(The following story by Peter Harriman appeared on the Argus Leader website on December 16, 2009.)
SIOUX FALLS, S.D. — A bill making its way through the Senate to reauthorize and reorganize the Surface Transportation Board and give shippers more leverage against railroads could benefit South Dakota farmers, whose grain and ethanol largely leaves the state by rail.
“Now, there is no accountability. We are told by the rail industry what to do, when to do it and how to do it. That raises transportation costs extremely high for us,” said Doug Sombke, president of the South Dakota Farmers Union.
The bill, approved by the Senate Commerce Committee and scheduled for review Thursday, would establish the STB as an independent entity separate from the federal Transportation Department and would charge it with the responsibility to more quickly deal with shippers’ complaints against railroads.
It would also require the STB to investigate potential monoply practices by railroads. These include a variety of costs levied against shippers as well as artificial barriers to competition to Class I railroads by smaller railroads.
“We’ve got to have in South Dakota an advocate out there that is making sure shippers are treated fairly. The STB is notorious for taking forever to get these things adressed,” said Sen. John Thune, ranking member of the Commerce Committee’s surface transportation subcommittee.
Thune held a field hearing in South Dakota in August dealing with issues covered in the bill.
“This bill is a major step in the right direction when it comes to addressing the needs of South Dakota farmers and small shippers in general, and I am happy to have played a role in the legislation’s development,” Thune said.
The nation’s oldest freight transportation trade association, the National Industrial Transportation League, will be closely scrutinizing the legislation to see how well it addresses longstanding shippers’ complaints.
“We have looked at a number of those things in the past, the issue of competitive access, issues regarding bottlenecks, market dominance issues. In terms of the specifics in this legislation, we’re not yet in a position to address it,” said Petyer Gatti, NITL executive vice president.
South Dakota is served by two Class I railroads, the BNSF and the Canadian Pacific Railway. Last year, South Dakota produced 172 million bushels of wheat, 585 million bushels of corn, 138 million bushels of soybeans, and one billion gallons of ethanol.
A large portion of this production was moved using South Dakota’s nearly 2,000 miles of rail line. Over 80 percent of ethanol produced in South Dakota is transported by rail.