Canadian Pacific and BNSF get poor marks for service

Farm Forum

Two railroads that serve grain farmers and shippers in Minnesota and the Dakotas have received the lowest rankings in a national report card of railroad performance.

Of the seven largest rail companies graded by shippers across the country, BNSF Railway Co. came in sixth place, and Canadian Pacific Railway (CP) finished last.

Mike Steenhoek, executive director of the Soy Transportation Coalition, which conducted the survey, said last year’s report card was relatively positive, but this year’s version had lower average scores in all areas.

“Each of the individual railroads had a lower score this year than they did last year, so there’s widespread frustration with the condition of rail service in 2014,” he said.

The coalition includes soybean board representatives from 12 states, including Minnesota, and two national groups. It advocates for grain transportation that is reliable, competitive and cost-effective.

BNSF officials said in a statement that they “clearly understand that for much of 2014 we did not meet the expectations for service of our agricultural customers.”

They said grain shipments to the Pacific Northwest have grown significantly in recent months. “To date, we are moving record volumes of corn, wheat and soybeans, originating from the four states of Montana, North Dakota, South Dakota and Minnesota.”

CP manager of media relations Andy Cummings said in a statement that his company is reviewing the coalition’s survey. “We will work directly with our customers to resolve transportation issues as they arise,” he said.

Steenhoek said the rankings came from agricultural shippers of various sizes, including traditional grain elevator owners, regional cooperatives and large agribusinesses that handle grain. Since 2010, they have been asked the same 11 questions about the railroads’ ability to provide on-time performance, customer service and information about costs and marketing. Each question uses a 1-10 scale with 10 being the highest.

Participation in the survey is voluntary and confidential, but Steenhoek said respondents are railroad customers for the overwhelming majority of soybeans and corn shipped each year in the U.S.

In previous report cards, BNSF ranked first overall in 2010 and second in 2011 and 2012, but fell to fourth place in 2013 and sixth in 2014.

Canadian Pacific has been rated as the lowest performing railroad for each of the past five years.

The survey was mailed in early September and returned in October, so Steenhoek said it reflects service during the past year, but not the 2014 harvest.

Last winter’s severe weather caused problems and delays that may partly explain the lower scores that all railroads received collectively, he said, but another factor specific to northern states seems to be increased crude oil shipments from North Dakota.

“Crude oil development is really concentrated in a pretty defined area of North Dakota, and that area happens to be disproportionately served by BNSF and Canadian Pacific,” he said. “Clearly some customers that responded to the survey were very frustrated with the service provided there.”

Union Pacific Railroad received the top 2014 performance ranking, followed by Norfolk Southern Railway, CSX Transportation, Canadian National Railway, and Kansas City Southern Railway.

The report card is the latest example of dissatisfaction that has been simmering for much of the past year. Grain, coal, consumer goods, ethanol, taconite and passenger travel have been affected. Shippers have complained that poor rail service has cost them and their customers hundreds of millions of dollars in lost time, late supplies and higher prices.

Field hearings, calls and letters from top elected officials, and research prompted federal regulators to issue an order on Oct. 8 for large railroads to report performance details each week, including train speeds, dwell times at terminals, weekly cars on line by car type, weekly total number of loaded and empty cars that have not moved in more than five days, grain cars by state and cargo, and number of late days for all outstanding grain car orders.

Although it ranked sixth overall in the 2014 report card, BNSF came in third on a pair of questions about its website information. CP was ranked last on each of the 11 questions.

Both railways have previously denied that they have given oil shipments preferential treatment, and have said rising freight volume from all sectors contributed to congestion and delays. BNSF said it has added locomotives, crews and new track in strategic areas, and has caught up on backlogged grain shipments in Minnesota.

Steenhoek said he hopes that rail service for farmers and grain shippers will be better for the 2014 harvest.

“The system’s going to be more challenged now that the corn harvest is completed and we have a high volume crop,” he said. “The telltale sign of whether the railroads are up to the task will really be now, moving forward.”