BNSF rail delays leave farmers waiting to ship
Extreme winter weather paired with flooding in parts of the Midwest has led to delays for the BNSF Railway Company, and for commodities shipments.
From March 16 to 22, the most recent dates available, almost 1,500 orders have been unfilled for between one and 10 days, and 1,886 orders are 11 days past due, according to a BNSF status report.
During the same period in 2018, 80 orders were between one and 10 days past due, and only one order was past due by 11 days, BNSF reported.
“While overall, one to 10 days past due is relatively minor, we’re working with all our customers across commodities impacted as a result of the significant flooding impacts to our network in the Midwest,” said BNSF spokeswoman Amy McBeth. “As we continue recovering, we expect service to normalize.”
Allen Krueger, manager at the Hatton (N.D.) Farmers Elevator Co., said his business is taking a hit because of the delays. He mainly ships to the eastern part of the country.
“We are affected. We’re talking three weeks to six weeks of delays,” Krueger said.
Last week, the Hatton Farmers Elevator got rail it had ordered March 1, Krueger said.
“So, a good three weeks, 24 or 25 days,” Krueger said.
Tyler Stegman, manager at the Columbia Grain Elevator in Arvilla, said he is less affected by the delays because he doesn’t have any transportation booked at this time.
“I haven’t loaded a train here in three weeks; that train was previously scheduled and not delayed,” Stegman said. “I’m hearing about delays out in the countryside, but I’m not feeling that.”
Stegman said he heard the majority of delays were due to flooding in Nebraska, Missouri, Iowa and Kansas.
“If you’re trying to ship to St. Louis or even down to the Gulf, I believe those trains are having a hard time getting around, getting through,” Stegman said.
How delays impact business
Delays affect the marketing of small grains, like wheat, Krueger said.
When selling by rail, an elevator can either get a bid before the product is loaded on a railcar or get a bid once the product is loaded on a railcar based on demand, Krueger said.
“With spot market, when you have delays, demand becomes really high,” Krueger said. “But you have to have the cars to hit that market, so it is kind of a guessing game.”
When there are fewer cars, an elevator can sell at a higher price. When things get backlogged, that can create a depressed market.
“They don’t come, they don’t come, they don’t come, then they finally come and there’s too many cars on the market and the price drops,” Krueger said.
Krueger said that because of this he canceled the railcars he had ordered and will now move his grain by truck.
“I knew it would come when everyone else was getting it, and I didn't want to sell to a depressed market,” Krueger said.
He said these delays are relatively routine. Between the months of December and March, delays should be expected because of winter weather.
“I’ve been doing this for many years; people make too big a deal out of this,” he said.
A lot of the issues are out of the railroad’s hands, Krueger said, like derailments and difficulties running cars in the winter.
“This was just a bad, bad winter all around,” he said. “Winters are tough on the rail industry. I just work around it, I don’t get too wild over it.”
Delays are a much larger concern during harvest time. Because southern states harvest sooner than states in the north, sometimes the railroad can get caught with not enough cars in the northern tier.
“If that happens, freight gets pretty expensive,” Krueger said.