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Published March 31, 2014, 09:45 AM

Further delay in railroad shipments

FARGO, N.D. — Railroad performance for agriculture isn’t improving, and shippers served by Canadian Pacific Railway are growing more concerned their locomotives and crews are going to the Burlington Northern Santa Fe Railway in the U.S.

By: Mikkel Pates, Agweek

FARGO, N.D. — Railroad performance for agriculture isn’t improving, and shippers served by Canadian Pacific Railway are growing more concerned their locomotives and crews are going to the Burlington Northern Santa Fe Railway in the U.S.

The weekly BNSF report indicates 16,761 rail cars were running an average of 23.4 days late as of March 21. This is an increase of 10.1 and 11.9 percent, respectively, from the previous report issued March 12.

Meanwhile, complaints of railroad delays on the Canadian Pacific Railway are escalating, although there is no report similar to BNSF’s to tally late cars.

Steve Strege, executive vice president of the North Dakota Grain Dealers Association, says he hasn’t heard this much “disgust” over a topic in years.

Keith Brandt, manager of Plains Grain & Agronomy in Enderlin, N.D., says his facilities are about two months behind on open car orders with CP, either for singles or shuttle trains of 100 cars or more.

“The biggest problem is we’ve taken penalties on late shipments,” Brandt says. “We’re also trying to accommodate our (farmer) customer who wants to haul and deliver grain.”

Brandt has heard reports that CP has as many as 200 locomotives running on BNSF or other Class One railroads in the U.S., which reduces its own fleet. There is always some “power trading” among railroads, as they intersect, he says, but recently CP seems to be doing more providing than usual.

“On paper it makes sense, doing more with less power units and manpower,” Brandt says.

Another problem is that railroads have only so many “passing tracks,” and those stretches are built for the shorter shuttles. That means that when a train must wait for another to pass, it’s often the grain trains, usually 7,000 feet long or less, that do the waiting. The longer trains are 9,000 to 10,000 feet long.

Another market

There is a secondary market for acquiring BNSF shuttles.

“You can get it, but you’ve got to go out in the market and pay $1 a bushel premium to get those cars,” Brandt says. “You don’t want to do that. There’s not that much profit in trading grain to justify that.”

When that’s necessary for one train, however, those costs are probably averaged out against the next three or four trains.

Brandt acknowledges that officials with the Surface Transportation Board were in Fargo, N.D., last week to talk to grain shippers. The STB meetings weren’t public and the officials weren’t authorized to talk with reporters.

He thinks the STB should be given authority to help balance service among products, so it doesn’t get swayed toward one product, such as oil. Brandt adds that there is more revenue in hauling oil versus grain, in part because grain is a cyclical market that does not always need transportation.

Another grain elevator merchandising manager at a northern North Dakota elevator, who declined to be identified, says his company is eight to 10 weeks behind in CP shuttle orders and further behind on singles to 25-car placements.

“Normally, this time of year we’d be a couple of weeks behind, or maybe even ahead of schedule,” the man says.

He says it is not uncommon to see 10 to 20 BNSF trains come by his facility in a given day. He says one in five BNSF trains have some CP locomotives on them.

“If there are three or four engines on the train, one or two might be CP,” he says.

He says his facility has been behind schedule since November while Brandt says Enderlin has been behind only since January.

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