News Release
BNSF Responds To Meetings With Governor Martz by Discontinuing Differential Pricing
7/16/2002
Meta Boyer
406-444-5665
meboyer@state.mt.us
"I am pleased that BNSF has responded to our requests by dropping their differential pricing strategy," said Governor Martz. "This is a good first step for our producers, but it's only step one. I commit that we will continue to work on behalf of Montana agriculture for equitable freight rates."
In a letter to Governor Martz, BNSF President Matt Rose said, "effective July 31, the Burlington Northern and Santa Fe Railway Company (BNSF) will discontinue the North Dakota-Montana differential pricing structure."
Differential pricing provided a reduced rate for producers in some areas east of Minot, North Dakota in an effort to redirect grain to Portland grain that normally moves to the Minneapolis market. Montana grain typically is marketed through Portland.
In effect, the inverse rate structure lowered the quality of grain received at the West Coast by the inevitable blending of high quality Montana wheat with lower quality wheat from east of Minot. Meanwhile, Montana producers continued to pay the highest transportation fees in the United States.
"While this is great news for Montana producers, we must continue to fight for competitive freight rates," said Director Ralph Peck of the Montana Department of Agriculture. "Our producers simply must be competitive in the marketplace, and freight rates are a key part of that competition."
In addition to the differential pricing announcement, BNSF President Matt Rose also announced in his letter to Governor Martz that, "further, in response to concerns you have raised with me regarding BNSF's current demurrage charges, I am pleased to announce that, effective August 1, BNSF will reduce its demurrage for covered hoppers in grain service to $50 per chargeable day from the recently announced $75. In addition, BNSF will allow 26-car and 52-car unit grain trains that are spotted for loading on Thursday or Friday to have Saturday as free time, in line with our recently announced changes for single cars."
"While we appreciate this reduction, the rate of $50 is still above the off-season rates of $25 for covered hoppers in grain service," said Director Peck. "We hope that BNSF will continue this trend toward more competitive grain rates."
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