I was reading an article on the UTU’s website about several shippers and state governments complaining about the lack of rail competition in their states. The biggest complainers Idaho, Montana, and The Dakota’s. Now doesn’t that just beat all. They sure did not do much complaining in 1980 when the Milwaukee Road abandon Lines West and left BN Large and in charge. Funny how things come around. Any thoughts guys?
Matt
FutureModal - Is that you?
Who is FutureModal? Never heard of that name before.
What they don’t like is that the railroads are doing pricing like the airlines. You can fly from Atlanta to Washington DC for $228 round trip, but a flight to Asheville NC is $618 round trip. A shorter flight costs the airlines less in fuel and equipment ownership, yet they are “allowed” to charge more.
Montana et. al. are complaining that the RRs are moving grain to the Pacific ports from farther east for less than they charge for Montana grain.
The RRs have a responsibility to their owners to maximize the net revenue on an ongoing basis and this pricing scheme does that.
And on Halloween at that! [(-D]
futuremodal is the name of a former forum poster who liked to discuss, at length, the issue you’ve asked about.
In a nutshell, for the mostpart, the states in question do not have enough population or traffic to support more than one railroad. Because of that, the railroads in those states have found it easier (or neccessary, depending on your viewpoint), to charge higher rates, than in areas with rail competition.
Some, like the shippers, for instance feel, that the railroads should be limited in how much they are able to charge. My recolection, is, that there were provisions in the Staggers Act that did that to some extent. Proving that a railroad is charging too much appears to be difficult and expensive. Others, like the railroads and their stockholders, feel the railroads should be able to charge rates competitive with the competition-trucks.
I live in S.D. Here, there is not much talk of this issue. Montana has lots of talk of the issue, partly due to some politicians up that way making it their issue.
Taking bets Tree?
What are your odds…[:D]
I’am saying 5 replies before he starts…
You should be so Lucky?
Ed, No Bets here!
(come on, you’ve got to have better odds than that.)
This is Halloween, not April Fools?
Easy fellas! The more new posters on the forum, the better. No need to scare off a new poster-just because it’s Halloween. [:P]
Welcome Reading Lines1!. We’re really not that bad of a bunch. Your question brought some old issues up from the dead-so to speak.
Reading Lines 1 , welcome to the forums. Didn’t intend to scare you off - but your question was so dead-on to some of the rather heated discussions we’ve had here on exactly that question, as has been pointed out, that I couldn’t help the dig.
We are a friendly bunch here, although we do have a few who don’t pull any punches - and that’s usually a good thing. It’s a great place to share and learn!
Or that other “defender” of his. [:O]
Do I dare? Well, here goes. Many are crying foul about rail conglamorated mergers which have elmininated the choice of railroad to be used for shipping. Now it is either the railroad in town or truck. Idaho, Montana, North Dakota, et al., have one railroad but several lines. And even the shortlines and regionals are bracketed by BN lines, Thus, shippers have to rely on BN for traffic slots, car supply, and rates. And there are other regions and states in similar situations. This is the reason why some Congressmen are seriously looking at reregulation. Some feel they were betrayed by the railroads because when they supported deregulation they did so with the promise of more competition, not less.
Well, here’s my opinion.
Montana and North Dakota are a long way from anywhere. They represent a huge expanse of land with very little population. People actually try to farm in Montana, although I’m not sure why.
Due to the Montana climate and soil, they basically are limited to growing spring planted wheat. The US produces about twice as much wheat as it uses. There is virtually no domestic demand for Montana wheat, it must be exported through Pacific Coast ports such as Portland/Seattle/Tacoma. The difference between what a Montana farmer gets for his wheat and what it sells for at the export terminal is largely the railroad freight rate.
This only means one thing to a Montana farmer; the railroad charges too much. Whatever they charge, it’s too much. Period. An interesting thing happened after railroad economic deregulation. Montana wheat shifted to rail movement. In the years preceeding deregulation up to 39% of Montana export wheat moved truck/barge over the Snake-Columbia Rivers. Now if the railroad was “gouging” why would the wheat have shifted from barge to rail? It’s nonsense. But this does not matter to a Montana farmer, in his/her mind the railroad charges too much.
This dispute has been going on since before deregulation. Some Montana farmers actually tried to file a class action suit against the BN in 1980 over the rates. The case w
You’ve got some fast growing beans in IL. Here in IN, they leave the field fallow after harvesting winter wheat in July/Aug.
