Midwest railcar shortage debate shifts to DC

Farm Forum

SIOUX FALLS (AP) — Midwestern lawmakers and farmers are shifting the attention of a locomotive and railcar shortage problem to Washington this week with legislation, a committee hearing and meetings with decision-makers.

The national Surface Transportation Board held a hearing last week in Fargo, North Dakota, because farmers and some politicians have said increased crude oil and freight shipments from the state’s western oil fields are largely the cause of shipping delays across the region that have led to grain to pile up. Railroads have denied they favor one sector over another.

South Dakota Sen. John Thune, the ranking Republican on the Senate Committee on Commerce, Science, and Transportation, said Monday that he and committee chairman Sen. John Rockefeller, a Democrat from West Virginia, are introducing legislation to give the Surface Transportation Board more efficiency and authority, in hopes of easing the problem.

Among the proposed changes: increase the board’s authority so it can do its own investigations instead of waiting for a complaint; improve rate review timelines; and increase the number of members from three to five.

Rockefeller and Thune also led a commerce hearing on Wednesday that looked at rail service backlogs nationwide.

“We think right now, coming into the harvest and knowing the rail issues ahead of it, it’s a good time to shine the light on these issues and make the railroads more accountable,” Thune said.

A board spokesman said the agency could not comment on the pending legislation.

Farmers Union members from around the country are in Washington this week for the National Farmers Union 2014 Fly-In and plan to press the rail issue with members of Congress and staffers in the U.S. Department of Agriculture and White House. South Dakota Farmers Union President Doug Sombke and other state presidents from Corn Belt states are also meeting with the chairman of the Surface Transportation Board.

With commodity prices low because of bumper crops, added costs due to the railcar shortage are further eroding profits, including from fines imposed on some farmer-owned cooperatives for not making grain deliveries on time, Sombke said.

“It should really be imposed on the railroad that did not deliver it on time, not the grain deliverer,” he said.

In testimony that the BNSF Railway provided before the Surface Transportation Board (STB) in Fargo, N.D. last week, the railroad says it has moved an all-time record volume of grain out of North Dakota this year. The railroad also reports that in four out of the last five months of 2014, ag volume shipped in the four-state region on BNSF has surpassed previous peak levels.

For North Dakota, in particular, traffic in and out of the state has increased 144 percent on BNSF since 2009. Last year, North Dakota represented 20 percent of all new volume on the U.S. rail network.

While it is experiencing continued strong volume growth this year in the state, in its testimony BNSF reports that due to BNSF’s efforts past due car orders for ag customers have steadily decreased with less than 1,000 outstanding past due orders in North Dakota from the high of 8,164 in March. It also details that shuttle trips per month to the Pacific Northwest, where most grain products in the region are shipped, have hit the goal of 2.5 trips per month for the last four weeks.

BNSF says it is ready for this year’s harvest and will have the resources in place to move record bushels when the market demands it.

The railroad says it is offering more capacity for the movement of grain than ever before and will run the highest number of shuttles ever during the peak season of October through March. BNSF expects a large crop this year, with its grain volume transportation capability to increase by 10 to 15 percent as a result of the increased shuttles it is offering.

Information about BNSF’s testimony, improvements, and plans for harvest was provided by BNSF and added to this Associated Press story.