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Officials Ask Federal Board to Help on Rail Delays

08:41AM Sep 05, 2014

North Dakota Gov. Jack Dalrymple opened a federal hearing in Fargo about rail service delays in the upper Plains by reading a letter from a grain elevator that said Canadian Pacific Railway Ltd. was 525 cars behind in its service.

The Wilton Farmers Union Elevator also told the governor that as of last month it was still waiting for a train that had been scheduled to arrive on April 8.

That backlog has caused what Dalrymple told the National Surface Transportation Board on Thursday was an "emergency situation" — acres of corn, soybeans and wheat are at record levels in the Dakotas and Minnesota, but there's no place to move it. In North Dakota alone, more than 15 percent of the 2013 grain is still in storage, although that number is more like 90 percent at the Wilton elevator.

"I would seriously ask you to consider this an emergency situation," Dalrymple told the three-member panel that oversees railroad service issues. He was among dozens of officials from the Dakotas and Minnesota who testified.

Farmers and some politicians believe that increased crude oil and freight shipments from North Dakota's western oil fields are largely the cause of shipping delays. Railroads, however, have denied that they favor one sector over another.

Farmers Union Elevator manager Brian Guderjahn told The Associated Press after the meeting that the April 8 cars mentioned in the letter had arrived. But now they're waiting on the April 22 train.

"We order these cars in January for April placement. They come in September. How is a company or a general manager supposed to market grain?" Guderjahn asked. "We can't even start to guess or estimate when we can deliver grain to these people."

Representatives from three rail companies testified Thursday, but the focus was on Canadian Pacific and what North Dakota lawmakers say is the company's failure to provide details on improving the problem. North Dakota Sens. John Hoeven and Heidi Heitkamp said after their testimony that BNSF Railway has outlined steps in the right direction, but Canadian Pacific has not.

"Unlike Burlington Northern, I think CP thinks this is cyclical. That this is temporary," Heitkamp said. "We can't seem to nail down what their investment plans are in North Dakota."

Canadian Pacific spokesman John Brooks said that the company began plans on a new car-ordering system 10 months ago and has been working with customers in the last couple of months on "an orderly transition." He acknowledged there's "still a lot of work to do" to fill smaller orders, such as the Wilton elevator.

Brooks, who faced more questions from the panel than any of the speakers, also said in his presentation that Canadian Pacific invested more than $700 million in the last five years to expand capacity in the upper Plains states and plans to spend more than $500 million in the next two years. He told the board the railway plans to add 400 additional employees and offer housing and other incentives to get employees to job-rich North Dakota.

Guderjahn, the elevator manager, said he has yet to hear from Canadian Pacific.

"It's depressing," he said. "We go into harvest in a position where the elevators are pretty much full of old crop grain."

Dalrymple cited a North Dakota State University study that shows railway shipping delays have resulted in at least $67 million in lost farm income on crops sold between January and April. The study, completed before the current harvest, found the potential for an additional $95.4 million in lost income from the sale of on-farm grain stocks.

Dalrymple said the board can provide an oversight role to ensure a balance between the agriculture and energy sectors and the larger and smaller shipments. The board also has the ability to arrange additional equipment and service, he said.

"This hearing is not about commodity groups and public officials coming in and telling you something," Dalrymple told the board. "It is about individual elevators and farmers out there who have no place to go. They have no recourse. They have no power. They have no influence over the situation, except for you."