Business
2:29 pm
Tue April 8, 2014

Train Shortage Creates Ag Crisis

As the weather warms up and farmers prepare to get into the fields, some of the harvest from last season is still in storage and in piles. Bath, South Dakota farmer Dennis Jones says the situation has reached a crisis level because railroad equipment and crews aren’t available to haul grain to market because of the demands in the Bakken Oil Fields.

Soybeans pile up at grain elevator
Credit Kealey Bultena / SDPB

On Tuesday morning he invited area farmers to discuss solutions to the problem. Jones will take their ideas to a National Surface Transportation Board hearing in Washington, D.C. on Thursday. Jones wants President Obama to issue an executive order requiring BNSF Railway bring needed crews, locomotives and equipment to the upper plains in order to move harvested grain. Dennis Jones joined Dakota Midday to discuss the problem.

Dakota Midday interview with Dennis Jones

Amy Casas, Director of Corporate Communications for BNSF Railway, said the company is expanding capacity and bringing in extra crews and equipment to increase fluidity to the system and work down past due orders. Her complete statement is below.

BNSF is not favoring crude shipments over other shippers like agriculture. This is a case of rapid growth for several commodities using parts of our railroad network that hadn't previously seen that kind of volume. While our network can manage some excess demand, the added demand has come during one of the hardest winters on record in terms of low temperatures and snowfall. Low temperatures and snowfall are especially difficult for a railroad's operations.

The extreme cold and the record snowfall in Chicago were the largest factors.  Large snow accumulations make interchanging traffic with the other railroads very difficult. Then in several locations in our Northern Corridor, we experienced a record number of days where the temperatures were below minus 15 degrees. To deal with those conditions, we have to run shorter trains - and carry less freight -to address the impact the weather has on the airbrakes of our trains. At extreme temperatures, our employees cannot be outside for more than 20 minutes at a time, before having to come indoors for 10 minutes. 

A train leaves a crude oil loading terminal near Epping, ND
Credit AP

Last year, there were 800,000 new units carried on All Class I U.S. railroads.  BNSF had 50 percent, or 400,000 units, of that growth. We saw growth across several commodities last year. 

- A compressed grain harvest brought much higher demand for moving grain.

- Domestic intermodal - bringing trucks off the highway to rail - saw significant growth.  Domestic and international intermodal makes up about half of our traffic.

- Crude did grow but it represents about 4 percent of our total traffic.

- In addition to growth in crude oil, we also transported more of the materials associated with unconventional drilling - like sand.

- Coal transport also increased as stockpiles decreased. 

 The result is slower velocity, which then impacts our ability to have either people or locomotives where and when we need them.

The good news is that there is nothing systemically wrong with the system that cannot be corrected. We did anticipate growth and have been expanding capacity more quickly than ever with record capital investments in 2013 which will continue in 2014.  Of our $5 billion capital plan for 2014, approximately $900 million will be spent on expansion and maintenance on the Northern Corridor.

BNSF believes agriculture products will continue to be a vibrant growth industry and we are investing and expanding capacity to support that growth. This added capacity will help all the commodities that make up the traffic mix in the Northern Corridor.

We are taking aggressive short-term action in over-resourcing the railroad. Bringing in extra crews, locomotives and equipment to increase fluidity to the system and work down the past due orders. While we do expect some short-term impacts to our business due to the service interruptions, we do expect to recover.

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