Rail car shortage causing grief for state

Potato Commission, Port of Quincy trying for Olympia meeting

Washington products are not being shipped out of the state like they should be.

That's according to Pat Boss, executive director of the Washington State Potato Commission.

"We're seeing some trends in rail cars right now that are very troubling," he said. "Shipments going out of this state have dropped dramatically on rail mainly because of shortages."

The WSPC started work on the rail car issue a couple of years ago and is now seeing some of the shortage-related issues come to fruition, Boss said.

"We had a Congressional delegation letter signed by all nine House members that went out about three weeks ago to the chair of the appropriations committee asking for funds for that program," he said. "We're pushing the delegation very hard to get some money, because according to our latest estimates of rail car supplies, they're dropping dramatically on the West Coast for a lot of different reasons."

The hope is that the state and federal government can some together and get some seed money going, which would be of great value of the entire area — including Moses Lake, the Puget Sound, Spokane, Tri Cities and Yakima — which needs to be putting and moving more products out of state on rail, especially with rising fuel prices and road congestion, Boss said.

"The other issue is just the pure economics and the pure competitive advantage it gives a shipper when he or she can ship by rail, because our state is so far out," he said. "We're in the corner of the country that we need to have the ability to ship efficiently and cost-effectively, and rail gives us that."

Boss said that the Potato Commission has had meetings with the Port of Quincy regarding their incoming intermodal system.

"The Quincy proposal, it's interesting; they're having some of the same issues that we are," Boss said. "Our main issue is trying to get rail cars to send product back to the east coast. Quincy is actually finding that there are shortages of equipment to get their product to the Port of Seattle or the Port of Tacoma. So ironically, they're seeing the same issues on product going west; we're seeing the same issues on product going east."

Port of Quincy commissioner Brian Kuest said that it's not necessarily a shortage of equipment for the Port, because they will essentially serve as landlord.

"Northwest Container, our operator, is trying to get some money to get the start-up equipment related to this project, which would assist in any long-term movement, such as what the Potato Commission's needs are, and (Northwest Container is) looking at some containers to haul the refrigerated containers," Kuest said.

Kuest and Boss both said that the different organizations are trying to get a meeting with the Department of Transportation in Olympia. Kuest said the hope is to have a meeting lined up for June 28.

"That would be with the Port, Northwest Container and also Pat Boss of the Potato Commission to see if we can come to a common goal and identify what each party's needs are," Kuest said.

He said that the Port is hoping to have a meeting to finalize the engineering design of the intermodal system, and hopes to have a bid awarded by the end of the week, or at least by the end of the month.

Boss said more would probably be heard regarding rail funding in Washington, D.C. later in the summer. The $2 million D.C. funds would be to buy equipment, and money from Olympia would be for annual operating expenses; he said it needs to be asked for from the legislature next year.

"The neat thing about this produce rail car program is that it would be fee-driven," Boss said. "The revenues would be user fee, so we're only talking about a couple of early appropriations, one being the $2 million from D.C. and then some early appropriations to DOT in Olympia so they can start operating. After that, though, it's all self-sufficient. The big issue though, is trying to fix the shortage of rail car problem, which is getting to be worse and worse. It's hurting this area more than I think most people realize."

Boss said that another thing that came up in the Potato Commission's recent annual meetings was Canada's announcement of its review of anti-dumping duties.

"Every five years, Canada goes through a process of reviewing the duties that they apply on our potatoes," he said. "They sent out an official memo announcing that the Canada Border Service Agency has initiated review of the normal value of whole potatoes exported from the United States of America to the province of British Columbia. This investigation will begin a process whereby Washington in particular will have to supply a great deal of information to the Canadian government over the next year or so. The goal by our state will be to get the duties either reduced or removed."

If that goal isn't met, Boss said that the Potato Commission will be hiring attorneys, witnesses and experts to challenge the Canadians on their imposition of duties at the trade tribunal, which he said is basically a court trial.

"The duties aren't anything small," he said. "Typically in 50 pounds of potatoes going to British Columbia, the duties range anywhere from four to six dollars. It almost doubles the price of the potatoes going up there. It's insane. For 100 pounds of potatoes, you get a $10 to $12 surcharge put on them to ship into British Columbia, only British Columbia. If you ship to Alberta, you don't have to pay the duties."

Washington, Oregon, Idaho and California are the four major affected states, with Washington being affected in particular because it ships more potatoes than anybody else, Boss said.

With currency rates and the cost of production, Boss said the Potato Commission feels that it has a very good case.