A High Plains grain elevator has asked the Surface Transportation Board to weigh in on two disputes that it says are blocking a lower-cost western outlet for wheat, sorghum and corn. Weskan Grain filed separate cases arguing that a short line railroad’s lease terms and freight levels are effectively preventing shipments from reaching a cheaper route west, and that the railroad’s rates are unreasonable. Paper barrier limits outlets is the company’s central claim, saying an interchange commitment favors one routing over another.
Weskan says it wants to move grain from Scott City East, Kansas to its Stockton, Colorado facility because freight rates from Stockton to Southern California are substantially lower than the alternative routes available through the local short line. The company told the STB the Stockton routing would reduce export and westbound shipping costs, but that the interchange arrangement and the short line’s pricing put that option out of reach.
In its filings Weskan also challenged rates on the Kansas and Oklahoma Railroad, arguing there is no practical rail alternative and that hauling by truck along the roughly 80-mile connection would be cost-prohibitive. The shipper characterizes the lease and interchange commitments as a form of a paper barrier that restricts competitive access to western markets and raises elevator-level marketing costs for producers in the region.
Lease and rate disputes
The lease dispute produced a notable STB ruling in March 2026, when the board denied the Kansas and Oklahoma Railroad’s petition for renewal authority tied to amended lease terms. The STB said the railroad failed to demonstrate the amended lease arrangement was consistent with federal rail transportation policy, creating a significant procedural win for Weskan ahead of the rate case.
The rate challenge itself is noteworthy because it is the STB’s first grain rate case in nearly three decades, and it tests how the agency will evaluate alleged market power and the reasonableness of rates in lower-density rail regions. Weskan argues that the combination of the interchange commitment and current rates leaves it without a viable rail alternative to move grain west, effectively locking local shippers into higher-cost routings.
Both proceedings carry potential implications for grain movement across the High Plains and for shippers nationwide who face similar lease or interchange arrangements on short lines. The STB rulings will address whether lease amendments and interchange commitments can stand where they limit access to lower-cost outlets, and whether the contested rates meet the board’s standards for reasonableness. The STB denied the renewal petition in March 2026.
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