South Dakota Elevators Concerned About CP Plans to Sell Rail Line
Date Posted: August 29, 2013
This article is reprinted from the USDA's Aug. 29 Grain Transportation Report.
Since Canadian Pacific (CP) announced plans to sell the portion of the rail line it acquired from the former Dakota, Minnesota & Eastern Railroad (DM&E) west of Tracy, MN, elevators on the line have been concerned about the future of their rail service.
This is the only east-west rail line crossing the State, providing the only rail access to many grain shippers in the middle part of the State.
By keeping the entire former DM&E line intact during a sale, as some proponents hope, the entire route has access to large cities and additional rail carriers, providing competition from multiple sources to carry goods farther.
However, the portion west of Tracy, MN, does not have any physical connections with any large cities or major railroads other than CP at Tracy.
Selling only this portion will result in that section losing competitive options and having to interchange the remaining traffic exclusively with CP.
Some experts, however, say that sales of rail lines to smaller railroad firms often lead to better rates because smaller railways have fewer costs than the major railroads.
For more information, call Surajudeen (Deen) Olowolayemo, USDA, at 202-694-3050.