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BNSF chairman says progress being made on ND delays

BISMARCK, N.D. -- A top BNSF executive said Wednesday the railroad is catching up with a backlog of fertilizer shipments and orders to move North Dakota farm products to market, but wet weather has hampered progress.

BISMARCK, N.D. -- A top BNSF executive said Wednesday the railroad is catching up with a backlog of fertilizer shipments and orders to move North Dakota farm products to market, but wet weather has hampered progress.

BNSF Executive Chairman Matt Rose told Forum New Service the railroad still has 6,800 past-due railcars for shipment of agricultural products in North Dakota, down from a peak of 8,200 in March.

"We're going to see those start to come down meaningfully in June" as the railroad moves more shuttles into single-car service, he said.

BNSF has exceeded its commitment to deliver 52 trainloads of fertilizer to North Dakota over a six-week period starting April 12. Fifty-four loads have been picked up and 49 have been delivered, with the rest expected to arrive soon, he said.

"So we're days away, not weeks or months," he said.

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North Dakota grain growers and dealers have voiced concerns in recent months that BNSF and Canadian Pacific Railway might be giving priority to cars carrying Bakken light crude oil, which both companies have denied doing. The state Public Service Commission has even discussed taking legal action on behalf of farmers and grain elevators.

Growth in crude-by-rail is an easy answer for BNSF's recent service challenges, but "it's not entirely correct," Rose said. Shipments of agricultural products and building materials also have increased significantly, he said.

The railroad industry grew by 800,000 units, or carloads, from 2012 to 2013, and BNSF handled about half of that business, Rose said. Shipments to and from North Dakota accounted for at least 20 percent of the total growth, he said.

Rose joked that BNSF has found "the next great line of business for the railroad: delivering pickup trucks to Fargo, N.D." The railroad is bringing a total of 240 trucks per day to its facilities in Fargo and St. Paul, a 543 percent increase since 2011, he said.

In North Dakota, BNSF was handling about 75 shuttle trains for ag products and 110 to 115 shuttles for oil through the first nine months of last year, but in October after harvest the agriculture sector wanted 100 or so trains and the oil industry wanted 130, Rose said.

"It's all the volume that just came, and we've chosen at our company not to de-market any business and not to choose winners or losers but quite frankly to build the capacity," he said in the interview.

The railroad is investing a record $5 billion into its system in 2014, which follows a record $4 billion investment last year, he said. This year's plan calls for adding 500 new locomotives, 5,000 new railcars, 5,000 new employees -- including more than 400 in North Dakota -- and laying hundreds of miles of new track.

"Quite frankly, the weather has given us fits being able to get the road bed stabilized enough to be able to lay the track," he said.

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While some additional capacity will come online this summer, the bulk of it will be in place by October, "and it's going to be extremely helpful," Rose said.

Meanwhile, BNSF continues to focus on improving the safety of shipping crude by rail, he told the conference.

Related Topics: CROPS
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