Founding
The Portland & Western's roots are in sister company Willamette and Pacific Railroad, founded in 1993. This company was created to take over operations on many branchlines of the Southern Pacific, a class one railroad. These branches included the Toledo Branch from Albany to Toledo and the Westside Branch from Monroe to St. Joseph (near McMinnville), plus the Bailey Branch west from Monroe to a sawmill, the Dallas Branch from Gerlinger to Dallas, the Willamina Branch from Whiteson (near Amity) to Willamina, and the southern portion of the Newberg Branch from St. Joseph to Springbrook (north of Newberg). Lumber products and paper were the predominate commodity on these branches, along with some agricultural products from various shippers. The Cascade Steel Rolling Mill in McMinnville was an important shipper as well, and propane shipments were handled to several distributors.
PNWR was created in 1995 to take over operations of the remainder of the SP's branchlines in the state consisting of the former Southern Pacific Tillamook Branch between Willsburg Junction (near Milwaukie) and Hillsboro, the Westside-Seghers Branch from Hillsboro to Seghers (near Gaston), and the remaining segment of the Newberg Branch between Cook (near Tualatin) and Springbrook (near Newberg), connecting to the existing Willamette & Pacific network to McMinnville and Corvallis. The W&P had trackage rights on the Newberg Branch and the portion of the Tillamook Branch between Cook and Willsburg Junction, along with trackage rights on a short portion of SP's mainline to Brooklyn Yard to facilitate interchange with SP, however in the year prior to the P&W's formation the W&P had been interchanging with SP exclusively through the Eugene Yard gateway.
Shortly after startup in fall of 1995, class one railroad Burlington Northern "spun off" part of its Oregon Electric Railway branchlines north of Salem to the new carrier.
According to former WPRR/PNWR General Manager Robert I. Melbo, the Portland & Western was created to take over the new lines, rather than just extending the WPRR, due to regulatory issues then in force.
Most of the former SP branches are operated via a lease agreement, which in the wake of the 1996 Union Pacific-Southern Pacific merger, are now held by UP. The operations on the former BN branches are mixed between leases and outright ownership.
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