(The following column by Frederic Smith appeared on the Bismarck Tribune website on January 15.)
BISMARCK, N.D. — It was good of Matt Rose, president of the Burlington Northern and Santa Fe Railway, to come to North Dakota from Texas to take his medicine over late delivery of grain cars to elevators, the worst that one elevator manager says he has seen in 22 years.
Rose promised that the railroad will try to improve service, which was welcome, and will assign an employee — an “ombudsman” — to be on the ground in North Dakota to handle shipper problems.
Railroads used to have somebody like this in nearly every town. Of course, railroads used to be going broke, too, so we can understand why station agents may have had to go. Today, the Canadian Pacific Railway — former Soo Line — gets credit for having two “agents” in North Dakota, so you could say it was about time BNSF gave itself one.
Much of the rest of what Rose said needs to be taken with a grain of something not wheat.
He gets only limited credit, for instance, for rolling back a $100 rate increase on cars promised before Dec. 16 — the date the new rate went into effect — but not yet delivered. Rose calls this an “olive branch.” Farmers and elevators who are already being penalized by late cars will say, “I should hope so.”
Does Rose realize what he is saying when he calls North Dakota service not so bad but only “reflective of the overall network”? That is, the service everywhere else is as bad as it is here. That’s a funny boast for a railroad president, but it helps explain why railroads today are largely reduced to hauling “captive” bulk commodities and low-profit containerized freight. Otherwise, “If you’ve got it, a truck brought it,” as the truckers like to say.
Rose is right in assigning a certain amount of blame to a big harvest around the Midwest and West and the desire of everybody to sell at once. Railroad locomotives and cars are expensive, and truly, a railroad cannot afford to “build the church for Easter Sunday” any more than other businesses can. (You can include grain elevators in that. For plenty of them, grain on the ground is an annual event.)
Still, railroads have been at this game for a long time, 175 years, and ought to have the worst kinks worked out by now. They used to be able to plead poverty, but that no longer applies. Anyway, North Dakota pays a premium price for grain service, compared with states in the lower Midwest — even if those rates are no higher in constant dollars than 20 years ago — and ought to get some service in return.
And why should BNSF’s service be so much worse than CP’s? The CP is reportedly running only two weeks in arrears with delivery of empties in North Dakota, versus two months for BNSF.
Rose hints that one solution would be for shippers to own their own cars. Many shippers do, only to have them kidnapped for months at a time by railroads that would rather pay per diem on them than buy their own. Besides, the “going” North Dakota elevators have already invested a fortune — to them — in building capacity to take advantage of 26-car, 52-car or shuttle trains. Now they’re supposed to buy the cars, too? How about locomotives?
If, as Rose complained, BNSF gets more flak from North Dakota than from any of its other states, he should consider the possibility that we are more imposed upon, with service as bad as anybody’s but at that premium price.