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Published June 24, 2014, 11:27 AM

Railroads respond to STB order

The two largest railroads serving farmers are not saying publicly exactly how they’ll respond to a Surface Transportation Board rule that requires new or updated plans to solve grain shipment delays by June 27.

By: Mikkel Pates, Agweek

FARGO, N.D. — The two largest railroads serving farmers are not saying publicly exactly how they’ll respond to a Surface Transportation Board rule that requires new or updated plans to solve grain shipment delays by June 27.

The June 20 STB ruling gave a one-week notice to BNSF Railway and Canadian Pacific Railway. Agriculture customers have complained in the past several months about increased delays that have cost farmers money. Railroads have blamed the delays on unfavorable weather and bottlenecks elsewhere in the country, as well as increased railroad demands from the coal and oil shipments in the region.

Other short-line railroads are handling grain, but the order only includes the two Class I railroads through which regional railroad shippers deliver grain.

Plans, progress

The STB says the plans must spell out how the railroads will “timely resolve their backlogs of grain car orders, as well as weekly status reports pertaining to grain car service.” The order says it is designed to “focus each railroad’s attention” on the problem for grain shippers, which the agency describes as “severe.”

The railroads have made some initial progress toward cutting grain car shipments but the STB says large quantities still must be moved before the 2014 crop comes in. The STB indicates BNSF has outlined its plans but CP so far had not “clearly articulated its plans for resolving the grain car order backlog in the near term.”

Further delays will cause deterioration of crops, late shipping penalties for grain handlers and lower prices for farmers.

The new reports will include the running total of outstanding grain car orders at the end of each week, the total number of new orders for the week, the total number of orders cancelled by CP or BNSF for the week, and the average number of days late for all outstanding grain cars. CP and BNSF also will report the number of cars allocated for grain car service each week, including the number of private cars in service.

The agency is particularly focused on the Rapid City, Pierre and Eastern Railroad in South Dakota. “CP’s report shall include the number of grain cars requested by RCP&E and the number of cars furnished by CP on a weekly basis,” the order says. The reports will continue “until each carrier resolves its backlog of unfilled grain car orders,” the STB says.

Customers ship about 52,000 carloads annually of grain, bentonite clay, ethanol, fertilizer and other products on that line.

Railroads respond

Amy Casas, BNSF spokeswoman, on June 24 said BNSF would “supply the requested information, much of which BNSF already supplies to customers” and the STB. She noted that BNSF already updates customers weekly and the STB bi-weekly.

Casas noted the STB does not direct BNSF to “preference one shipper group over another thereby redirecting resources from our other customers at a time when we continue to gain momentum to improving service.”

She acknowledged BNSF is “disappointed we have not met our customers’ expectations” but has made progress toward “substantially satisfying outstanding orders and we will be prepared for this fall’s harvest.”

Casas said the company has moved more grain and grain products in 2014 than in the same period in 2013. BNSF has moved 9 percent more ethanol than it did in the same period last year, and has cut agricultural past-dues by one-third — 5,000 cars — since May 20.

Ed Greenberg, a CP spokesman, on June 24 in an email response to Agweek said his railroad “continues to closely look through the STB order as it reviews its grain plan and will be responding directly to the agency.”

Greenberg offered no specifics, but said the issue is complex and the company is “working closely with our customers to address their shipping requirements as quickly as possible.” He said CP is “actively taking steps to address ongoing congestion issues in the Midwest and improve the velocity of our trains and effective utilization of our railcar fleet. CP remains focused on working with our customers across our U.S. network, which is an ongoing day-to-day process.”

The STB in April required six weeks of reporting on fertilizer shipments. That period has ended. BNSF has publicly issued podcasts from John Miller, vice president for agriculture. CP says it exceeded its fertilizer shipping goals but did not provide the kind of public updates that BNSF does. Meanwhile, the Canadian government has instituted minimum weekly grain shipments for railroads and instituted fines.

Dan Wogsland, executive director of the North Dakota Grain Growers, says the issue is transparency.

“Letting farmers and shippers know what the plan is, and what the plan of attack is as we move forward into this growing season and beyond is reasonable,” Wogsland says.