(The following story by Jeff Zent appeared on The Forum website on August 23.)
FARGO, N.D. — North Dakota’s farmers and grain dealers can expect faster railroad service this harvest season, officials with the state’s two major railways say.
Burlington Northern Santa Fe Railway and Canadian Pacific Railway say they are revamping their shipping strategies and making equipment upgrades to curb costly delays that plagued farmers and grain dealers in getting their 2003 crops to market.
State officials, agriculture leaders and grain dealers, who have long been at odds with the railroads, are skeptical.
The BNSF and Canadian Pacific have their own unique challenges in providing the service that North Dakota’s farmers and grain dealers deserve, Public Service Commissioner Tony Clark said.
Like last year, North Dakota farmers are expected to harvest a large wheat crop, setting the stage to again magnify the railways’ shipping problems, said Neal Fisher, administrator of the North Dakota Wheat Commission.
The railways were overwhelmed by North Dakota’s 317-million-bushel wheat crop last year, and backlogs quickly included late season crops like corn and soybeans.
Grain dealers piled a record 18 million bushels of wheat, soybeans and other crops on the ground because the BNSF and Canadian Pacific couldn’t haul it away fast enough, Clark said.
“The stars are kind of lining up again for the same situation as last year,” Fisher said. “That’s the kind of thing that will keep you up at night.”
The delays are more than an inconvenience. They can cost farmers and grain elevators a great deal of money.
The Grafton Farmers Cooperative elevator was filled with 600,000 bushels of wheat at this time last year, while its operators waited for three 27-car BNSF trains scheduled to load the previous week.
Without space, elevator manager Todd Dravland had to pass on buying between 200,000 and 400,000 bushels of wheat.
Dravland estimated the lost business cost his elevator as much as $40,000 in revenue.
Some Minnesota elevators in the Red River Valley experienced short delays during last year’s harvest. Minnesota farmers are served by three major railroads and river barges.
This year, the railways had more time to prepare for North Dakota’s harvest rush, with many parts of the state’s wheat crop maturing about three weeks late, Fisher said.
BNSF trains are currently running about six days early in hauling away what’s left of the Maple River Grain Elevator’s 2003 crops, said Sid Mauch, manager of the Proper, N.D., elevator.
“So far, so good,” Mauch said. “I think they have a better handle on it now.”
North Dakota’s late wheat harvest could inevitably worsen any shipping delays, Fisher said.
The nation’s farmers are expected to harvest a bumper corn crop this year, estimated at about 11 billion bushels.
“Our demand for railcars, that’s going to run smack dab into that corn crop,” Fisher said.
As Clark, the public service commissioner, sees it, BNSF’s priorities are a big part of North Dakota’s problems.
The Texas-based railway, with 32,500 miles of track running through 28 states and two Canadian provinces, is constantly juggling its trains among thousands of customers.
“Up here where we have only two main railways, we’re more of a captive market,” Clark said. “They make other parts of the country, where they have more competition, a priority.”
About 70 percent of all the crops shipped from North Dakota by train are loaded onto BNSF hopper cars, said Steve Strege, executive vice president of the North Dakota Grain Dealer’s Association.
Timely service is just one of several contentious issues between the state and BNSF. The Public Service Commission is building a legal case against BNSF, in hopes of cutting shipping costs.
BNSF, the nation’s second largest railway, was slow in responding to the state’s shipping needs from early on in the 2003 harvest, and it lagged behind until long after farmers put their equipment in winter storage, Strege said.
Many elevators along the state’s BNSF tracks waited on railcars that sometimes arrived as many as 50 days late.
The Canadian Pacific, which operates about 11,000 miles of track in Canada and another 3,300 track miles in the Upper Midwest, was better prepared to meet farmers’ immediate shipping needs last year, Clark said.
Through most of harvest, elevator operators along the Canadian Pacific line reported getting their railcars within about a week of their scheduled arrival.
Then, in mid winter, a series of problems began to slow Canadian Pacific trains hauling crops destined for the Pacific Northwest.
Avalanches in the Canadian Rockies and delayed shipping exchanges with the sluggish Union Pacific Railroad near Cranbrook, British Columbia, triggered a backlog that continues today, Clark said.
The Canadian Pacific has largely rebounded from its shipping backlog in North Dakota and has taken steps to curb delays during the 2004 harvest, said Jim Clements, the railway’s director of grain.
The Canadian Pacific is upgrading three “passing tracks” along its single line, which handles east-and-west traffic to the Pacific Northwest, company spokeswoman Laura Baenen said.
The railway believes it also will speed up its shipping cycles by dividing its trains into two separate operations this year. One will handle shipments to Duluth, Minn., Minneapolis and Chicago, while the other will travel to and from the Pacific Northwest, Baenen said.
The new traffic flow system will be more efficient than sending all trains in all directions, she said.
Canadian Pacific continues to add new locomotives, railcars and workers to help meet shipping demands. The railway added about 1,800 new hopper cars last fall, she said.
“We’re trying to better manage the flow and not promise more than what we can reasonably deliver,” she said. “We won’t oversell.”
BNSF plans to have its railcars parked at North Dakota elevators within 10 days of their order, company spokesman Gus Melonas said.
The railway will speed service by taking 11,000 railcars out of the company’s guaranteed service programs and offering them to regular-rate shippers.
The reorganization plan worries Strege, who represents the state’s grain elevators.
BNSF plans to cut rail cars from the programs that offer grain dealers the most reliable service, he said.
The new service program will provide regular-rate shippers faster service than what they currently get through the more expensive guaranteed service programs, BNSF officials said.
This year, BNSF will invest $250 million in new equipment, including 1,500 new large-capacity hopper cars to better handle the 2004 harvest, Melonas said.
BNSF also appointed Jonathan Long, a longtime BNSF employee, as ombudsman to work with North Dakota grain dealers in solving their shipping problems, he said.
Pledges from railroad officials haven’t convinced Keith Brandt, manager of the Plains Grain and Agronomy elevator in Enderlin, N.D.
Bountiful crops in North Dakota and an expected bumper corn crop in other states would again stretch the railways’ resources, he said.
“I think they’ll be in worse shape than a year ago, particularly the Canadian Pacific,” he said.