FARGO, N.D. -- John H. Miller, vice president of agricultural products for Burlington Northern Santa Fe Railway, answered lots of questions on April 9 in a meeting of the North Dakota Ag Rail Business Council.
Miller met with association members who complained about slow service but seem happy that the railroad is investing for the long-term -- $5 billion per year compared with $1 billion in the past.
Among the efforts Miller mentioned are more passing lanes, double-tracking between Minot, N.D., and Glasgow, Mont., and new side tracks for passing.
While not making specific predictions, Miller said the investments should start paying off and things should "gradually get better all year long."
While farmers lament about late shipments -- shuttle trains that are running at two-thirds the rate they should be and car deliveries that are an average of three weeks behind schedule --- Miller says the reality is better than perception. Agriculture has 220 shuttle loading sites that collectively move more freight than oil, he says.
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A public Surface Transportation board hearing on rail delays was held in Washington D.C., and included testimony from the Renewable Fuels Association, the Montana Farmers Union, Sen. Tim Johnson, D-S.D., and many others.
Perception vs. reality
That's not the perception farmers in coffee shops have, says Delane Thom, manager of Southwest Grain based at Taylor, N.D.
"By perception, the ag producers can sit and watch the trains going through town," Thom says. "They rarely see a grain train passing through, so their perception, their idea is oil and coal gets priority over ag because of the sheer volume of what they see."
Miller says BNSF has been "leasing locomotives from everybody" since last winter. He acknowledges that some of that power has come from Canadian Pacific, which serves other customers in North Dakota and Canada.
Canadian legislators on April 7 amended a bill to order railways to compensate for grain shippers when they provide poor service, Reuters reports. Canadian National Railway Co. officials say they are "disappointed" with the amendment, and Canadian Pacific Railway Ltd. officials were reviewing it.
Factors at play
Miller acknowledges the railroad needs to do better, but repeats earlier explanations. "We were betting on growth, but the growth is even bigger than we thought," Miller says. "We've got all four business units growing at the same time."
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He describes a sort of perfect storm of factors that have put the railroads behind.
• Coal shipments increased 3 percent on the year, after they were predicted to decline 4 to 6 percent. Electricity makers substituted coal for natural gas when the price of gas increased.
• Oil shipments are higher than expected, and industry sources indicate they will likely increase for the next four or five years.
• Farmers have been raising increasingly larger crops, making shipments spike upward.
• Shipments to the Pacific Northwest have increased to respond to Asian demand for U.S. grain and other products.
• Weather this year was brutally cold and involved key delays in the Chicago area.
• Canadians are trying to move more grain to the U.S. to compensate for poor service in their country.
In response to shipper concerns and political pressure, Miller has been delivering weekly status reports. In the latest report, issued April 5, he said cars late in the company's entire service were 15,127 -- a 6 percent improvement from the previous week, but about the same as the two weeks before.
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Increased reporting
