Wisconsin businesses that produce everything from cheese to gravel are concerned about delays in shipping as railroads divert cars to serve Canada's grain farmers and North Dakota's oil industry.
The bottom line of many of the state's companies is being affected by a shortage in rail cars and train crews, Ben Brancel, secretary of the state Department of Agriculture, Trade and Consumer Protection told the Wisconsin State Journal . The demand for shipping via rail has skyrocketed in recent years due to an increase in hydraulic fracturing, also known as fracking.
Max Ericson, owner of Minong-based Ericson Logging and Trucking, estimates about 10 percent of his income last year was cut due to poor rail service.
"I order probably 30 cars a week, and I'm lucky if I get one-half that many," he said.
Ericson lost $15,000 last spring when rail service he requested to haul a load of timber from Bayfield County didn't arrive, he said, and it had to be hauled somewhere else.
Canada-based railways that serve Wisconsin have pulled cars out of the state to avoid federal fines due to a weekly requirement of Canadian-grown grain shipments, according to Brancel.
"Those railroads are moving cars and their locomotives out of the U.S. and into Canada so they don't get the penalties, and it puts us even shorter," he said. "It's a long-term strategy that we in North America must work on. Decisions they make in Canada impact us and our ability to move products."
Frac sand mines in Wisconsin and the oil boom in North Dakota have also contributed to more than a 500 percent increase in rail shipping costs, according to a recent U.S. Department of Agriculture grain transportation report.
Propane and coal deliveries are already behind schedule, which may cause prices to skyrocket again this winter, said Bill Oemichen, the president and CEO of the Cooperative Network.
"We're moving cheese to the West Coast to go to Asia. We're moving wood products from northern Wisconsin to Asia. We're moving micro-nutrients that are being created and processed in Milwaukee to the East Coast for Europe," Brancel said. "They all move by rail, and they are challenges that need to be met."
Brancel is working with other agricultural officials to increase awareness of the rail problems, as well as supporting a federal proposal to strengthen the Surface Transportation Board's authority over U.S. railroads, he said.
Canadian Pacific’s CSX Bid Sets Up More Railroad Deals
Evaluate Your Beef Cow’s Udder Health