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Rising rail rates irk growers

Railroad criticized for announcing rates after grain group conventions


Capital Press

A transportation consultant says the Burlington Northern Santa Fe Railway's new rates in the Pacific Northwest are the highest in the company's history.

Terry Whiteside, principal for Whiteside and Associates in Billings, Mont., says the rates are now roughly $3,600 for shuttle cars and $3,800 for nonshuttle cars. The base rates went up by $90 per car on 52-car or 48-car trains and by $99 per car on 110-car trains. That translates into an increase of 2.7 cents per bushel, Whiteside said.

Many pulse crops, barley, wheat and fertilizers move with less-than-shuttle rates, Whiteside said.

In shuttle trains, an elevator ships a minimum of 110 carloads, loading shipments in 24 hours or less. Shuttles have the lowest rates because of large shipments and quick turnarounds, Whiteside said.

Nonshuttle shipments are of varying car sizes.

Regarding Whiteside's claim that the rates are highest in history, Steve Forsberg, spokesman for the company, said that he didn't know if that was the case.

The company raises its rates on an annual basis, around the first of the year, Forsberg said.

Whiteside criticized the company for announcing the rates after the grain commodity group conventions concluded. The company usually gives a month's lead time, he said, but announced rate increases Dec. 11 and Dec. 18, he said.

"It's really important that the grain industry know about a month ahead of time," he said. "It doesn't become a discussion (at conventions) if you haven't published them. I don't know that that was the exact reason, but the timing was interesting."

With grain prices relatively high, Whiteside said he often hears the increased rates aren't having much of an impact.

"The railroads are showing some of the highest revenue they ever have in grain during one of the worst recessions we've ever had," he said. "It's going to matter in a big way when the price of wheat comes back to more normal levels."

Forsberg said Whiteside is a longtime critic of the company's actions in the grain business.

Whiteside publishes analyses to give farmers information about freight rates when they sell their wheat. Grain elevators subtract transportation costs from the price of grain paid to farmers, he said.


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