BNSF: Grain shipments will catch up by June: Not everyone believes prediction
BNSF Railway officials say it will get back to “more typical service” for agricultural shipments like grain by June, but those affected are not optimistic and question the company’s tendency to blame the weather.
Since about October, trains picking up grain at elevators across North Dakota have been days and weeks late. BNSF has maintained that weather and general congestion caused the delays, but others question whether the increase in crude-by-rail is the culprit.
“We feel compelled to respond directly to the assertion that the growth in crude volumes on the network specifically has compromised service to other customers,” BNSF spokeswoman Amy McBeth said in a statement Friday. “Crude oil trains are not given priority over other freight trains and have suffered from the same service issues as a result of the harsh winter weather conditions and as we work through congestion issues.”
She said weather-related problems for the trains include air brake problems, frozen switches that must be cleared manually, and limits on train speeds and sizes for precaution.
But North Dakota Sen. Heidi Heitkamp, who along with the rest of the state’s congressional delegation has been pushing BNSF for answers and improvements, isn’t buying it.
“Somebody would have to work pretty hard to convince me that the delay in ag shipments is completely unrelated in this massive increase in the amount of oil” being shipped by rail, she said in an interview.
Mark Watne, president of the North Dakota Farmers Union, said that in a February meeting with BNSF he was told all the delays are grain and none were oil.
“I asked the question just flat out to them,” Watne said. “They can’t just say that’s not a priority because it is substantially simpler for them to pull into an oil yard and pick up 110- or 52-car train. It’s all hooked together, they grab it and they go. Grain cars aren’t quite as convenient all the time.”
He added: “But still, that doesn’t give them an excuse to ignore, in essence, the industry that’s actually supported their rail for years. I don’t think they have a right to just ignore it. We don’t have another outlet.”
Heitkamp asserts the railway is prioritizing oil over agriculture because “when oil is being produced, it needs to move. There isn’t enough storage for the amount of oil that we are producing, beyond maybe a couple of days.”
“It’s about what’s the most critical need out there,” she said.
When Heitkamp pressed BNSF on the issue, she said the company responded by saying that it was “not gonna be responsible for shutting in wells.”
“I think that the lack of movement of these products is not just weather-related,” she said. “I think it’s related to the stress on infrastructure and the competition between oil and ag commodities.”
Southwest Grain General Manager Delane Thom said the delays have been the same since about October.
The shuttles — which have a single origin and single destination — are running 18 to 20 days across the system, Thom said, and the single-car shipments are 45 to 60 days late.
He, too, doubts that weather is to blame for all the delays and thinks congestion has something to do with it.
“Winter happens every year in North Dakota,” he said.
McBeth said with crude oil accounting for 4 percent of BNSF’s network volume, “it’s simply not large enough to cause such widespread service issues over such a broad region.”
She said in 2013, consumer products, automotive and industrial, coal and grain traffic all also increased.
When elevators fill up and await trains to unload into, they have to stop taking grain from farmers.
“They weren’t getting the cars at harvest time, so a lot of farmers were forced to put corn out in bins or out on the ground … maybe they’d cover it, maybe not,” Watne said.
Getting back on track
According to a BNSF chart, in North Dakota, more than 6,000 agriculture cars were past due as of March 8, with an average delay of about three weeks.
“Other indications that our service issues are impacting all customers are the average train speed on our network, which we have seen decline, and the average time a car sits in our terminals — known as terminal dwell time — which we have seen increase significantly on our Northern Corridor the last few months,” McBeth said in her statement.
The company projects catching up on past due cars by the end of June.
McBeth said the railway is spending $900 million of its $5 billion 2014 capital plan on Northern Corridor maintenance and expansion. In the short term, it’s staffing command centers to coordinate train flow, deploying BNSF resources to areas hit hardest by winter, deploying hundreds more locomotives and adding more than 5,000 new employees across the network. The company will also redirect flow to terminal locations not as impacted by weather to let up on congested terminals.
Heitkamp said because of the “very real economic consequences,” delays are having on farmers and ag processors, BNSF should try to catch up sooner than June.
“I don’t think that’s soon enough,” she said. “I think we need to push for a sooner date.”
Even with the June deadline, Thom’s not expecting much.
“We’ve got to listen to that, but I think the backlog is such that I don’t know if that’s realistic or not,” he said. “I hope it is but I don’t know if I’m terribly optimistic about it.”