The BNSF Railroad announces today it will "increase velocity and efficiency for fertilizer shipments," in an effort to ensure dealers and farmers have enough fertilizer on hand to get the crop started. Farm leaders from the Dakotas and Minnesota met today with U.S. Dept. of Transportation officials to discuss rail transport of commodities.
Farmers claim the rail system favors crude oil shipments over grain noting that as storehouses continue to fill, trains to haul grain away are not arriving on time if at all. That could cause some real problems at harvest and has already had a major impact on northern corn basis. But the immediate concern is now for fertilizer deliveries which have already been delayed by as much as three weeks -- even longer in some areas.
From today's press release, "As we enter the next few weeks of peak demand for fertilizer, we understand the shortness of the season and the necessity of timely delivery in order to safeguard that producers can get this year's crops planted with the proper plant nutrients. BNSF is undertaking several specific actions to expedite fertilizer delivery to ensure our customers have the fertilizer where and when they need it," BNSF said.
The railroad offered a few specifics on how it plans to improve fertilizer deliveries:
- Handling unit fertilizer similar to the logistics of Grain Shuttles, where customers have the capacity for rapid load/unload.
- For customers with this capability, we will commit locomotives to these trains to reduce any potential delays and ensure expedited turn around service at origin and destination.
- Adding an additional shuttle set into fertilizer service to increase capacity through increased resources.
- Managing crew availability so that crews are in position when the train is ready to depart.
- Working to ensure accurate ETAs so facilities can be prepositioned to load and unload as fast as possible.
The prioritization of fertilizer shipments may be enough to get fertilizer to suppliers on time, but northern co-ops report their facilities average 85% full from last year's crop. If rail cars do not get that stored grain moving, there will not be much room to store this year's crop. But if grain shipments are too heavily prioritized through the summer, propane shipments will be delayed.
Northern growers would quickly interject that crude oil shipments are running mysteriously 'on-time', and it is true that increased crude oil traffic on the rails is partly to blame for rail backlogs both here in the U.S. and in Canada.
The grain trade is convinced it will be a late plant this year and that may be what saves us on fertilizer. If plantings are delayed, it may give railroads the breathing room they need to get nutrient delivered to suppliers, and help growers avoid transport premiums. But even if fertilizer deliveries are made on time, there is still the matter of grain and propane to reposition before harvest.
BNSF has owned-up to a problem and is taking steps to help fertilizer deliveries get to where they are going on time. Unfortunately, it will likely take a good long time before the rail snarl is unraveled, and that could easily lead not only to fertilizer delivery delays, but also to delayed grain offtake and another round of propane panic in the coming winter.