(The following article by Ken Crites was posted on the Minot Daily News website on March 18.)
MINOT, N.D. — The shortage of rail cars at harvest time and even beyond is and has been a perennial problem in North Dakota.
Most say it’s a problem with no easy solution. Some say there is no solution- that the state is simply at the mercy of the railroads.
The North Dakota Legislature’s Interim Transportation Committee met in Minot Tuesday seeking input on the problem.
“I wish I could say the rail car shortage ‘we had,’ but unfortunately, delayed cars are today still a fact of life for elevator managers and farmers, now months after harvest wrapped up. Although we still have a severe lack of rail cars, the nature of the problem has changed in recent weeks, which I will explain in my testimony,” Public Service Commissioner Tony Clark told the committee chaired by Sen. David O’Connell, D-Lansford.]
Clark says North Dakota’s concerns with railroads are long-term and they involve both rates and service. He said, “The rate issue is one which we can address through a formal complaint before the STB (Surface Transportation Board, a federal agency). As you know, the (PSC) has been exploring this…”
The commissioner continued, “But as bad, if not worse, than overpriced service – is very poor to no service. A rate complaint case – as much work at it is – is something that you can actually fix with a favorable ruling from the STB. But service issues do not lend themselves to these same formal measures.”
Clark said relief needs to be ordered by federal courts, regulators or legislators. “Nonetheless, the (PSC) has always taken seriously its role as a representative of North Dakota’s shipping interests and will continue to forcefully press the case for needed rail reform measures,” he said.
Before Clark took to the podium, Brad Haugeberg, manager of Sun Prairie Grain, which has numerous operations in the area, told the committee that the industry could be in a win-win situation if rail cars came to the elevators on time.
“We have commitments for shipments. The lack of cars puts everybody at odds and they face huge economic hardships. We have geared up our facilities and we’re paying higher prices for shipping and the risks have increased. Every time we take steps to improve efficiency, problems crop up. Producers are frustrated.”
Haugeberg was asked by a committee member if trucks could help move some of the grain from the area. He replied, “If we put grain on trucks it would wreck the road system. We heavily rely on rail in North Dakota.”
Haugeberg said, “If grain could move like coal, it would be more efficient, but the diversity of crops we raise in North Dakota puts the state more at risk than other states.”
Clark said because of the crops it raises, North Dakota is more dependent on 26-car and 52-car trains than many other parts of the country. “Unfortunately, this means North Dakota is very dependent on a product that receives inferior levels of service compared to other regions of the country.
“Multiplying the problem, unlike other parts of the nation, vast regions of North Dakota have absolutely no alternative to rail shipping via just one carrier. That means the railroads know that regardless of how long the grain sits, eventually they will get the business,” the commissioner said.
Clark also said that Burlington Northern Santa Fe announced in December that it would implement a rate increase on the cars that were already shipped and paid for. “Had the railroad been running on time, the cars would have been shipped under the older lower rates,” he testified. He said it was simply because of the railroad’s own mistakes.
Clark said members of the PSC and the governor became heavily involved in pressing the case for attention to this matter at the federal level. Gov. John Hoeven and his staff, a number of grain dealers and Clark went to Washington, D.C., on two separate occasions to meet with officials of the STB, the USDA and BNSF corporate officers.
Clark said there has been some positive movement on some issues, but said there is still a lot of work to be done. “We were able to get the BNSF to rescind the portion of the rate increase that was going to be levied on late car orders and the railroad indicated it would be adding 6,000 cars to its fleet over the next few years.
“It was also agreed to dedicate an in-state ombudsman to trouble shoot problems as they arise for our grain shippers. Additionally, it committed to bringing late car orders current by the end of this month.”
The commissioner said less progress has been made on “What we see as an ‘impermissible differentiation’ in the level of service provided to shippers of different sizes.”