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Dalrymple tells Surface Transportation Board late shipments cost ND farmers 'hundreds of millions of dollars'

FARGO - The U.S. Surface Transportation Board made history in North Dakota on Thursday, holding its first field hearing in the state, and packing in a crowd of testifiers and onlookers concerned about whether railroads can make the trains run on ...

FARGO - The U.S. Surface Transportation Board made history in North Dakota on Thursday, holding its first field hearing in the state, and packing in a crowd of testifiers and onlookers concerned about whether railroads can make the trains run on time.

Board Chairman Daniel R. Elliott II, a former transportation union lawyer, told the audience in Fargo that some railroad issues have gotten worse since an April 10 hearing in Washington about fertilizer shipping. He said he is looking for solutions to allow shipping of the 2014 crop, even as the agricultural industry ships the 2013 crop.

The three-member board heard from a long list of participants at the hearing, with a show-and-tell by railroads, and an expected litany of concerns and warnings.

North Dakota Gov. Jack Dalrymple quoted a recent letter from the Wilton (N.D.) Farmers Union Elevator Co., which says it is fighting for survival, sitting five months behind on railcars.

Dalrymple said the hearing is “about the individual elevators and farmers out there who have no place to go, no recourse, no power over the situation, except for you.”


He said the impact of late shipments has been in the “hundreds of millions of dollars” for North Dakota farmers, and the damage is continuing. He noted that the North Dakota State Mill and Elevator in Grand Forks shut down 25 times this year because of delays in rail shipments.

Sen. John Hoeven, R-N.D., said Burlington Northern Santa Fe Railway has instituted plans to invest in and improve its service, but Canadian Pacific Railway has not provided sufficient information.

Rep. Kevin Cramer, R-N.D., also criticized CP for lack of transparency and said “bad news” is better than insufficient news. He said he is concerned about impacts of fines imposed on CP by Canada for late cars.

Cramer cautioned the Surface Transportation Board of “over-reliance on emergency powers,” however, saying BNSF and CP should work on the problems without added government regulation. Others who offered testimony later disagreed.

Money, manpower

Stevan Bobb, executive vice president and chief marketing officer for BNSF Railway, said “nothing is more important than restoring the fluidity” of the market. But Bobb warned against the suggestions to institute policies allowing other railroad companies or private cars to use BNSF tracks, or to prefer some regions or commodities over others.

“It will not create more capacity. It will reduce capacity and customer volumes will be negatively impacted,” he said.

Increasing regulatory pressure to target certain commodities or regions will backfire as “the chosen” commodities move at the expense of all others, he said.


Instead, he suggested the board assess the total volumes the railroads are handling and hold the companies accountable for their capacity to increase the volume.

North Dakota represents 36 percent of BNSF’s new growth in 2014. Traffic into North Dakota has increased 51 percent since 2009, and traffic leaving the state has increased 193 percent. BNSF handles roughly 80 percent of the rail shipments of grain out of North Dakota.

As of Aug. 31, Bobb said the railroad has added 339 locomotives out of a goal of 500 for the year, and had hired 2,419 employees of the planned 3,000 in its train, yard and engine service, as well as another 2,305 engineering and mechanical staff - exceeding its goal of 2,000 for the year.

John Brooks, vice president for bulk market products for CP, pointed out that CP handles only 20 to 23 percent of the region’s agricultural shipping. He said CP has moved 5 percent more than the three-year average. He said there are 6,200 open requests more than 14 days late.

Brooks said the company’s new train ordering system has been collaborative, instituted in the past two months because of pressure from elected officials. He said politicians’ allegations and implications that CP has been strong-arming or bullying elevators to cancel orders are not fact-based.

“We have not forced anyone,” he said.

Brooks said CP will invest $400 million between Canada and St. Paul, Minn., and is trying to hire 400 new employees. He said $150 million will be spent in North Dakota.

‘Sob stories’


North Dakota Public Service Commissioner Randy Christmann asked the board not to listen to the “sob stories” from the railroads about their need to protect information. He said the movement of grain in the nation should be available to the public.

Doug Goehring, North Dakota agriculture commissioner, said a large harvest is a source of anxiety, trapped in the system in elevators or on farms.

“I’m more disturbed when I hear from individuals who have not seen railcars in months,” Goehring said.

Just as concerned was Minnesota Agriculture Commissioner Dave Frederickson, who said a soybean study indicated farmers lost more than $109 million.

U.S. Rep. Collin Peterson, D-Minn., said there is concern about the fall, but calls of concern have abated some at his offices.

North Dakota state Sen. George Sinner, a Democratic candidate for Congress, said he’s heard of three CP shippers building on the BNSF because the CP shipping is “so abysmal.” He asked that the Surface Transportation Board use its emergency powers to open rail lines to other rail lines, citing American Crystal Sugar Co.’s problems getting coal into its plants as an example.

“We know if we lose those sugar plants in this valley, we have serious problems,” Sinner said.

Brian Schanilec, president and manager of Forest River (N.D.) Bean Co., representing Northarvest Bean Growers Association, said the rail shipments for some edible bean growers can be five months behind schedule, and is a crisis that threatens ag exports - the “economic backbone of America.”

Schanilec asked for the board to demand more knowledge about CP’s cars in the U.S. fleet, and the disposition of them.

“Do we need an emergency service mandate from the STB?” Schanilec asked, adding that he hopes enough improvement is made so it won’t be necessary.


Related Topics: AGRICULTURE
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