CHICAGO — A battle is heating up in North Dakota over the rates that the Burlington Northern Santa Fe Railway charges to haul wheat, the state’s top crop, reports a wire service.
North Dakota Gov. John Hoeven is scheduled to meet with BNSF executives on Thursday to discuss the railroad’s rate structure, which provides discounts for a few of the state’s largest grain elevators.
“BNSF needs to change its pricing methods in a way that is fair to all of our grain elevators,” Hoeven said in a statement issued last week.
Critics have said the railroad’s rate structure, introduced last July, unfairly favors elevators large enough to load 110-car “shuttle” trains, at the expense of smaller, more rural facilities. Most of the state’s grain elevators, including 190 located along BNSF lines, can handle a maximum of 54 cars.
Last fall, the North Dakota Grain Dealers Association formed a coalition, the Alliance to Keep Rural America on Track, to fight the railroad’s pricing scheme. This month the group launched a campaign of radio and newspaper advertisements to spread its message.
“People have responded to that by contacting BN and the congressional delegation and the governor to rally their support,” said Steve Strege, executive vice president of the grain dealers’ group and a leader of the coalition.
Stevan Bobb, BNSF’s group vice president of agricultural products, said there was no evidence that the pricing system was driving North Dakota grain elevators out of business. He said BNSF’s rate system helps the railroad provide more choices for its shippers.
“Our rates are a function of the product the shipper chooses to purchase. The more efficient of a product the grain shipper uses, the lower the rate, because we share those economics savings with them. It’s just like if you buy something in bulk, you probably pay less for it than if you buy one item at a time,” he said.
Bobb said he saw the meeting with the governor as a chance to exchange information on the pricing issue.
“We’d like to share our perspective and share some of the data and the facts behind our business decisions, as well as hear what the governor has to say,” Bobb said.
Lance Gaebe, an agricultural policy advisor to Hoeven, said the governor wants to work with the railroad on the issue.
“Our policy isn’t to hammer on these guys, but to get this thing resolved,” Gaebe said. “The publicity isn’t any fun for them.”