(The Associated Press circulated the following article by Dale Wetzel on February 22.)
BISMARCK, N.D. — The Burlington Northern Santa Fe railroad would be unprofitable without levying fuel surcharges on its shippers, and the charge does not cover higher fuel prices, its top executive says.
Matthew Rose, speaking Tuesday at the annual meeting of the Bismarck-Mandan Development Association, also praised Bismarck’s development of a new shipping center, saying it will be important to the railroad’s business and the region’s growth.
“We’re seeing tremendous commerce come from these logistics centers,” Rose said. “We’re seeing employee growth. We’re seeing economic growth, because employees need houses. It has a true spillover effect.”
Rose is chairman, president and chief executive officer of Burlington Northern Santa Fe Corp., the parent company of BNSF Railway. BNSF and the Canadian Pacific Railway are the two largest railroads serving North Dakota.
Some of BNSF’s largest shippers, primarily grain elevators, have raised questions about fuel surcharges the railroad began levying as oil prices rose. The Legislature’s interim Agriculture and Natural Resources Committee is studying the issue.
Rose said that last year, surcharges covered only $1.1 billion of the $1.5 billion in higher fuel costs paid by the railroad. Without the charges, BNSF would not be able to invest in keeping up and expanding its rail network and service, he said.
“You can talk about lots of things, but we are still woefully short in terms of covering our fuel price,” Rose said. “While I know that nobody likes to pay our higher prices at the pump, it is in everybody’s best interests that our industry, our company, covers the fuel issue, because if we can’t … we would not be announcing the type of capital (investment) that we’re doing. We would literally not be making any money.”
Bismarck is developing a shipping center near its airport, called the Northern Plains Commerce Centre. It will be used to pack goods into large containers to be carried by truck, cargo plane or railroad car, a process called intermodal shipping.
Rose said the Northern Plains center will be part of a BNSF “transload” network, that now includes about 130 facilities capable of shipping a variety of commodities.
The Bobcat Co., which manufactures small excavators and loaders, will be using the center to improve its parts inventory management, and to export finished goods. Bobcat, a division of Ingersoll-Rand Co. Ltd., has plants in Bismarck and Gwinner, in southeastern North Dakota.
Richard Pedtke, president of Ingersoll-Rand’s compact vehicle technologies division, told the audience the center will help make Bobcat’s operation more efficient. Pedtke is based in Fargo; his division includes Bobcat loaders and Club Car golf carts.
“We really think that we’re going to enable our future growth … and a very critical part of all of this is the logistics,” Pedtke said.
About 260 people attended the luncheon meeting, which was held on the Bismarck State College campus.