LUBBOCK, TX – A Kansas grain company has filed a formal rail-rate complaint with the Surface Transportation Board, creating the first grain rate case before the agency in nearly 30 years and raising new questions about short-line transportation costs.
Weskan Grain challenges Kansas and Oklahoma Railroad rates for 50-car blocks moving from Scott City, Kansas, to a grain elevator near Sheridan Lake, Colorado. Rates are $850 per railroad-supplied car and $825 for shipper-supplied equipment.
Weskan says those charges produce revenue-to-variable-cost ratios of 253% and 305%, both well above the board’s 180% threshold for rate jurisdiction. Mediation ended August 10 without a settlement.
The dispute comes as grain transportation remains active. Class I railroads originated 26,543 grain carloads during the week ending August 15, 4% above last year and 16% above the three-year average.
The case could provide an important test of how federal regulators evaluate short-line grain rates when producers and elevators have limited transportation alternatives.
Farm-Level Takeaway: The Weskan case could influence how grain shippers challenge high short-line rail costs in markets with limited competition.