As spring planting rolls along (88% of U.S. corn planted as of May 25 according to USDA; 59% of soybeans) BNSF (Burlington Northern Santa Fe Corp.) is declaring “Mission Accomplished” and then some on delivery of fertilizer. The BNSF Railway is the second-largest freight railroad network in North America
The railroad stated it “fulfilled, and actually exceeded, the commitment we made to our agriculture customers on the delivery of fertilizer for the spring planting season,” in a podcast May 22. “In fact,” the podcast continued, “we loaded 54 trains — two more than our original commitment — and did so ahead of schedule. At 80 cars per train, and nearly 100 tons per car, we are delivering almost 8,000 tons of fertilizer per train.”
BNSF Ag Products Group Vice President John Miller said, “Traffic specific to ag was at its highest level since November of 2013.” He reported shuttle turns per month (tpm) were slightly higher from the previous week with the system wide average at 2.5 tpm. Shuttles heading to the PNW were at 2.6 tpm vs. 2.4 the prior week and to the Gulf were at 3.4 vs. 3.2 tpm.
Minor improvement was seen in past-due cars, but there are still 14,069 cars due to shippers system wide. Cars owed last week were at 14,621 and days late were at 27.9. Cars owed in North Dakota were 6,839 vs. 7,127; cars due in Minnesota were at 1,719 vs. 1,840; and cars due in South Dakota increased this week to 435 vs. 397 the prior week.
Cars owed in Montana increased to 3,258 vs. 3,125 the prior week. Shippers in Montana will be able to air their complaints to the Surface Transportation Board (STB) in early June. The STB Rail Customer and Public Assistant Program staff will hold meetings in Malta, Mont., on June 11, according to a May 23 announcement.
A shipper on the CPR on the U.S. side said he is still waiting for cars he ordered in February. He said they still need a total of eight 100-car units to load out wheat before spring wheat harvest or he will be unable to manage the new-crop harvest.
His sentiments have been echoed across some of the Northern Plains as concern grows that new-crop barley and winter wheat harvest will arrive and elevators will have nowhere to store those crops if the railroads don’t catch up.
CANADA PASSES BILL C-30
Bill C-30, the Fair Rail for Grain Farmers Act, was granted Royal Assent and became law in Canada on Thursday, May 29, just days before the original Order in Council, which set minimum targets for rail shipping, was set to expire.
“The new federal law will maintain minimum shipping targets as well as pave the way for enhanced monitoring and data collection, expanded limits for inter-switching between companies, which will allow for increased competition and level the balance of power between shippers and railways by extending powers to the Canada Transportation Agency (CTA) to regulate terms of Service Level Agreements,” said DTN Canadian Grains Analyst Cliff Jamieson. “The CTA will be allowed to arbitrate disputes between shippers and the railroads as well as levy damages for failure to meet obligations. The Bill also included amendments to the Canada Grain Act which increased powers of the Canadian Grain Commission to regulate and arbitrate grain contracting issues between producers and grain companies.”
Jamieson explained, “This was the second blow for the railways this week; earlier in the week the Canadian Canola Growers Association (CCGA) filed a Level of Service Complaint against Canada’s two railways with the Canadian Transportation Agency. Sections 113 through 116 of the Canada Transportation Act state that railways shall provide an ‘adequate and suitable’ level of service to all products requiring movement, while the argument is that the railways failed in their obligation when it came to the movement of prairie grain and oilseeds this crop year. Rick White, CEO of CCGA, is on the record stating that a win for the agriculture industry could require the railways to add to their locomotive or railcar fleet, increase staffing and even lead to increased investment in railway track.”
In between the announcement of the service complaint and Bill C-30 becoming law, CN Rail took to the media to promote its current performance, perhaps to calm the jitters of their investors or lending community, Jamieson reported. “An average of 5,500 cars per week was moved in May, 50% more than the eight-year average and 38% better than the company’s best May ever. The goal for this summer is 6,000 cars per week. We have done exactly what we promised, without the need for regulatory intervention,” said CEO Claude Mongeau.
In reality, it did take intervention and the threat of fines to spur the railways into action, Jamieson said. “Mongeau fails to acknowledge the damage to both grain producers and customers as a result of movement of grain on the railway’s schedule as opposed to when needed,” he said.
ICE ON LAKE SUPERIOR STILL HANGING ON
NOAA reported on May 28 that Lake Superior was 1.3% ice covered, slightly lower than the Memorial Day measurement of 1.7%. Much of the ice has pushed into shore and Environment Canada warned of “rotten very thick lake ice” near Duluth, east of the Apostle Islands and other locations in far southern Lake Superior, in what it labeled “an unusual presence of ice over the lake.”
Ship traffic on the St. Lawrence Seaway is not bothered by ice, but on Tuesday, the freighter Federal Kivalina, a 656-foot Hong Kong-flagged vessel loaded with canola seed lost steering. The crew dropped three anchors in an effort to slow its drift and the ship eventually ran aground. The seaway was closed to all traffic until the ship could be moved to safety. There were reports that 18 ships were stopped from passing through the area. On Thursday, May 29, the USCG released a statement saying, “Upon the safe removal of the Federal Kivalina, the SLSDC reopened the seaway to all vessel traffic, which had been shut down for more than two days.” The crippled ship was removed from its resting spot near the Thousand Islands Bridge in northern New York by a contracted salvage crew and two tugs from Montreal.
