will be due at the commission’s meeting in September.