Cramer asks Canadian government to let rail car mandates expire

FARGO, N.D. -- U.S. Rep. Kevin Cramer, R-N.D., says he's concerned about conflicting responses from the Canadian government about the impacts of fines on Canadian railroads for failing to meet grain quotas, and the impact on U.S. farmers who have seen tardy service.

The Canadian government has a program in place that would issue fines if Canadian National and Canadian Pacific railways fail to move a minimum of 536,250 metric tons of grain a week through Nov. 29.

On Aug. 21, Cramer sent a letter to Gary Doer, Canadian Ambassador to the U.S., asking for details on whether fines have been imposed for late deliveries.

Doer, in a letter dated Sept. 15 but delivered electronically Sept. 25, told Cramer there isn't anything to worry about.

"To date, the railways have met or exceeded required volumes on a weekly basis, demonstrating the requirements are achievable," the letter says.

But on Sept. 17, the Canadian government announced fines against CN for failing to meet its quota, Cramer notes.

Cramer told Agweek on Sept. 25 the mixed signals are "curious" and says if CP hasn't been fined, it's "more disturbing" because it's an indication the railroad has indeed "prioritized" because of the threat of fines, "meaning that American customers are secondary."

On Sept. 26, Cramer officially called on the Canadian government to let the grain shipment mandates permanently expire, or face a trade complaint.

In a letter to Doer, Cramer says "I respect the fact that you want to protect your domestic and international patrons. Your customers are also our customers. But the nexus between your performance mandates and their implicit encouragement for CP and CN to provide less service to the Unites States, in my opinion provides a solid foundation for a successful trade violation claim."

CP's new system

Meanwhile, farmers are concerned about shipping late-season crops because of ongoing rail issues, but there is evidence the railroads have done some catching up.

CP will have fully deployed its new car ordering system by Oct. 1. Initially, the company expected the roll-out by Aug. 1. Grain elevator operators in the region are guardedly optimistic about the system, but are withholding judgment.

Under the new system, a dedicated train has at least 100 cars, up to 105 or 107. A dedicated train is loaded and goes to its planned destination, then theoretically comes back intact for reloading.

In its Sept. 19 report to the STB, CP reported open grain car requests at 5,583, of which 3,480 would be serviced through the old program.

U.S. Sen. John Hoeven, R-N.D., on Sept. 22, said the new CP report showed "progress" but that the company needs to do more.

"With the harvest in full swing, we need to ensure the railroad is doing all it can to meet not only this year's needs, but also next years."

CP's September plan called for 2.2 turns per month for its dedicated train program. The company reported it had exceeded that at 2.5 turns per month as of Sept. 14, but the turnaround was less than the 3.14 turns per month it had achieved Sept. 7.

"The big question mark will be what their turns will be," says Keith Brandt, general manager of Plains Grain and Agronomy in Enderlin, N.D., whose shuttle loading is served by CP. "Will they be 2 or 2.5 turns per month? Until we get some confidence, we're still kind of shooting in the dark for rail planning."

BNSF progress

Meanwhile, Burlington Northern Santa Fe issued a report that showed its first substantial increase in past-due railcars, after a downturn since late March. Of 2,581 cars in the non shuttle system past-due as of Sept. 18, about 60 percent were less than 10 days old. Only 3 percent were past a month old.

North Dakota leads the nation in BNSF past-dues, with 1,648 at 54 locations, averaging 8.8 days late. Montana reported 500 cars past due, waiting an average of 10.1 days. Minnesota had 99 cars past due an average of 6.3 days and South Dakota had 89 past-dues with an average of 5.7 days.

BNSF shuttles are cycling to destinations and back 2.3 times per month, which is still short of the September plan of 2.5. Shuttles to the Pacific Northwest ports, important to North Dakota and surrounding states, are hitting 2.5 times per month, but declined from the 2.9 turns they were reaching in the previous week.