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Cold and slow: As rail issues hamper ag business, industry leaders want solutions

A BNSF Railway Co. shuttle train takes on corn at a South Dakota shuttle-loading terminal in early February. North and South Dakotan elevator operators’ train turnaround times are higher than ever this winter. Some blame a burgeoning oil industry. Mikkel Pates/Forum News Service

FARGO, N.D. — Elevator operators are perennial critics of railroad service for hauling grain, but many say delays are worse than ever this winter.

The situation is bad enough that Sen. John Hoeven, R-N.D., called a meeting with the North Dakota congressional delegation and several officials connected to the issue Feb. 11 in Washington, D.C., to discuss possible solutions for sugar beet, grain and passenger transportation interests.

Among those in the meeting were Matt Rose, executive chairman of BNSF Railway, Mark Watne, president of the North Dakota Farmers Union, Dan Wogsland of the North Dakota Grain Growers Association, and three sugar officials — David Berg, president and CEO of American Crystal Sugar Co.; John Doxsie, president of United Sugars Inc., which markets sugar for American Crystal and two other cooperatives; and Jim Johnson, president of the U.S. Beet Sugar Association.

After the meeting, Hoeven told Agweek that BNSF committed to bring into the region 125 locomotives on short-term leases, which could be in place in the next week. He said the railroad will also bring in 250 people off seasonal furloughs, as well as begin posting delinquent train deliveries to a website this week.

During 2014, the railroad will invest $5 billion into its railroad network in expansions and improvements — at least $600 million of that in North Dakota — and add another 500 locomotive and 5,000 grain cars, as well as 5,000 employees to maintenance, system-wide, including 250 in North Dakota.

Berg told Agweek that Rose talked about the surge in volume from all sectors — intermodal, crops, coal and oil — and said things will improve when temperatures are consistently above 10 below zero.

“With the weather forecast in the 20s in the next few weeks, it should help a lot,” Berg said. “That’s great to hear. But we don’t want to hear plans and projections; we want performance.”

American Crystal has had to slow deliveries at its Ardoch, N.D., facility. Berg said the coal movements have been “sufficient but not adequate,” and that the company is getting coal that is then trucked to its five plants, but inventory is low.

American Crystal had turned down the factory slice because it wasn’t able to ship sugar out fast enough to customers. It has since turned factory slice up at all locations but has “no breathing space” for storage, Berg said. He adds that the company has contingency plans to pile sugar in flat storage that would have to be reclaimed and put back through the factory.

“That’s not a good way to do it, but it’s better than discarding beets in the spring,” he said.

The region’s sugar beet companies aren’t the only ones in agriculture to be feeling the pain and certainly aren’t the only ones talking about it.

More than sugar

On Feb. 5, Daniel R. Elliott III, chairman of the Surface Transportation Board and Ann D. Begemann, vice chairman, wrote a letter to Carl Ice, president and CEO of BNSF in Fort Worth, Texas, to say they’ve been monitoring BNSF service data and are growing “increasingly concerned about the deterioration in service that is now occurring over significant areas” of the railway’s system. The STB officials say they would be meeting with BNSF officials to discuss the “serious matter” and copied Rose.

“These service issues appear to be negatively affecting agricultural, coal, passenger and other traffic, therefore, we request that BNSF review with the board the scope of these service problems and their severity, the underlying causes, and why BNSF has had such difficulty managing the increase in traffic it predicted it could handle in its August 22, 2013 letter to the board,” Elliott and Begemann wrote.

“Most importantly, we need to understand how BNSF plans to return to appropriate service levels and its timeframe for doing so.”

The STB officials said they’re hearing about delayed cars and lack of sufficient locomotive power.

“Average train speed on BNSF has trended downward since January, while total cars-on-line has increased. Yard dwell time has steadily increased since September. It also appears increased cycle times for certain types of equipment are contributing to rail car shortages, particularly with regard to agricultural traffic.”

They said it appears BNSF service problems are “unusual and already have had a serious impact on customers,” noting that “as a Class I carrier, BNSF has the experience and ability to improve this situation.”

Effects of the cold

Extreme cold creates air brake problems for train movement and frozen switches that must be cleared manually, limits train speeds as a safety precaution and even limits how long rail workers can work in the extreme cold before warming up to protect their safety, Amy Casas, BNSF director of corporate communications, said.

BNSF has been working with freight customers on an individual basis to address their most critical service issues, she said.

“We are committed to an aggressive service recovery effort that is ongoing to restore service across our network to the levels our freight customers expect.”

Casas said there is “nothing systemically wrong with the system that cannot be corrected. BNSF believes agriculture products will continue to be a vibrant growth industry, and we are investing and expanding capacity to support that growth.”