AFBF Opposes Rail Merger Plan

Munch: Most agricultural shippers, including ninety five percent of grain elevators, are already captive shippers, which mean they have no other shipping alternatives. if transportation prices are increased, a shipper must accept the new price or they're unable to move their product to market. Currently, remaining competition in the industry occurs along interchange gateways. These are locations where grain moving across the country can transfer from one railroad to another. That interchange gives shippers at least some leverage because railroads know a competing carrier could take freight for part of the journey or they could swap to trucking or waterway.

Munch: In many markets rail is the only option to get grain and other agricultural goods to market, as well as to get critical inputs to the farm. About one-fifth of all U.S. rail shipments are food or farm products, and in many regions, rail is moving 85 to 95 percent of grain.

Munch: They have to look closely at competition, service, and impacts on shippers, including farmers. Right now, we’re still very early in the process. The initial application from UP and NS was actually rejected earlier this year for being incomplete. The railroads plan to refile the end of April.