Montreal, Maine & Atlantic Railway Trims Service, Personnel

Forest products downturn, floods prompt cutbacks BANGOR, Maine, July 3


BANGOR, Maine, July 3 /PRNewswire/ -- Montreal, Maine & Atlantic Railway
said today that it has trimmed its train service and furloughed 33 employees
at the end of June.


"The current economy has caused a downturn in paper, lumber and other
forest products shipments which, along with extraordinary snow removal and
spring flooding expenses, have forced us to make adjustments to keep the
railroad operating efficiently and still provide reliable service to our
customers," said Bob Grindrod, MMA's president. In addition, Katahdin Paper
said it plans to close its Millinocket, Maine mill (one of two operated by the
company) on July 28. "Paper from the Millinocket mill and inbound raw
materials account for about 12 per cent of our carloadings," Grindrod said.


Cutbacks include reducing service from six to five days a week on the main
line between Millinocket, Maine and Montreal. Trains on most other main and
secondary lines will operate three days a week.


Layoffs will primarily affect operations, mechanical and engineering
forces, Grindrod said.


Belt tightening is nothing new to the MMA, which coped with an even larger
downturn in 2003 when its largest customer, Great Northern Paper (now Katahdin
Paper), closed both its Millinocket and East Millinocket mills and filed for
bankruptcy.


Paper and forest products generate about 60 percent of MMA's volume. MMA
handles about 40,000 freight shipments annually and serves approximately 300
customers in Maine, Vermont, Quebec and New Brunswick.


"Because railroads are more efficient and use only one-third the fuel
required by trucks, it makes sense for customers to switch to rail service,"
said Grindrod. "We can cut transportation costs significantly. For example,
shipping a ton of paper from Maine to Nevada by rail is one-third the cost of
truck."


In an effort to gain new customers, MMA has launched an international
initiative to increase shipments via Searsport, Maine. "The Mack Point
Terminal is one-to-three days shorter sailing time between Europe and large
East Coast ports," notes Grindrod. "It's also less congested and we have
larger clearances for oversized shipments."


Since operations began in 2003, MMA has handled about 250,000 shipments
while taking an estimated 700,000 trucks off U.S. and provincial highways. "In
addition to reducing pollution and saving energy, MMA rail service has reduced
road repairs and expense to taxpayers," Grindrod added.



SOURCE  Montreal, Maine & Atlantic Railway