Railroads Rebuked for Failing Freight Service

Albin (WY) Elevator

It used to be that at the very least you could count on the trains running on time. Not anymore.  The Red River Farm Network out of Grand Forks, ND, has great coverage of agricultural issues across the northern Great Plains of Minnesota, the Dakotas and somewhat into Montana.  In this week’s news digest, they start off with a good overview of the railroad situation, in particular with BNSF’s delays in servicing agricultural users with the tremendous boom in oil traffic.

CP CEO to Meet with ND Lawmakers Today — North Dakota Senators John Hoeven and Heidi Heitkamp will meet [Monday] in Minot with Canadian Pacific Railway CEO Hunter Harrison to discuss the backlog in railcars as the harvest gets underway. A roundtable discussion will be held this afternoon at the North Central Research Extension Center.

NSF Exec Tries to Reassure Farm Audience — Farm organization leaders, ag processors and grain shippers voiced their concerns to BNSF Railway’s top man Thursday at a roundtable in Fargo. BNSF Executive Chairman Matt Rose tried to reassure the crowd, saying they’re getting caught up. “We’ve seen a 77 percent reduction since March. We know exactly where each one of the past dues are. We’re knocking out about 200 units every day in the state. We’ll be down to less than 1,000 within another week. We will have all of those past dues caught up if harvest is a little delayed.” Rose said BNSF is investing $5 billion this year and is committed to restoring speed and service.

More Questions for the Railroad — At a roundtable Thursday in Fargo, North Dakota Senator John Hoeven asked BNSF Executive Chairman Matt Rose if BNSF will have enough track to avoid a railcar backlog next year. “We want to make sure that you build enough track up here; do we have enough locomotives and hopper cars? Are you putting oil trains ahead of grain trains?” Rose said BNSF has seen a 144 percent growth in its business in North Dakota in the past five-and-a-half years. “If you’re going to tell me your state, over the next five-and-a-half years, is going to grow another 144 percent, I would say we’re in trouble.” Photos from the roundtable discussion can be found online.

Watne is Not Convinced — BNSF Executive Chairman Matt Rose told farm group leaders and ag shippers he does not believe his railway has favored oil shipments over grain and other ag products. North Dakota Farmers Union President Mark Watne is not convinced. “Unless they can show me that everybody has the same percentage delayed, whether it be oil, coal or grains, then I’ll agree with them, but, I still think that oil is getting priority.” BNSF’s agricultural group vice president John Miller said low prices will reduce the demand for railcars, as farmers will store their grain. Watne says that is happening, which forces some farmers to ask their lender to extend their operating loans.

Wide Basis Costing Farmers Millions — Arthur, North Dakota farmer, and North Dakota Corn Utilization Council Chairman Kevin Skunes says the extremely wide basis is costing farmers millions of dollars. “For the rail system to be delinquent in their cars, which caused this basis collapse and for the markets to collapse at the same time, has been a horrible problem. Right now we have an 80 cent to $1.10 basis in July and August. That’s incredible for corn. It’s costing the countryside a lot of money. The railroad, I think, should have seen a lot of this coming.”

Berg: I Can’t Work On BNSF’s Projections — American Crystal Sugar Company President and CEO David Berg told RRFN Thursday that his company has about 250 late car orders with BNSF, the same as it had last spring. Berg says Crystal’s three largest customers have been waiting for sugar shipments from five to 21 days for the last 90 days. “The plans are great, but I can’t work on projections. I have to work on actual performance.”  Berg says there is at least a short-term transfer of wealth occurring. “If you take a dollar a bushel out of the value of grain produced in North Dakota, that can only lead one way.”

MN House Candidates Address Rail Backlog — The delay with the Keystone Pipeline has complicated the rail challenge for farmers. State Senator Torrey Westrom, who is the Republican candidate for Minnesota’s 7th congressional district, said infrastructure needs to be improved to help correct the rail situation. “I just had a visit with a local elevator and they continue to have the problem of getting enough rail cars, fast enough to move grain. They’re going to have last year’s crop when this year’s crop comes in. It’s costing farmers extra money in premiums. That is unacceptable.” Minnesota Congressman Collin Peterson has had three separate meetings with rail officials. In his words, they’ve gotten the message. “There isn’t a good short-term solution. I think we need to get these pipelines built. We need to keep the heat on the railroads and we’ll continue to do that.” Peterson and Westrom were part of a forum during Farmfest.

No Teeth in Regulatory Process — With a new harvest season fast approaching, railroads are still working through last year’s crop. Minnesota Farmers Union President Doug Peterson says an unresponsive rail industry can charge whatever it wants. “We have a regulation piece called the Surface Transportation Board that I sat in front of twice,” explained Peterson, “They basically tell you that they take our complaints, they write a letter to the railroads, they write a letter back and six months later, something may happen or the issue goes away because of the weather or the markets; it is an absolute joke.”

Klobuchar Taking Input on Rail and Propane Logistics Minnesota Senator Amy Klobuchar is spending part of the August recess traveling rural parts of the state. That included a stop at Farmfest. In an interview with the Red River Farm Network, Klobuchar said she is getting input about propane and rail concerns. “We were happy to get the Army Corps to approve some infrastructure in Benson to bring propane in by rail and that will get in about 100 million gallons that they wouldn’t get otherwise,” said Klobuchar, “I’ve personally gone to the CEO of Burlington Northern and told him we need more rail cars.” RRFN’s Farmfest coverage is sponsored, in part, by DuPont Pioneer.

Top photo original; other photos from RRFN, links added.  AP covered the Senators’ meeting mentioned at the top:

MINOT, N.D. — North Dakota Sens. Heidi Heitkamp and John Hoeven are asking the head of Canadian Pacific Railway to improve agriculture shipping delays before harvest.

The senators met Monday in Minot with company CEO E. Hunter Harrison and agriculture producers to discuss a backlog in railcars entering the upcoming harvest.

Hoeven says the meeting was productive and it was important for Harrison to hear firsthand from farmers and ranchers.

Heitkamp says the railway must commit to decreasing the backlog and wait times. She says the wait times for CP cars increased between June and August and the company has been reluctant to give information about the delays.

The senators met last week with BNSF Railway executive director Matt Rose.


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