Trade stokes state's transportation businesses
Montana State Roundup
Published April 1, 1995 | April 1995 issue
Moving goods may be more lucrative than producing goods in some Montana communities, where the rail and trucking industries are booming.
Sweetgrass, the Canadian border crossing on Interstate 15, Montana's only major north-south highway, is the 10th busiest crossing point along the U.S.-Canada border and the second busiest crossing point west of Detroit. Cross-border truck trade amounted to $2 billion in 1992, up 65 percent from 1988, while rail trade tripled in value between 1988 and 1992 to about $200 million per year.
This enormous growth in the movement of goods is a reflection of expanding wholesale trade in Montana, which jumped 34 percent between 1987 and 1992, compared to 22 percent growth nationwide. Sources also expect the North American Free Trade Agreement to gradually increase transportation volume. And the planned merger between the Burlington Northern and Santa Fe railroads will open new Western market connections.
"We're running at near capacity due to increased trade movement," says Gus Melonas, Burlington Northern Railroad's Seattle spokesman. The Burlington Northern is the largest rail shipper of goods across Montana, and, according to Melonas, is upgrading and adding trackage, and purchasing new equipment to expedite car movements and keep up with the demand.
Trucking and combined rail/truck, or intermodal, transportation have also taken off. Ray Kuntz, vice president of operations and sales for the trucking firm Watkins/Shepard in Helena, says his company's combination mode of transportation is cheaper: Rail transport costs are approximately one-third to one-half the costs of shipping solely by truck.
Missoula-based Watkins/Shepard has built a system of transporting large quantities of furniture and carpeting from manufacturing centers in the Southeast and reloading in Montana for distribution by truck in the western United States and Canada. The company's volume has increased substantially since the program began in 1989.
"We need to build around integrated transportation systems," to operate continentally and inter-continentally, says Larry Swanson, associate professor in the Center for the Rocky Mountain West at the University of Montana.
The Montana Tradeport Authority in Billings plans to develop an intermodal rail-truck hub on 67 acres west of Billings. The hub would accommodate trucking, warehousing and manufacturing in conjunction with construction of an Interstate 90 interchange scheduled for 1996- 1997. The group also hopes to make adjacent land available to the Burlington Northern for extending rail lines to the hub.
"Billings has the right idea," Swanson says. Large-volume shippers need a strategic location to break down shipments for distribution. He adds that goods from Pacific Rim countries now have a direct route to the interior because of Montana Rail Link's recent purchase of tracks from Vancouver, British Columbia, to Spokane Wash., and Burlington Northern rail lines running from Spokane through Missoula, Butte and Bozeman to Billings.
The transportation industry is responding to changes in the economy, says Swanson, adding that transportation has become part of the inventory system. The idea of building manufacturing facilities near transportation hubs makes sense, he says. There are huge amounts of raw and partially processed goods shipped via rail, but "there's no hope of adding value if the train doesn't stop," Swanson says.