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New rail carrier to service Gavilon Liberty Grain facility

KIMBALL — In the next two weeks, the first Canadian National rail cars are expected to roll into the Gavilon Liberty Grain facility between Kimball and White Lake.

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For Todd Yeaton, the facility’s manager, the arrival of Canadian National rail cars will mean access to a greater variety of rail carriers for the facility and, as a result, savings for the area’s farmers.

“It’s a better value,” Yeaton said. “We can find the most economical methods of freight to give them the most money for their commodity.”

Burlington Northern Santa Fe has been the primary rail carrier for Gavilon Liberty Grain since the facility opened in September 2012, after more than a year of construction. The $35.5 million facility is capable of taking grain from area farmers and loading it on 110-car shuttle trains, mostly bound for West Coast ports.

Bruce Lindholm, railroad program manager for the South Dakota Department of Transportation, said the arrival of Canadian National rail cars at Gavilon Liberty Grain is an important development.

“It shows that shippers on state-owned lines have access to other carriers, and thus access to those markets,” he said.

In 2005, the state sold nearly 370 miles of its so-called “core” rail line to Burlington Northern Santa Fe. The core sections of the line run from Aberdeen to Mitchell, from Mitchell to Canton and Sioux Falls, and from Mitchell to Sioux City. One of the terms of the sale was that other rail carriers could use the track for shipping.

That access, Yeaton said, has paved the way for Canadian National, and eventually other Class I rail carriers — namely Union Pacific and Canadian Pacific — in South Dakota, Yeaton said. Including Burlington Northern Santa Fe, that means Gavilon Liberty Grain and other facilities along state-owned rail lines will have access to at least four Class I rail carriers.

“Any facility on a state-owned rail line can do it,” Yeaton said. “We just happen to be in the position right now to take advantage of it.”

The Surface Transportation Board, a part of the U.S. Department of Transportation, defines a Class I railroad as “having annual carrier operating revenues of $250 million or more,” after adjusting for inflation. In 2011, that meant an annual operating revenue of at least $433.2 million.

In the U.S., there are seven Class I railroads, according to the Association of American Railroads, including the U.S. branches of Canadian National and Canadian Pacific.

With access to more rail carriers, facilities like Gavilon Liberty Grain will be able to offer farmers the most economical shipping options for their crops, Yeaton said.

“It’s up to us to find the best freight available,” he said.