Railroads Struggle to Catch Up

By Mary Kennedy
DTN Cash Grains Analyst

The early onset of winter-like temps and precip in the Midwest and Northern Plains led to delays and problems for rail traffic in the past week.

In a weekly service update to customers, the BNSF railroad (Burlington Northern Santa Fe) reported, "The operation experienced some velocity challenges this week due primarily to frigid conditions continuing to impact the North and Central Regions. This unseasonably cold weather caused some modest traffic slowdowns as well as some negative effects on network fluidity."

However, BNSF officials do not expect the weather-related problems to continue for long. "With network infrastructure adapting quickly to this early winter environment, we expect a continued improvement in train flows and car velocity heading into December," BNSF stated.

Two derailments on Nov. 13, one in Casselton, N.D., and one on the Montana Rail Link line, also disrupted service last last week on the BNSF.

"Due to the incidents, we implemented some rerouting of trains to alleviate backlogs on affected subdivisions. Train flows and routing through this area have returned to normal," the weekly service report stated.

"With the strong volume of traffic that daily uses this line, traffic was staged through last weekend," said John Miller, BNSF ag vice president, in his weekly podcast. Staged means trains are holding, waiting to move into a terminal, due to backed up traffic.

Both the BNSF and Canadian Pacific (CP) have recently experienced service disruptions in the Pacific Northwest due to an ongoing labor situation at the ports, along with excessive traffic creating slowdowns. "We have responded by implementing temporary restrictions for some export/import traffic at several of our hubs," BNSF stated. "While hoping for a resolution in the near future, BNSF will continue to evaluate and, in some cases, implement additional procedures to minimize impacts on service."

The CP told the Surface Transportation Board in its weekly update, "As we indicated last week, overall congestion has improved in the Pacific Northwest supply chain, in particular on the offline component of this corridor. We expect grain car cycle times for completed trips to begin to improve over the next several weeks as the supply chain works through this re-set."

Overall cars due in the US from BNSF were at 6,321 and were 13.3 days late, the railroad reported. Of that total, cars due in North Dakota totaled 3,340 and were on-average 14.1 days late and 1,112 were due in Montana and were 13.1 days late. Shuttle turns per month to the PNW improved slightly from the previous week to 2.3 TPM.

The number of outstanding car orders in North Dakota owed by CP were at 2,684and were 2.94 weeks late, according to CP. Cars owed in Minnesota were at 374 and were 1.26 weeks late and cars due in Montana were at 150 and were 2.67 weeks late. Grain shuttle (or dedicated grain train) round trips for the PNW region were at 1.62 during the past month.

Here is the link to all Class 1 Railroad updates to the STB on 11-19-14: http://www.stb.dot.gov/…

CANADA RAIL PROBLEMS STILL NOT SOLVED

While Canadian railroads have made some progress in moving grain, some are still not meeting the required minimums set by the government. The Manitoba Co-operator reported a member of Parliament said the railroads "have not hit their targets for three weeks and no fines have been issued, not a single one."

"An enforcement process is underway, given CN’s failure to meet the minimum grain volume requirements," Jeff Watson, parliamentary secretary to the minister of transport, told the Manitoba Co-operator. "That company is in fact facing fines and the enforcement process, as I said, is underway."

With the rules governing the weekly minimum grain volumes set to expire at the end of this month, concerns are mounting across producer groups and shippers.

"In 2013, weekly movement fell off the rails in week 12 or the week of October 27 and didn’t recover until after mandated volumes were introduced by the federal government," wrote DTN Canadian Grain Analyst Cliff Jamieson. "Concerns are growing that rail service could deteriorate should minimum volume mandates be allowed to expire. An informal DTN 360 Poll resulted in 68% of respondents suggesting that the mandates should not be allowed to expire but rather, should be viewed as an important first step in improving rail service for farmers."

"Changes to the car-ordering system operated by Canada’s two railways were highlighted in last week’s press. In September, CN made changes to allow orders to be placed for just two weeks out, while in late October CP changed their system to allow for orders to be placed for a four-week window. This move is in stark contrast to the past where there were no limits placed on orders which resulted in a growing number of unfilled orders. Neither railway feels that this change in procedure will hamper their efforts to meet the weekly targeted volumes."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary on Twitter @MaryCKenn

(CZ/SK)