GREAT FALLS, Mont. — Canadian Pacific Railway executives told state officials this week that they would like to haul Montana grain to the West Coast, breaking Burlington Northern Santa Fe’s lock on the state’s rail service, the Great Falls Tribune reports.
The move could offer choice and lower rail rates to Montana farmers, who pay more to ship their crops to West Coast markets than their competitors farther east. In general, Canadian rates are 20 percent lower than rates in the United States, industry watchers say.
“The BN is aggressively acting as a monopoly, and we need to strive for any of these competitive options,” said Terry Whiteside, a Billings transportation consultant and loud advocate of rail competition. Shipping by Canadian rail would be practical for Montana farmers, he said.
“Canadian Pacific is a very competent railroad,” Whiteside said. “It’s a grain-hauling railroad in Canada. It understands how to handle grain and it also understands how to make these market invasions that provide competition for our producers.”
CP officials met with Gov. Judy Martz Wednesday in a follow-up meeting to a visit to Canada earlier this year by the state agriculture, transportation and commerce directors.
“The governor seems to be enthusiastic about solving some of the transportation problems in this state,” said Jim Christianson, executive director of the Montana Wheat and Barley Committee.
Montana producers could save money on the Canadian rails, even after extra trucking, storage and transfer costs are factored in, Christianson said.
Farmers would truck their grain through the Sweet Grass border crossing and load it onto CP’s line just north of the border. The Canadian railroad does not have access to BNSF tracks in Montana.
Specific logistics and pricing have not been determined, said Ron Zellar, spokesman with the Montana Department of Agriculture.
“We’re going to continue to supply (CP) with potential numbers,” Zellar said. “It has to make economic sense for them as well.”
State officials also said they would work with Canadian officials to remove barriers to grain movement.
With BNSF, Montana producers are paying 30 percent more than they would if the state had railroad competition, Whiteside estimates.
“It’s not just grain,” he added. “We’re a lumber, mining and agriculture state. All of those require us to move our commodities somewhere else to have value, and they’re all bulk.”
State Agriculture Director Ralph Peck returned to Montana this week from meetings with BNSF officials in Forth Worth, Texas. He discussed rate structures that give discounts to shippers in Minnesota and eastern North Dakota, but no solutions were offered.
“We had a good exchange of ideas,” Peck said in the statement. “We will continue to aggressively pursue any options that will reduce the economic disadvantage current rates place on the grain industry in this state.”
Montana U.S. Sens. Max Baucus, a Democrat, and Conrad Burns, a Republican, teamed up last month with Sen. Larry Craig, R-Idaho, on a bill to introduce rail competition.