(The following story by Jennifer McKee appeared at MontanaForum.com on December 18.)
HELENA, Mont. — Calling an imminent increase in rail shipping rates “a cause for great concern,” Gov. Judy Martz asked the head of Montana?s principal railroad to reconsider a rate jump expected to cost state farmers $5 million or more.
In a letter dated Dec. 16, Martz told Burlington Northern Santa Fe railroad chief Matthew Rose that the railroad’s rate increase comes at a curious time given that grain elevator operators across the region have complained of the company’s poor service.
Montana farmers “already pay the highest shipping costs in the nation,” Martz wrote. “On behalf of Montana?s grain producers, I urge you to reconsider this decision.”
Martz also asked Rose to rethink a 2.5 percent fuel surcharge on grain shipments from Montana to the Pacific Northwest.
Rose had not yet received the letter on Wednesday, said Gus Melonas, a BNSF company spokesman.
BNSF ships about three-quarters of the state’s grain, most of it bound to sea ports in Portland, Ore., and on to Montana’s largest grain markets in Asia, said Jim Christianson, executive vice-president of the Montana Wheat and Barley Committee. That comes to about 80 million bushels of grain, he said.
BNSF announced this week it was canceling a two-year-old rate reduction on Dec. 31, which will result in an additional six-cent-per-bushel rate increase, a cost that is ultimately paid by the farmer. Rates are also expected to go up in North Dakota.
Christianson said he estimates the increase will cost around $5 million, although it could be higher.
“We pay some of the highest shipping rates in the world,” he said. “Only one other place in South Africa has higher shipping rates.”
Christianson said the high rates and poor service of BNSF stems from the fact that the company has no competition in most parts of the state.
In her letter, Martz said the rate hike “simply increases the incentive to press for national legislation to assure meaningful competition in rail shipping.”
There are currently two bills brewing in Congress to address rail competition. Montana’s entire congressional delegation supports both of them.
Martz, along with State Agriculture Director Ralph Peck, also support the bill.
“We feel legislation is the only salvation,” Christianson said.