Rail service smoother for farmers

Farmers and grain handlers in Minnesota are noticing improved railroad service, according to a group that has been sharply critical of rail companies for delays, congestion and sky-high shipping rates during the past year.

A new survey of 42 grain handlers in Minnesota, North Dakota, South Dakota and Nebraska is reporting faster rail service and less waiting time for rail cars during the past few weeks, compared with the previous 10 months.

"Rail service for the 2014 harvest has thus far been a pleasant surprise," said Mike Steenhoek, executive director of the Soy Transportation Coalition, which conducted the survey. "There are certainly opportunities for improvement moving forward, but railroads serving this particular area of the country should be commended for their performance up to this point."

The railroads include Union Pacific Corp., BNSF Railway Co., and Canadian Pacific Railway.

The Iowa-based coalition is comprised of soybean boards from a dozen states, including Minnesota, and two national organizations. It and other groups have lambasted railroads for long backlogs and skyrocketing freight prices during 2014, and accused them of giving preference to oil shipments over cargoes of coal, grain, consumer goods and other items.

The coalition also published a national report card last month ­ranking the eight largest railroads, listing Union Pacific at the top, BNSF seventh, and CP last. The rankings were based on the past year that ended in late September, said Steenhoek, and did not reflect railroad performance during the past two months of harvest.

About 70 percent of the grain ­handlers in the new survey reported that railroad "cycle times" for 110-car "unit trains" are faster than a year ago. The long trains, or shuttles, load entirely at single locations and move corn, soybeans and wheat from Minnesota, North Dakota and Montana to ports in the Pacific Northwest, much of it for export to Asia.

However, 60 percent of the grain receiving facilities said they had experienced some rail service delays.

BNSF took much of the heat from frustrated farmers and elevator operators this year because of its dominance in the northern corridor states.

John Miller, BNSF group vice president of agricultural products, attributes the recent improved service to more resources. The railroad spent $5.5 billion this year, he said, and much of the investment was along BNSF's northern route. It installed 55 miles of double track west of Minot, N.D., he said, and added or extended several sidings in North Dakota and Montana to increase "velocity and fluidity" on the tracks.

Those projects wrapped up in early November, Miller said. Systemwide, the railroad added more than 500 new locomotives and more than 6,000 workers during the past year, he said.

"Since Sept. 1 we have moved record numbers of volumes to the Pacific Northwest in ag," Miller said. "We've never hauled less than we have this year."

But Miller said the low prices did not mean less pressure on BNSF, and demand for grain shipping has remained strong.

"We moved record volumes because the crop is just that big," he said, and the railroad expects to spend $6 billion in improvements and set more shipping records for grain in 2015.

The soybean coalition is surveying the grain handlers as part of a research project with the University of Minnesota to learn about the availability, cost and delay times for rail cars, and to gauge the amount of storage space in grain elevators.

The 12-question survey will be repeated every two weeks from early November to March 2015. The ­latest survey covered the period from Nov. 21 to Dec. 5. The project will ultimately identify and estimate the impact of rail service on the profitability of each state's agricultural industry and individual farmers.

Bob Zelenka, executive director of the Midwest Grain and Feed Association, said the survey confirms what he's been hearing anecdotally from some of his association's members.

Miller said that moving the largest quantities of grain soon after harvest on long westbound trains has been a priority, and that some of the shorter and mixed cargo trains move east or south through Chicago and other congested hubs. "You haven't seen the same velocity in pickup that you have going west," he said, "but those will gradually take place over the next several months."

Zelenka said the true test will be in the next few months, if grain prices improve and demand for shipping escalates even more.

"The question that still remains is when the corn market comes back and you get that added volume to an already congested rail network, will they be able to handle it better than they did last year," he said.