Western Railroad Discussion > Grain producers on the war path

The NY Times reports that grain producers in North Dakota are raising alarms about railroad failures to spot and move grain cars. Yje likely culprit, they say, is the increase in grain trains. CP and BNSF are fingered as the big offenders, which makes perfect sense in North Dakota.

>>But reports the railroads filed with the federal government show that for the week that ended Aug. 22, the Burlington Northern Santa Fe Railway — North Dakota’s largest railroad, owned by the billionaire Warren E. Buffett — had a backlog of 1,336 rail cars waiting to ship grain and other products. Another railroad, Canadian Pacific, had a backlog of nearly 1,000 cars.

For farmers, the delays often mean canceled orders from food giants that cannot wait weeks or months for the grain they need to make cereal, bread and an array of other products. “They need to get this problem fixed,” Mr. Hejl said. “I’m losing money, and my customers are turning to other sources as a result. I don’t know how much longer we can survive like this.”

This month, federal Agriculture Department officials said they were particularly concerned that Canadian Pacific would not be able to fulfill nearly 30,000 requests from farmers and others for rail cars before October. As a result, North Dakota’s congressional delegation and lawmakers in Minnesota and South Dakota have called on the Surface Transportation Board, which oversees the nation’s railroads, to step up pressure on the companies.<<

CP says some of the problem is due to phantom requests, as farmers order more cars than they need. BNSF agrees that they need to do a better job moving grain, but denies they favor oil.

http://www.nytimes.com/2014/08/26/us/grain-piles-up-waiting-for-a-ride-as-trains-move-north-dakota-oil.html

Ship it on the Milwaukee.... :)

Posted from Android

it's kind of shipping on the milw, but now it's called the tc&wr... dave, out.

North Dakota needs to put its money where its mouth is. How about engaging in some corporate welfare and help the CP pay for CTC and sidings? Or help upgrade the various regionals in the state? It would be for the good of the whole state in some way.

ND needs to think differently, as most of their production of oil, grain, sugar, etc. leaves the state by rail. This isn't the 20th century. Railroads aren't just scraping by, trying to get every possible load they can from their vast empire of branch lines. Those days are over.

No Burlington Northern SanteFe Railway. Been BNSF as long as Buffet has owned it. Both corp and railway.
Steve

If the UP had bought the Pacific Extension upon Milwaukee's failure, imagine how things would be different today.....

Posted from Android

That's a good question. My point is those industries are paying taxes to the state, so the state should give back a little to the hands that feed it, at least temporarily until more capacity is built. The oil and grain industries already pay hefty prices to CP and BNSF, and in return, CP and BNSF ration their service due to capacity constraints.

ND could probably manage a program to increase capacity in a more honest manner than other larger states, or the railroads themselves. It isn't New Jersey or Illinois.



Edited 1 time(s). Last edit at 08/26/14 09:35 by NYC6001.

Build a pipeline to move the grain! :P

Mike

Maybe the feds will decide they know how to do things better and take over the railroads. It will be just like your lousy health care then maybe. :)

Farmers are some of the biggest espousers of "free market" policies and conservative thinking, but whine so fast when they need something. I'm tired of it, and I've worked for farmers, and I heard it then, too.

Can't ship by BNSF? Then find another shipping method. That doesn't work? Then sell the farm and move to a better served location. The taxpayer is not obligated to help move your grain to some port for export, whereupon you pocket all the profit. It's called location, location, location i.e. choose farming in a region well served by many transport interests.

It is a unique situation. The oil traffic deluge was not really predictable in the time frame that capacity improvements require.

They need to bring UP into the the state somehow. Or build an open access railroad of their own that goes to the CN or UP. Don't scoff so fast. Think of all the highways that have been built in the last 50 years, like I-94 and I-29. What's the difference?

While we're on the topic of CP and North Dakota...

http://www.progressiverailroading.com/rail_industry_trends/news/Dakota-Gold-to-build-new-crude-oil-terminal-in-Bakken-Shale--41601



Allen

It's funny that one doesn't hear the oil industry or the sea container industry whining about the lack of tank & container cars, but yet there seems to be a problem with available cars for grain and other commodities. Could it be that with very little competition + the lack of investment by the RR's in buying new box and grain cars while concentrating on purchases of oil tank cars and well cars for the containers is where the real problem lies? Wasn't there a recent article announcing that the BNSF was buying newer tank cars to address the oil industry boom in "fractured" oil shipments? So where's the investment in grain & box cars? Yes siree, buy up the RR's competition, do away with those marginal trunk lines, run unit trains that favor the super large grain elevators & shippers while forgetting about investing the profits into more newer cars to handle the influx of grain and other commodities. The farming industry is still subsidized and we taxpayers are still "footing" the bill. Maybe the only leverage the farmers have is to pull together as a collective group and go about the task of buying their own railcars to ship their produce farm products and maybe look into the possibility of dealing with the ownership of a shortline RR to deal with the delivery & pickup of the railcars?

KI6WDX Wrote:
-------------------------------------------------------
> It's funny that one doesn't hear the oil industry
> or the sea container industry whining about the
> lack of tank & container cars, but yet there seems
> to be a problem with available cars for grain and
> other commodities. Could it be that with very
> little competition + the lack of investment by the
> RR's in buying new box and grain cars while
> concentrating on purchases of oil tank cars and
> well cars for the containers is where the real
> problem lies? Wasn't there a recent article
> announcing that the BNSF was buying newer tank
> cars to address the oil industry boom in
> "fractured" oil shipments? So where's the
> investment in grain & box cars? Yes siree, buy up
> the RR's competition, do away with those marginal
> trunk lines, run unit trains that favor the super
> large grain elevators & shippers while forgetting
> about investing the profits into more newer cars
> to handle the influx of grain and other
> commodities. The farming industry is still
> subsidized and we taxpayers are still "footing"
> the bill. Maybe the only leverage the farmers have
> is to pull together as a collective group and go
> about the task of buying their own railcars to
> ship their produce farm products and maybe look
> into the possibility of dealing with the ownership
> of a shortline RR to deal with the delivery &
> pickup of the railcars?


