Officials push new rails on the Iron Range to cut transport costs

Trains hauling iron ore are an intractable part of the landscape on Minnesota’s Iron Range. (PHOTO: Jerry Huddleston, Flickr CC)

Say, ladies and gents, the brass says someday an iron horse might reach across the whole Mesabi Iron Range. Ain’t that a corker! Wait until Mr. James J. Hill hears about this.

Slang from the 1880s aside, local officials and elected leaders — at the behest of companies like Minnesota Power — are pushing for more railroad competition on the Iron Range. The Iron Range Regional Rail Initiative seeks to study the feasibility of a new line that connects the cities of the Iron Range, from southwest to northeast.

It’s all part of a larger argument about “captive rail,” the idea that a single company operating a railroad can charge whatever it wants, even if that price is far above average.

Even though the machinations of robber barons and railroad tycoons have long been a part of the region’s history, only two major railroads remain here.

Canadian National operates the lines once controlled by the storied Duluth, Missabe and Iron Range (DM&IR) Railroad. And the Burlington Northern Sante Fe (BNSF) Railroad runs the lines once operated by the aforementioned James J. Hill’s Great Northern Railway, namesake of my radio show.

CN serves the eastern and most of the central Iron Range. BNSF wheels cars on the western Mesabi. At issue is the fact that the two rail carriers both transport goods and materials across the continent, but don’t compete against each other for the last few miles of their territories. Minnesota Power (MP) and others say that has led to unfair pricing for those segments of the supply chain.

More specifically, MP runs the Clay Boswell power plant in Cohasset, west of Grand Rapids. A coal burner, Clay Boswell requires regular shipments of coal. MP appears to be the largest funder of the Iron Range Regional Rail Initiative, according to the Duluth News Tribune.

In addition to reducing costs for MP, officials say that during periods of heavy oil production in western North Dakota, rail space is limited. Taconite and coal shipments were both disrupted during the oil boom of 2014.

The project has the backing of Sen. Amy Klobuchar, but requires support from St. Louis County’s rail authority as well. Other counties may also get into the mix.

Of course, rail lines already extend across the Iron Range. Driving along Highway 169 from Grand Rapids to Virginia you see tracks, trestles and bridges often right alongside the road. What this is about is creating parallel tracks in a few short stretches to spur competition.

The railroads have been quiet on the matter, though will probably resist the initiative. I imagine their argument will be simple. Why should they build more rails or operate more lines when current infrastructure is able to move the necessary cargo?

Meantime, if rail providers compete across the length of the Mesabi Range, does that mean the Mesabi Railway Company will come back? In 1911, railroaders installed the “Interurban Electric Line,” providing passenger rail service to the cities of the Iron Range. The rise of the American automobile ultimately led to the Mesabi Railway’s demise, but you can still see the lines in some places, and ride on one of the trolley cars at the Minnesota Discovery Center.

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