South Dakota's Agriculture Community Cheers Rail Watchdog Overhaul

December 21, 2015 08:00 PM
South Dakota's Agriculture Community Cheers Rail Watchdog Overhaul

South Dakota's agricultural industry is cheering the first major overhaul in about two decades of the federal agency that serves as economic watchdog of the country's freight rail network.

President Barack Obama signed legislation on Friday to revamp the Surface Transportation Board. The measure is intended to boost the board's effectiveness, give it more investigative authority and head off potentially lengthy and expensive disputes over shipping prices, said U.S. Sen. John Thune, who sponsored the measure.

"Hopefully it'll put the board in the position where it could be more effective in responding to both the railroads and the shipper community," Thune said.

The Republican said the legislation will hopefully address the "crisis" of railway backups and delayed grain shipments that peaked last year thanks to trains transporting oil. The new law gives the board the ability to start investigations into issues other than rate cases and also requires the agency to create a database of complaints.

It also increases the board's membership to allow communication among members without requiring public notice and expands voluntary arbitration for rate cases, among other changes.

Keith Alverson, president of the South Dakota Corn Growers Association's board, said he hopes the measure helps spur better shipping rates. He said that could help South Dakota's agricultural industry compete with neighboring states that have more transportation options.

"Something like this is pretty historic," he said. "If we pick up a nickel on corn price, that's money that stays than in the state rather than going ... to a rail a company or somebody else."

Jerry Cope, vice president of marketing at Dakota Mill and Grain, said there aren't many shipping problems right now. He views the measure as a way to avert future problems.

"It's more of a framework to operate under going forward to ensure when we do have problems, we have a better way, a quicker way to solve them," he said.

Thune also said he's pleased that the railroad industry was able to see some value in the measure. Ed Greenberg, a spokesman for the Association of American Railroads, said the industry trade group welcomes the legislation.

"We felt it strikes the balance of preserving market-based structures for shippers and railroads while also providing common sense process improvements to help the (board) work more efficiently," he said.

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