(The following article by Mike Dennison was posted on the Great Falls Tribune website on August 5.)
HELENA, Mont. — BNSF Railway said Thursday it will reduce a planned increase in grain-shipping rates at 52-car grain elevators, which are critical to many Montana ag towns.
But state leaders said the railroad’s concession is minimal, and that the rate increase still threatens to shut down the 52-car loading terminals.
“It’s better than what we had yesterday, but we still do not have a rate that would help to ensure viability of the 52-car facilities,” said Richard Owen, executive vice president of the Montana Grain Growers Association.
Owen, Gov. Brian Schweitzer and Sen. Conrad Burns, R-Mont., said they’ll continue to pressure the railroad to set the 52-car shipping rates at a level that is affordable and fair.
“There’s much remaining to be done, as I’d like to see Burlington go back to their old pricing structure, because it’s imperative that we keep these smaller elevators operating, and they just can’t handle a 110-car train,” Burns said in a statement.
Schweitzer said even if BNSF further adjusts the 52-car rates, it’s still using its monopoly status to overcharge Montana farmers for shipping grain to Portland, Ore., for export.
“I’m going to keep pushing them, saying we’re very happy to pay our fair share of the operation of this railroad,” he said. “That would mean that we’d pay the same price per bushel, per mile, that farmers pay (in the Midwest).
“It’s way out of whack right now.”
The immediate controversy is over BNSF’s rates for grain shipped at 52-car elevators in Montana, versus what it charges for grain shipped at 110-car “shuttle” terminals.
The railroad wants to move more grain traffic to the 110-car loading terminals, and announced in June it would lower the per-car rate for shipping on these longer trains.
At the same time, BNSF said it would increase the rates for grain shipped from 52-car elevators, effective this month.
Montana farmers and political leaders said the higher rate would kill the state’s three dozen 52-car terminals, which serve towns like Fort Benton, Big Sandy, Cut Bank and Chester.
Their demise would mean higher costs for farmers and more wear and tear on state roads, since farmers would have to truck grain to the several 110-car loading facilities, Schweitzer said.
The initial rate change would have made 52-car rates about 15 cents per bushel higher than the 110-car rates.
Schweitzer and others said 52-car rates this spring were only 4 cents to 7 cents per bushel higher. Every penny-per-bushel more on the 52-car rates costs Montana farmers $500,000 to $700,000 a year in shipping costs, based on current production.
On Thursday, BNSF said it would set the 52-car rates at about 14 cents per bushel above the 110-car rates, as of Aug. 18.
However, railroad officials insisted the new rates are not that much different from rates charged earlier this spring.
Gus Melonas, a BNSF spokesman in Seattle, also said the railroad’s overall grain-shipping rates from Montana have not increased faster than general inflation.
“Since 1981, Montana rail rates have increased at a lower pace than the vast majority … of all Montana farm production items, services and family living expenses,” he said.
BNSF Chief Executive Officer Matthew Rose sent a letter to Schweitzer dated Wednesday, announcing the new rates.
“I hope you will agree that BNSF continues to proactively respond to the transportation needs of Montana farmers to support their infrastructure investments,” he wrote. “Together, we are providing better service and prices for Montana farmers to meet the growing export market demand.”
Schweitzer said BNSF has made no convincing arguments about why its grain rates for Montana farmers are higher than those paid in the Midwest, and that he’ll continue to pressure the company for more rate changes.
“My job is to represent the interests of small businesses and farmers in Montana,” he said. “My job is not to represent the interests of a corporation in Forth Worth, Texas.”
Owen said BNSF is responding to pressure from farmers, the governor and Sen. Burns, and that they should keep the public heat on the railroad.
Burns said he plans to continue to pursue a bill that would create a new arbitration board to settle disputes over rates charges to “captive shippers,” such as those in Montana.
“Our producers should not be penalized for living in Montana, and BNSF needs to level the playing field,” Burns said.