eNews • November 1, 2013
Promoting a Cost-Effective, Reliable and Competitive Transportation System

Farmers complain about possible Canadian Pacific track sale

A number of South Dakota farmers recently wrote letters to the Surface Transportation Board complaining about Canadian Pacific’s (CP) possible sale or lease of 660 miles of its mainline track running west from Tracy, Minn.

CP acquired the 660-mile section of track, which runs west through South Dakota, Nebraska and Wyoming, in its October 2008 purchase of Dakota, Minnesota & Eastern Railroad. According to reports, it had pledged to invest $300 million in upgrades to the track, which serves grain, ethanol and clay shippers. In August, South Dakota governor Dennis Daugaard asked the STB to see if these promises had been met.

“I am asking the Surface Transportation Board to determine whether or not the Canadian Pacific has met its obligations to the people of South Dakota,” Gov. Daugaard said in August. “This examination is imperative because past support for the Canadian Pacific’s purchase was based chiefly on promises it made to the STB.”

Gov. Daugaard added that even if a new buyer comes along, CP's sale of only part of the track means "the new buyer of the line would have limited or no opportunity to ship cargo beyond Tracy unless the cargo is shipped using the CP."

The railroad started looking into strategic options for the track in December. E. Hunter Harrison, CP’s chief executive officer, said at the time that the line “would be an attractive and highly viable opportunity for a low-cost operator. There is a strong long-term franchise here for an operator willing to maintain high-quality service and explore growth opportunities with existing and future customers.”

The farmers are writing in support of the South Dakota Department of Transportation’s “Petition to Enforce Canadian Pacific Railway’s Investment Representations.” Addressed to the STB’s Cynthia T. Brown, the separate form letters are signed by individual farmers and the South Dakota Farmers Union.

These shippers say stopping service on the line would overload rural roads with trucks and wreck havoc on commodity prices because they would have to pay more to get their goods to a rail line.

The farmers argue that Canadian Pacific only received support for the purchase because of promises to upgrade DM&E to Class-I standards. The farmers were surprised that CP would “then allow that same line to fall into disrepair and ultimately curtail and effectively terminate service at our expense," they said.

"If CP is not required to live up to its promises concerning capital investments and safety and service improvements, the DM&E railroad line in South Dakota will become non- competitive,” one farmer wrote. “The result would be catastrophic to me, my local community and the state.”

Source: American Shipper

The Soy Transportation Coalition is comprised of thirteen state soybean boards, the American Soybean Association, and the United Soybean Board. The National Grain and Feed Association and the National Oilseed Processors Association serve as ex-officio members of the organization.

Soy Transportation Coalition
1255 SW Prairie Trail Pkwy., Ankeny, Iowa 50023
Phone: (515) 727-0665 Fax (515) 251-8657
Email msteenhoek@soytransportation.org
Web www.soytransportation.org

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