The announcement that BNSF Railway is dropping rate incentives for 48-car shipments has caused discussion in affected parts of the state.
The Montana Farm Bureau Federation (MFBF) worked with BNSF and other interested parties in 2005 to keep the freight rate incentives for 52-car shipment from Montana (later changed to 48 cars) until the state had developed a 110-car elevator infrastructure.
“That was eight years ago the railroad agreed not to decrease the incentives for smaller train shipments in Montana and western North Dakota,” notes MFBF Executive Vice President Jake Cummins. “At that time our organizations informally mediated a hold on this action for 52-car shipments from Montana, citing our unique geography with areas of grain production separated by grazing areas.
"We maintained at that time that we did not have the 110-car elevator infrastructure to remain competitive with other grain producing states. BNSF agreed to keep those incentives until we developed a 110-car elevator infrastructure only for Montana,’
BNSF has agreed to soften the transition away from 48-car rates, allowing incentives for elevators if they can coordinate their 48-car unit with the loading of another 48-car unit in their general area so that BNSF can pair the two up to make a train.”
There are three combination zones that have been provided where elevators could still use 48-car trains and receive incentive rates. The new 48-car combo rate is an incentive over singles of $450, and $400 better than 24-car shipments.
Cummins notes that some MFBF members have expressed concern about the transition, as two or three locations may not be able to support the building of a shuttle, and grain farmers will need to ship their grain further to other elevators.
“However, from what we understand, BNSF does not plan to stop service to elevators wanting to ship smaller numbers of cars,” Cummins said. “Montana Farm Bureau will continue to work with BNSF to reach an agreement which keeps our grain and our freight rates in Montana competitive with neighboring states, Canada, and the world.”