BNSF has agreed to reduce shipping rates in Montana. The new rate will affect producers in four states: Montana, Minnesota and the Dakotas. The other states will wait until Jan. 1 to see the savings. "Montana's rate will go down right now," Schweitzer said. BNSF states that their rates will be adjusted as part of a temporary change in the fuel surcharge calculation on grain shipments. The rates cuts will result in a savings of 3 to 4 cents per bushel, for a statewide savings of $5 to $6 million per year. The Montana Grain Growers Association calls the agreement an important first step, but notes that Montana farmers pay an estimated $60 million more for transportation than in states with competition. "They've got a long way to go to make it comparable to other states that have competition," Richard Owen stated in an April 14th Tribune article.
BNSF hauls about 80 percent of the state's export grain and charges a higher rate than it does in states with more competitive shipping alternatives for grain headed to the Northwest, according to a 2004 legislative report on Montana freight competition. The discrepancy costs Montana growers about $60 million a year, the report said.
Pressure has been mounting for BNSF to reduce freight costs, including a bill in the Legislature that would increase the company's property tax in accordance with the shipping discrepancy with other states. The sponsor of the rail-tax bill, Rep. Bob Bergren, D-Havre, has succeeded in moving the legislation through the House Agriculture Committee and through the House. The bill now awaits action by the Senate Taxation Committee.
On the Federal level, new legislation was introduced in late April by Senators Conrad Burns (R-Mont.), Jay Rockefeller (D-W.Va.) and Byron Dorgan (D-N.D.) as a way to "combat monopolistic practices faced by agriculture producers and manufacturers who ship their product via rail. According to a joint statement issued by the three, the proposal would direct the Surface Transportation Board to ensure effective competition among rail carriers at origins and destinations; maintain reasonable rates in the absence of effective competition; and maintain consistent and efficient rail transportation service for rail shippers, including the timely provision of cars. In addition, the legislation also would increase by ten-fold the availability of federal funds for railroad infrastructure investment. "Insufficient investment into rail infrastructure results in capacity and service problems that worsen already difficult conditions," state the senators.