BANGOR -- 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% of our total business," 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.