|WASHINGTON D.C. — Rail transportation rates can vary significantly among commodities, presenting a major challenge to grain shippers while raising questions about equity in rail shipments. That is why Farm Bureau is urging the Surface Transportation Board to make grain shipments fairer and more affordable.
Farm Bureau is basing its recommendations on a report issued by the Government Accountability Office regarding rates, competition and capacity issues in the American rail freight industry.
According to Farm Bureau, one of the most alarming components of the report putting U.S. farmers at a distinct disadvantage was the fact rail rates have not declined uniformly. Specifically, from 1985 through 2004, coal rates declined 35 percent while grain rates increased 9 percent.
“The report, along with multiple interviews with experts in this field is alarming,” said AFBF President Bob Stallman. “The report confirms the many concerns that U.S. agriculture has been raising for years. AFBF wants to see more done to make rail transportation fair to all commodities, including agriculture. It is imperative to afford smaller shippers the opportunity to challenge excessive freight rates.”
In order to equalize rail transportation for all commodities, AFBF said STB take action on this issue at a public hearing on Nov. 2.
Aside from urging STB to take note of the recent GAO report and respond accordingly, AFBF, provided recommendations for improving shipping goods by rail for farmers.
First, AFBF is encouraging STB to re-propose its “Simplified Stan-dards for Rail Rate Cases,” in accordance with comments submitted by the agricultural community. In doing so, smaller agricultural shippers would have the opportunity to challenge excessive freight rates, instead of simply enduring them. In addition, AFBF believes it is a must to improve reporting, tracking and transparency of any charge above the freight rate, to ensure that any surcharge corresponds directly to permissible levels. AFBF also affirmed the need for improved competition.
“It is critical for grain shippers to get a fair shake. Grain rates have increased making it tough on farmers while others have seen their rates go down,” said Stallman. “It just doesn’t add up.”
This farm news was published in the Nov. 8, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.