North Dakota commission calls on STB to help reduce grain-car backlog

The North Dakota Public Service Commission (PSC) earlier this week urged the Surface Transportation Board (STB) to take immediate action that would prompt railroads to make faster progress on reducing the backlog of grain cars.

Similar to what it did in spring for fertilizer shipments, the STB should require railroads to devote more resources to transporting the 2013 and 2014 crops to market, including the transportation of last year's crop before the harvest arrives, so the state's producers and elevators don’t suffer "significant financial harm," PSC officials wrote in a letter to the STB.

"The railroad’s response has been entirely inadequate to address the needs of our producers. This year’s crops are ripening, farmers are preparing for harvest and far too many storage facilities are full or near capacity," said PSC Commissioner Julie Fedorchak in a press release. "The conditions are ripe for a significant problem with the 2014 crop [that] demands swift action by the STB."

In mid-July, a PSC survey of North Dakota grain elevators showed little progress was being made toward reducing overdue grain cars and moving product to market, commission members said. More than 90 percent of Canadian Pacific customers and 50 percent of BNSF Railway Co. customers who responded to the survey were waiting for more than 60 percent of their cars, according to the PSC. The vast majority of the respondents that use BNSF and CP also expressed low or no confidence in the service they will receive in the near future, they added.

"Inadequate rail service is already devastating the 2014 cycle because elevators are unable to contract as they normally would if they could count on timely shipping," said PSC Commissioner Randy Christmann. "This is not only a problem for North Dakota because when the grain is dumped on the ground while waiting for transportation, the food supply loses quality and goes up in price."

The PSC held another meeting with railroads yesterday to receive a status report on eliminating the backlog and learn their plans for meeting producers' needs. A constitutionally created state agency, the PSC regulates certain business activities in the state, including electric and gas utilities, telecommunications companies, power plants, pipelines, railroads, grain elevators and coal mine reclamations.

BNSF continues to focus on accommodating current agricultural demand as well as positioning the railroad to handle the new crops in fall, said spokesperson Amy Casas in an email.

"We have been moving significant grain volumes and expect that to continue to improve as we will offer more shuttles and rail cars this fall than we did in 2013, and we believe our performance will be better than it was last year," she said. "Year to date, we are moving record agricultural volumes in North Dakota."

BNSF has made significant progress on reducing past-due orders for grain cars and will continue making progress, with the total number across the system now standing at around 3,000 cars, said Casas. North Dakota past-due orders are down 77 percent from March's high to less than 2,000 cars today, she added.

"Under our current plan to spot 450 rail cars per day, and combined with new orders coming in, we should see a reduction to less than 2,000 past-due rail cars on our network by mid-September," said Casas.

Meanwhile, CP remains focused on moving as much grain as possible and communicating with customers across the network, said CP Senior Vice President of Operations Robert Johnson in an Aug. 1 STB filing on grain service.

The Class I is committed to having the necessary resources in place for the fall harvest. CP's plan operating plan going into the fall is focused on ongoing improvements in train velocity and effective utilization of the rail-car fleet to deliver more cars each week, said CP spokesperson Breanne Feigel in an email.

"This is a continuous process that CP officials are engaged in as part of ramping up service for shippers this fall," she said. "This is a complex supply chain issue involving not just the railways, and CP is collaborating with all stakeholders in the grain handling and transportation system to be in a strong position to respond to grain shippers."