Thursday, October 16, 2014

Just in

Upper Midwest rail delays roll on, oil only partly to blame 

Washington—There’s more oil than anyone expected being shipped by rail from North Dakota, but that’s hardly the only reason farmers in the Upper Midwest are facing big delays in getting their wheat, soybean and corn crops to storage facilities and on to market. Coal, for one, is also competing with grain and oil for rail cars, locomotives and track space. Growing demands on intermodal transport—where freight is moved using multiple modes of transportation—has been an ongoing issue, and last year’s big grain crop and the harsh winter are all part of the problem.   

“With the continued backlog of rail cars in the Upper Midwest, coupled with elevators still holding some of last year’s grain crop, farmers in that region are legitimately concerned that this year’s record crop will create a grain storage crisis. This grain has got to move, and the only way to do it is by rail,” said Andrew Walmsley, American Farm Bureau Federation transportation specialist.   

The one thing moving forward at a good clip is criticism of the rail industry. Farmers, Upper Midwest governors, the Surface Transportation Board and Agriculture Secretary Tom Vilsack have all put Burlington Northern Santa Fe Railway and Canadian Pacific Railway on notice. While CP has a ways to go to earn back its farmer customers’ and the government’s trust, BNSF officials are doing their best to address the few things under the company’s control.  

“BNSF has invested more than $5 billion in new locomotives, and added new capacity and staff,” said Andrew Walmsley, American Farm Bureau Federation transportation specialist. “They’ve also been communicating with Farm Bureau and other stakeholders about these concerns since the beginning of the delays a year ago.”  

While there is little the federal government can do to fix the backlog, the STB this spring started to require railways to report on fertilizer shipments, which were behind at the time, and are now doing the same for grain shipments.  

On Capitol Hill, Farm Bureau is backing the Surface Transportation Board Reauthorization Act of 2014 (S. 2777), which would increase STB’s investigative authority to launch its own investigations before a complaint is filed, improve rate review timelines to make it easier for board members to communicate, improve alternative dispute resolution practices and more.  
In addition, one of the bill’s sponsors, Sen. John Thune (R-S.D.), was joined by Sen. Amy Klobuchar (D-Minn.) in asking USDA to conduct an economic analysis of the rail service challenges agricultural shippers face. 
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