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Published July 21, 2014, 10:22 AM

BNSF deal sets Verona, ND, plan

Burlington Northern Santa Fe Railway and the Red River Valley & Western railroads have come to an agreement on shuttle train rates for Verona, N.D., to all export ports.

By: Mikkel Pates, Agweek

VERONA, N.D. — Burlington Northern Santa Fe Railway and the Red River Valley & Western railroads have come to an agreement on shuttle train rates for Verona, N.D., to all export ports. The deal allows the James Valley Grain cooperative, based in Oakes, N.D., to move forward on a $25 million to $30 million elevator procect in Verona.

Eric Larson, manager of the cooperative, says the new site will serve about 400 customers and will be a “win, win, win” for everybody — the co-op customers, the railroads themselves, and the citizens of North Dakota who otherwise would pay for wear-and-tear on highways. The new elevator will be able to store 3 million bushels of grain. It will be able to load a shuttle train in about eight hours and is expected to handle some 20 million bushels per year.

The deal had the support of both Sens. Heidi Heitkamp, D-N.D., and John Hoeven, R-N.D., Larson says.

He says James Valley has been trying in vain for more than two and a half years to construct a new shuttle-train loader at in Verona, where the elevator tore down a smaller, inefficient elevator in 2013. The company has already invested about $4 million in land and other improvements, but ran into an unexpected roadblock when BNSF declined to quote a so-called through-rate or tariff rate. A through-rate is a single transportation rate on an “interline” haul involving two or more separately established rates.

Breaking the jam

The exact amount of the rate hasn’t been set, but the parties are comfortable enough to go forward with construction on Oct. 1. The company has been completing dirt work and a permit application, but had to let construction contractors go last October and November, when the elevator planned to start construction. Larson says the construction delays might add up to 6 percent to the cost.

Larson emphasizes that John Miller, BNSF Railway agricultural group vice president, was good to work with, once the decision was made. Larson declines to speculate on what exactly broke the logjam, except to say it was media interest that led to attorney Peter Pfohl in Washington, D.C., filing a case before the U.S. Surface Transportation Board.

Pfohl notes that the deal involved improvement of an east-west track that goes through Verona, to allow more efficient shuttle movements. Without the improvement, trains would go to the south and east before coming north and heading west to the Pacific Northwest.

Separately, Larson says the railroads have been under intense pressure by the STB because of backlogs on grain shipments this past winter.

Dan Zink, president of the RRVW, says his company has a 27-year “history of partnership with BNSF in growing our customers’ business in nearly 50 North Dakota and Minnesota communities.”

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