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Don’t raise shipping costs for Minnesota businesses

by Rep. Tim Walz (D-Minn.) - 04/06/12 6:57 PM ET

Under normal circumstances, the price one company pays to acquire another would be of interest only to the executives and investors involved. But because of the way our freight rail system is set up, this sudden and arbitrary increase in BNSF’s value could allow them to charge higher rates to their customers, including Minnesota businesses.

Now, Berkshire Hathaway had a choice in negotiating this deal, and they chose to overpay. But Minnesota businesses, including farmers and utilities, did not have a choice. And if their shipping rates go up, most of them do not have the choice to use another railroad either. In fact, because so many Minnesota businesses only have one option for shipping their goods to market, they are often referred to as “captive shippers.”

{mosads}On March 22, the Surface Transportation Board (STB), which oversees the nation’s freight rail system, held a hearing to determine if BNSF should be allowed to increase the rates they charge Minnesota farmers and businesses as a result of this deal. Their decision will be announced soon.

If the STB gives them the green light, Berkshire Hathaway and BNSF will be allowed to pass on the costs of their acquisition premium to their customers, and ultimately to all of us. That is not right.

Let me be clear, I and all Minnesota businesses see the importance in the service the freight rail industry provides. By shipping corn and grain from the field to your local grocer, they give us the ability to make that family dinner you have been waiting all day for. By shipping natural gas and coal from the mines to the utilities, they give us the ability to heat our homes on even the coldest night in December. There is no doubt, rail plays an important role in giving each one us peace of mind at the end of the day.

Minnesota farmers and small business owners deserve this peace of mind as well. They deserve to know that their shipping rates will not go up. The STB exists to protect railroad customers from freight rail monopoly power, not to strengthen it. That is why I am calling on the Board to do the right thing and stop any unfair rate hikes.

Representative Tim Walz (D-Minn.) serves on the Committee on Agriculture and the Committee on Transportation and Infrastructure.