Hedge fund cost cutting holds up rail supply-chain

Hedge funds are contributing to supply-chain problems — not at the dock but on the rails.

Rail freight shipping has slowed down, Hanska farmer and locomotive engineer Adam Suess told local state legislators holding a town hall last week.

Suess said a few years ago, hedge funds bought a controlling interest in railroads and forced operating practices to cut costs. As a result, he has noticed a slowdown in shipping agricultural products by freight train.

“We have multiple grain trains sit for two weeks or more waiting on locomotive power,” he said. “We can’t get our grain to market on a timely basis.”

The cost-cutting measures which were put into place even before the COVID-19 pandemic, reduced personnel, Suess said. Then the cuts were deeper when the pandemic occurred.

Suess said it adversely impacts him both as a farmer and a railroad employee. Delays in the transport of goods is generally accpeted to be one of factors that has slowed down the global economy.

Rep. Paul Torkelson, R-Hanska, who along with state Sen. Gary Dahms, R-Redwood Falls, was hosting the town hall, said he was a big supporter of railroads. He preferred seeing bulk goods on the rail to avoid putting them on the roads.

Torkelson agreed it was important to put pressure on railroads to ensure they supply the services needed to move goods.


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