BNSF Railway is expanding its Nebraska presence with the acquisition of a northeast Nebraska short-line railroad.
The line drew the interest of BNSF, the Fort Worth, Texas-based railroad that is owned by Omaha’s Berkshire Hathaway, because it serves as a major route for agricultural commodities, particularly grain and grain products.
The federal Surface Transportation Board has approved BNSF’s application to buy the Nebraska Northeastern Railway, which owns 120 miles of track that stretch from Ferry Station near South Sioux City, Neb., to O’Neill, Neb.
The deal is expected to be completed in early December. Financial terms were not disclosed.
No BNSF employees will be adversely affected by the purchase and Nebraska Northeastern employees “will either get a generous severance or a job with BNSF,” said BNSF spokesman Andy Williams.
The railroad declined to comment on how many Nebraska Northeastern employees will be affected.
The 120-mile line is Nebraska Northeastern’s only line, acquired in 1996, and it is the sole operator.
With fewer handoffs involved, “the acquisition of this line allows BNSF to optimize velocity on the railcars moving grain out of this region of the country,” Williams said.
The line also serves three major ethanol production facilities: Siouxland Ethanol LLC in Jackson, Neb.; NEDAK Ethanol in Atkinson, Neb.; and Husker Ag Inc. in Plainview, Neb.
Husker Ag hauls about 85 percent of its product on the Nebraska Northeastern line, said the ethanol producer’s general manager, Seth Harder.
The change in ownership won’t affect traffic volumes or routes available to shippers along the line, BNSF said.
“NENE was very good to us in the past,” Harder said. “They’ve continuously gone out of their way to provide us with exceptional service. We’d want to see that service would at least be matched, and at the rates that will be reasonable.”
BNSF, in a letter to Husker Ag, said rates should decrease because the interchange between NENE and BNSF — a two-party exchange along the line — will no longer exist.
“We anticipate that they stand by their word,” Harder said.
BNSF plans to replace older rail so the railroad can handle faster train speeds. Currently, trains run only 10 miles per hour, but, with upgrades, they will be able to reach 25 miles per hour.
Harder has some safety concerns about the increased speed, but believes it will help streamline business.
“Any time speed and efficiency are improved for a commodity operation, that’s probably good for all players involved,” he said.
The acquisition will bump BNSF’s miles of track in Nebraska up to 1,555. The company has rights to an additional 94 miles of track in the state.
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