I don’t think it’s the beans, I think it’s the wheat.
IIRC the winter wheat in central Illinois is harvested earlier than July/August. I’ll check for sure next time I’m down there. I know I was talking to the farmer who was best man at my wedding (Why didn’t he stop me?) and he flat out told me “Our best beans are behind our wheat.”
Edit with more information:
Here’s a link that discusses double cropping wheat and soybeans in Illinois.
http://www.illinoiswheat.org/about_il_wheat.html
The area I’m from is about 40-50 miles north of Springfield, but they’re aparently able to do the double crop thing that far north. I don’t recall it from my long gone youth, but then the farmers didn’t brief me on their business plans. Things change.
All I remember is the summer jobs pulling the straw bales out of the balers and stacking them on the racks for $1.00/hour.
Further Edit:
The farm field about 1/4 mile north of me has rotated corn/soybeans since I moved here. This fall the farmer has wheat in it. I now live about 3 miles south of Wisconsin and it will be interesting to see if they try to double crop this far north in Illinois.
I am not this futuremodal that you all accuse me of, I don’t even know the chap. I was just trying to get a little talk about Milwaukee Road’s Line West going. I guess this forum is no different than the Eastern Ohio & Regionals message board and others that people ruined. I think I will be leaving now.
Matt Fisher
Ease up there Matt…
No one was accusing you of anything…simply the original post sounded a lot like FMs leading postings, where he would ask an innocnet question, then pick an argiument, simply to argue.
And no, this forum is not like any other…it is quite diverse, has people from all over, not only the US, but everywhere on all continents.
But the Montana and SD grain gripe is a pretty sore question here…it has been cussed and discussed to death in more threads than I can count.
Stick around a little, read some of the other posts, ask a few more questions before you get out of town…
ok
.
Rather sensitive fellow, wasn’t he. I thought it was interesting that the forum he mentioned as going south on him was nowhere near Montana or South Dakota. One thing I don’t understand is how people think they’re going to more or less resurrect the railroads of the past, whether there’s sufficient business or not.
One interesting thing in that regard happened here in South Dakota AND there was a small article in Trains about it a couple of months back.
South Dakota bought up all of the Milwaukee Road track that was left in 1980, and BNSF leased what they wanted and the rest went to shortline operators. The largest shortline, Dakota Southern, leased the Mitchell to Kadoka line to service the elevators on the route. The only connection to the outside world DS has is with BNSF at Mitchell. A few years ago BNSF jacked up the freight rates to the point where it was cheaper for the elevators along DS to TRUCK their grain north to the DM&E.
Then BNSF wanted to BUY the tracks they’d been leasing for over 25 years. One of the provisions of the sale stipulated by the state of South Dakota was that Dakota Southern would get trackage rights on the BNSF from Mitchell to Sioux City. In Sioux City there are THREE railroads to compete for DS’s business (I believe UP and CP or CN). Now that DS can get better shipping rates, grain trains will resume on DS in 2009.
Actually those shippers and states did complain bitterly about the abandonment of the Milwaukee Road in 1980, and the loss of competitive rail service they thought would result.effect
Today, shippers such as North Dakota and Montana grain producers argue they should pay mileage-based transportation rates that are proportional to the transportation rates paid by Minnesota and grain producers. In other words, if you took the rate paid by a Minnesota farmer and divided it by the mileage to the market, rate/mileage = x, the per-mile rate paid by a Montana farmer to the same market is not x but something like 1.2x. The counterargument by the railroad is (1) that it is discounting its rate to the Minnesota farmer in order to compete with truck-barge combinations, increase its volume overall, and achieve economies of scale that benefit all shippers, and (2) the farmer in Minnesota is more advantageously located and thus its land rental is commensurately higher, too.
If the rates were regulated to require the railroad to make all rates proportional mileage-based and we then all agreed to be scrupulously hands-off on the system to see what happened (an interesting experiment the public has never had the stomach to take to a conclusion, for obvious reasons), the net result would be an end in railroad service to all farmers. In the specific case, the railroad would have to choose to make either the Montana farm the basis, or the Minnesota farm the basis. If the Minnesota farm’s rates became the basis the the railroad’s volume would still be the same but not its income. The rates would fall to the Montana farmer, the railroad’s net return would decrease, the railroad would be able to invest less in its physical plant and equipment, and eventually railroad service would end to all shippers. Because the Montana farmer would still be farthest away from market their service would suffer first (lack of equipment, longer cycle times on equipment, longer tra