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Date Posted: 08:14:18 08/03/05 Wed
Author: Chuck in ND
Subject: This really steams me
In the last few years, BNSF (Burlington Northern Santa Fe railroad co) has been telling small-town elevators they will pay huge outrageous prices unless they update to be able to handle 52-car loads. They told some towns they would lose service alltogether unless they upgraded. I think last year was the deadline BNSF set for them to upgrade or else. So these little towns, that are barely surviving spent thousands of dollars to upgrade to 52-car capability.
Now BNSF comes along and says they are going to discontinue the 52-care price. Elevators either have to have 110 cars or they pay the outrageous 26-car price.
Now I don't think that any business should be getting our tax money. But the railroads are heavily subsidized. Their actions are destroying small towns and driving farmers out of business. I think our Senator should be doing more than sending a letter of rebuke to the RR--he should be telling them they will lose federal subsidies if they continue their draconian business practices.
I know Steve Strege from political work (referred to in the article). In his list of Evil Men, First is Hitler, then BNSF Execs, followed by Stalin, Mao and Clinton. :D I can understand why.
I know, I know, when compared to thousands starving in Africa, wars and rumours of wars and pandemic AIDs, this is pretty trivial. But still, it really bugs me.
BNSF changing rates
By Jeff Zent, The Forum
Published Tuesday, August 02, 2005
Just as North Dakota's grain dealers ready for this year's crops, they're bracing for higher railroad shipping costs.
BNSF, the state's largest railroad, is phasing out a shipping rate for 52-car trains.
All but the state's largest elevators will be left with a 26-car shipping rate of about 6 cents more per bushel, Public Service Commissioner Tony Clark said.
The rate changes are expected to be finalized by Aug. 15, Clark said.
BNSF's pricing strategy puts the state's smaller elevators at an even greater competitive disadvantage against large "shuttle elevators" that pay lower rates for loading 110-car trains, said Steve Strege, executive vice president of the North Dakota Grain Dealers Association.
The railroad "is favoring 110-car elevators because they are simply the most efficient method for transporting grain," BNSF spokesman Gus Melonas said.
BNSF is eliminating 52-car trains because exporters want 110-car shipments, while processors prefer 26-car shipments, he said.
The railroad's rate strategies hurt rural North Dakota, said Sen. Byron Dorgan, D-N.D.
"The result of it is those in North Dakota that are the most vulnerable, small communities and small elevators, will be hit the hardest," he said.
Many of the state's elevators, at the request of BNSF, made costly upgrades over the years so they could load 52-car trains, Strege said.
Clark said those same elevators are now "having the rug pulled out from under them."
To ship one 3,400-bushel railcar loaded with wheat or other crops, grain dealers will pay about $200 more.
"This is not chump change when you're loading a lot of cars," Clark said. "That is money that comes out of farmers' pockets because it gets passed along."
In a letter dated July 26, Sen. Kent Conrad, D-N.D., urged BNSF President Matt Rose to reconsider eliminating the company's 52-car rate.
"At a time when our farmers continue to suffer from adverse weather and unfair foreign competition, they do not need other changes that result in a hit to farm income," Conrad said.
Hunter Grain Co. invested in the nearby Alton Grain terminal, a large shuttle elevator near Hillsboro, N.D., to benefit from better service and lower shipping rates, said Paul Skarnagel, Hunter Grain's manager.
"You could see this coming," Skarnagel said. "The railroad wants to load large shipments on the main line."
Readers can reach Forum reporter Jeff Zent at (701) 241-5526
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