I have heard something about BNSF possibly providing some tank cars, but for the most part, the oil shippers themselves provide the rolling stock for their cargo. To some extent this is also true for grain cars, but the farmers rely to a much greater extent on railroad rolling stock -- and shriek when there isn't enough of it.

Toledopatch is right, I've been on both sides of this very topic before and these Ag shippers expect the railroads to have thousands of extra cars for singles or whole train sets ready to go with power and crews at their very whim. Biggest bunch of pre Madonna's I've ever met. What they expect is unrealistic. Each one of these grain sellers wants cars right now if the market is suddenly really not or they get some hot offer and then the rest of the time it's up to BNSF to have those extra cars and power just sitting around because there's no demand. Well the railroad refuses to have assets tied up like that and be inefficient with its assets.

toledopatch Wrote:
-------------------------------------------------------
> KI6WDX Wrote:
> --------------------------------------------------
> -----
> > It's funny that one doesn't hear the oil
> industry
> > or the sea container industry whining about the
> > lack of tank & container cars, but yet there
> seems
> > to be a problem with available cars for grain
> and
> > other commodities. Could it be that with very
> > little competition + the lack of investment by
> the
> > RR's in buying new box and grain cars while
> > concentrating on purchases of oil tank cars and
> > well cars for the containers is where the real
> > problem lies? Wasn't there a recent article
> > announcing that the BNSF was buying newer tank
> > cars to address the oil industry boom in
> > "fractured" oil shipments? So where's the
> > investment in grain & box cars? Yes siree, buy
> up
> > the RR's competition, do away with those
> marginal
> > trunk lines, run unit trains that favor the
> super
> > large grain elevators & shippers while
> forgetting
> > about investing the profits into more newer
> cars
> > to handle the influx of grain and other
> > commodities. The farming industry is still
> > subsidized and we taxpayers are still "footing"
> > the bill. Maybe the only leverage the farmers
> have
> > is to pull together as a collective group and
> go
> > about the task of buying their own railcars to
> > ship their produce farm products and maybe look
> > into the possibility of dealing with the
> ownership
> > of a shortline RR to deal with the delivery &
> > pickup of the railcars?
>
>
> I have heard something about BNSF possibly
> providing some tank cars, but for the most part,
> the oil shippers themselves provide the rolling
> stock for their cargo. To some extent this is also
> true for grain cars, but the farmers rely to a
> much greater extent on railroad rolling stock --
> and shriek when there isn't enough of it.

It's funny how old this tune is, and how it never changes. I often read books about when railroads were being pushed into grain producing regions. No sooner would a railroad arrive at a location than there would be complaints the railroad wasn't supplying enough cars to move the crop before it would spoil (get infested with bugs). The long and short of the issues is that the railroad cannot economically support a huge fleet of cars that may only be used during a very short shipping season. Farmers need to invest in storage options (elevators) or their own railcars. Several elevator companies tried to buy their own fleets of railcars back in the late 70's and early 80's, but eventually sold those cars to the railroads. That said, BNSF and CP really got hammered in the last season. It really wasn't the oil traffic that slowed them down, it was the huge harvest and a bitterly cold winter that brought trains to a grinding halt.

Ted Curphey
Ontario, OR

In Canada the grain car shortage problem is decades old and has largely been met by government agencies providing the supply (notably all those brightly-colored Saskatchewan and Alberta covered hoppers). That deals with part of the problem, and various arm-twisting measures are employed from time-to-time (like this past spring) to deal with other parts of the problem (bad winter, preference to haul oil, etc.). The grain seems to move.

Regarding the age of the grain hopper fleet - I understand it averages close to 30 years. New car production represents only between 5% and 10% of all new freight car production. Basically, the fleet is approaching the end of its service life. So probably the ag shippers will have to step up to do something about the situation. I don't see US state governments dealing with it like the Canadian provinces did.

NWRailfan - referring to farmers as "pre-Madonnas" conjures up an image that is unsettling to say the least!

Ray

Boxcars for grain were last used on light rail branch lines where the 55 and 70 ton car capacities were all the lines could handle.

Today there are not a lot of spare boxcars laying around since high scrap prices caused them to be cut up. Vacuum unloading at the ports is also just too slow.

Posted from Windows Phone OS 7

NWRailfan Wrote:
-------------------------------------------------------
> Toledopatch is right, I've been on both sides of
> this very topic before and these Ag shippers
> expect the railroads to have thousands of extra
> cars for singles or whole train sets ready to go
> with power and crews at their very whim. Biggest
> bunch of pre Madonna's I've ever met.

Aren't there any young grain growers? I mean, given that Ms Ciccone just celebrated her 56th birthday, surely at least some grain producers must be post-Madonna.

Just sayin'...

Elizabeth

Though the ones who know everything, say this isn't the rr's fault you are only partially correct. The BNSF has made it extremely difficult to move grain out of SD unless its in 110 car trains and was loaded at a BNSF approved/sanctioned elevator. RCPW and Dakota Southern both have shuttle loaded on their lines, but these are served exclusively with BNSF power and cars. If the BNSF does not provide the equipment, then the grain doesn't move. Currently there is not enough storage for this year's harvest due to the grain already in the elevators. No big deal until the harvest happens and the farmers have to truck the grain to NE, MN, IA and as far as MO. It takes more fuel and trucks to move this grain and that extra cost will be seen by the consumers in 2015/2016. No big deal today, but it will be in 12-18 months.