Rail Car Delays Prove Expensive to Grain Shippers, Farmers – DTN

    Rail delays are expensive for grain shippers and farmers.

    A North Dakota State University study quoted by the May 22 USDA weekly Grain Transportation report stated, “based upon basis values … North Dakota farmers have lost nearly $67 million this year because of rail shipment delays and could lose an additional $95 million if the delays persist.”

    That estimate only focused on spring wheat, corn, and soybeans, USDA reported. Other crops not examined include durum wheat, barley, sunflower, canola, field peas, lentils, dry edible beans, flax, oats, and food grade soybeans.

    “In addition,” USDA stated, “losses by agricultural processing businesses, such as those producing refined sugar, ethanol, dried distillers grains, and high fructose corn syrup, among other products, are not included in the estimate.”

    Still, things are getting better. At least, that’s what BNSF reported in its May 16 update. “The past week we have seen positive gains across the network and continue to remain focused on improving service and velocity,” the railroad stated.

    BNSF is especially proud of progress on getting fertilizer to the Northern Plains. “We continue to make good progress in our delivery of fertilizer, shipping 94% of the targeted volume and expect to reach our commitment of shipping 52 trainloads within the next few days.”


    However, if you talk to grain elevators waiting for cars, they will more than likely dispute the comment “positive gains” as many of them continue to wait for empty cars to ship grain. Elevators in western North Dakota have reported they are owed up to 100 to 500 cars that are now two to three months late in being placed. Some elevators still cannot buy spot grain and will only take in contracted grain because they are running out of space. Many elevators are concerned the backlog will not be fixed before the next harvest, beginning with winter wheat and barley in late July/early August.

    The total amount of cars BNSF owed system wide increased last week to 14,621 from the prior week at 14,613, as reported by John Miller, BNSF ag products group vice president, on May 16. Once again, North Dakota has fallen behind with 7,127 cars due vs. 7,110 for the week of May 9. Soft tracks and line repairs along the northern tier of the BNSF have exacerbated the problems with placing and moving cars in the Northern Plains.

    Montana cars due totaled 3,125 vs. 3,163 a week ago; Minnesota had 1,840 cars due vs. 1,899 a week ago; and South Dakota was the winner for the week with cars due at 397 vs. 682 the prior week. USDA reported that BNSF said “it should make a significant reduction in past-due cars by July.”

    Shuttle turns per month were unchanged to the PNW at 2.4 TPM. For the third week in a row, the BNSF in their weekly COT (Certificates of Transportation) auction offered five, 110-car, year-long shuttles beginning for October 2014. The winning bids for the May 19 auction were slightly lower than the previous auction with shuttles purchased at $1,651,000-$1,762,101, which equates to $665 to $667 per car for two turns each month for one year usage.

    Shuttles the prior week were bought for $1.7 million to $1.8 million each, which equates to $675 to $682 per car for two turns each month for 12 months. The BNSF is currently not offering any units or singles for sale in their weekly COT auction.

    The Canadian Pacific Railroad is making continued progress toward improved service levels, according to its website. “For the weeks ending May 9 vs. May 2, fluidity improved overall with terminal dwell dropping 10% and train speeds have levelled out across the network,” the website stated. Even still, U.S. shippers serviced by the CP say they are “months” behind in placements of smaller units and single cars.


    As of May 20, NOAA reported that the Great Lakes total ice cover was at 2.5% with Lake Superior the only lake left with ice. While the ice is not hampering any vessels from moving in and out of the Twin Ports of Duluth/Superior, there is still some catching up to do due to the late start of the shipping season. The Duluth Shipping News reported that “steel mills on the lower lakes on the lower lakes are hungry for iron ore pellets that were delayed due to the late start.”

    The only delays recently affecting grain loadings has been rain, which causes elevators loading grain to stop loading. Fog has also been a problem and has caused salties to anchor off the port entrance until it lifts.


    After a rough start to the shipping season this spring due to ice on much of the upper Mississippi River system, grain barge movement for 2014 is on an uptrend since the end of March. An increase in traffic on the Ohio and Arkansas rivers helped offset the lack of barge traffic on the Upper Mississippi and Illinois rivers during the first quarter of the year.

    Barge movements on the river through the week of May 17 totaled 705,932 tons, 1% lower than the prior week, but 84% higher than the same period last year. USDA said, “The National Weather Service reports minor to moderate flood conditions on the Mississippi River from Davenport, Iowa, (Locks and Dam 15), to Winfield, Mo., (Lock and Dam 25). Continued rainfall in this area may elevate river levels and cause some delays in barge shipments.” Delays occur in high water areas because barges are required to slow down as “no wake” requirements are enforced.

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