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Published July 28, 2014, 11:14 AM

Legislators say CP must improve

FARGO, N.D. — Burlington Northern Santa Fe Railway reported 3,908 past-due agricultural rail cars as of July 17, down about 14 percent from the previous week’s 4,561. The past-due single-car orders were an average of 26.6 days late, compared with 30.2 days the previous week.

By: Mikkel Pates, Agweek

FARGO, N.D. — Burlington Northern Santa Fe Railway reported 3,908 past-due agricultural rail cars as of July 17, down about 14 percent from the previous week’s 4,561. The past-due single-car orders were an average of 26.6 days late, compared with 30.2 days the previous week.

BNSF, in a weekly report ordered by the U.S. Surface Transportation Board, notes that the number of cars 60 days past due is large mainly because of extensive rain and rail bed degradation in branch lines near Westhope and Rolla, in North Dakota, and Scobey, Mont. The three subdivisions were out of service for periods equaling two months since late spring and early summer, but the company now has returned them to service.

Updated BNSF and Canadian Pacific Railway reports for the week ending July 25 were not available by press time.

“BNSF’s focus will be on moving the oldest orders first from these locations,” the report says.

In a more detailed weekly voluntary podcast report, John Miller, BNSF ag group vice president, reported consistent, but slightly different numbers based on July 18 reports.

“We continue to make significant progress in our past-dues, which is good because it will help with the onset of the wheat harvest beginning in the north and fall harvest right around the corner,” Miller says, adding that BNSF had reached more than half of its goal to acquire 500 locomotives this year. It also has hired 4,000 of the target 5,000 new employees for this year.

Shuttles still slow

BNSF’s cycling of 110-car shuttle trains to ports averaged two per month — less than the 2.5 or more that elevators typically say they need. Shuttle turns to the Pacific Northwest are at 2.1 per month, while turns to the Gulf of Mexico ports were 2.6.

CP reports singles and shuttle traffic together. For the week ending July 18, it reported it had 23,761 open requests for cars in North Dakota, an average of 10.72 weeks late. Minnesota had 7,578 open requests, with the average age of 11.2 weeks late. CP previously reported 24,280 open requests, averaging 10.14 weeks. The report says CP filled 2,070 grain car orders in the U.S. during the week.

Rep. Kevin Cramer, R-N.D. says he was watching the reports. He acknowledges the BNSF progress and notes more progress needs to be made before harvest. Cramer says CP had not indicated “any meaningful reductions in their backlog since these reports began.”

On July 22, U.S. Sen. Heidi Heitkamp, D-N.D., called on CP to provide information about the steps it will take to address the backlog in time for harvest.

“North Dakota farmers are rightfully concerned that railroad delays will hamper their ability this harvest season to store their crops and get them to market,” Heitkamp says. “The time to act is now, which is why I want Canadian Pacific to provide our farmers with an update on the status of agriculture shipments and recommit to getting issues with poor service resolved before this year’s crop is loaded into bins. Our farmers work too hard to produce high-quality foods to have their livelihoods threatened by inadequate transportation service.”

Sen. John Thune, R-S.D., says: “I really worry with the wheat harvest coming in now and corn and soybeans coming in later — in what look like pretty big harvests — that we’re headed for some very, very difficult times ahead if we don’t head this off now.”

Ed Greenberg, a CP spokesman says: “The ordering system we have in place today does not allow for a true picture of the demand backlog, as by design, it allows customers to enter as much demand as they choose. In-aggregate demand is often double what is historically loaded on any given week.”

In its STB report, CP says “customer feedback has been positive” for a new grain car ordering system, which Greenberg says will provide a “more efficient framework for customers and the railroad.”

CP hasn’t announced the system publicly.

CP’s new plan

Keith Brandt, manager for Plains Grain & Agronomy in Enderlin, N.D., tells Agweek he’s been told the new system will start phasing in on Aug. 1. Brandt says the new system will allow elevators to order dedicated trains that will go to ports and back, intact.

“I suppose it puts some discipline into the program,” Brandt says. “If I have this train, I figure I’ll be getting that train back every 15 days at my spout, so I’ll have to load it again.”

He doesn’t know how many trains elevators will be allowed to order, but he says elevators have indicated more interest than CP had anticipated. Brandt says he’s been told the trains will be shipped off a regular tariff rate, not like the BNSF system, where elevators order dedicated trains in a premium auction, or buy them on a secondary market, often at an additional premium.

Jim Broten, a Dazey, N.D., farmer and chairman of the North Dakota Ag Rail Business Council, says his group is working on convening a meeting later this month to press for agricultural needs.

Similarly, Dan Wogsland, executive director of the North Dakota Grain Growers Association, says he is still concerned.

“Harvest is around the corner,” he says, adding that wheat is expected to be a great crop.

Wogsland says the region has to be concerned about being a reliable supplier to export markets.

“Farmers are paying for the fact that there’s uncertainty in the market, and paying for that in higher-than-normal basis rates,” Wogsland says.

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