BNSF Cuts Back Grain Car Delays
May 17, 2015, The Bismarck Tribune, APRIL BAUMGARTEN Forum News Service
More cars and less cargo means fewer delays.
That’s what officials said last week, referring to the most recent grain by rail numbers. BNSF Railway had 144 outstanding grain cars from May 9-12 in North Dakota, and the company’s trains were an average of 6.8 days late, said Mike Trevino, assistant vice president of external communications for BNSF.
The number is compared to 7,200 outstanding cars during the same time period last year, according to BNSF. Grain trains were on average 21.7 days late during that week.
“It really was a perfect storm that created the huge backlog,” said U.S. Rep. Kevin Cramer, R-N.D., who reviews weekly shipment updates from BNSF and Canadian Pacific Railway. CP has had no outstanding cars and no delays in North Dakota since Feb. 2, according to a report from Cramer.
Shippers started to feel the crunch in spring 2014 after a late harvest in 2013, Cramer said. High commodity prices and record crops also pushed more grain to the rails.
“There was an urgency to get the product to market,” he said. “With the really cold weather (in winter), you have trains that aren’t as long. All of those things created a perfect storm to create this backlog.”
That perfect storm seemed to be reversed with more cars and less ag product to shift, Cramer said. BNSF invested more than $5.5 billion last year, with more than $1 billion going to expansions.
“That’s certainly a part of it, no doubt,” Cramer said. “You have to give that credit where it belongs.”
The company announced in February its improvement and maintenance plan for North Dakota totaling $326 million, with funds going to projects in Dickinson, Devils Lake, Hillsboro and Jamestown.
That comes on the heels of more than $400 million of track improvements last year in the state, including a double-track system for Minot and Williston.
BNSF also added 613 locomotives, more than 7,000 employees and more than 7,500 railcars to its nationwide fleet, which Trevino partially credits to cutting back on delays. This year, BNSF plans to spend approximately $6 billion on maintenance and capacity expansion, according to its annual report.
“Fundamentally, it has been our ability to add capacity to our network,” he said.
Cramer said he couldn’t ask more of BNSF than what they delivered, especially with the investments in North Dakota.
A mild winter allowed filled trains to move product, Cramer said, adding a closer-to-average, on-time crop and lower commodity prices.
“We have to be honest and say some people weren’t as anxious to move their product to market,” he said. “It was the perfect storm that created the backlog, and it was the perfect storm 180 degrees that allowed it to be freed up quicker.”
Last year BNSF hauled nearly one million carloads of agricultural commodities across the country, a 1.9 percent increase from 2013.
But the challenge came in the north, said Trevino. Rail traffic into Minnesota, Montana and the Dakotas has increased by 31 percent since 2009, but traffic going out has increased for those states by 69 percent, according to BNSF.
The increase correlates with increased oil production in the Bakken. North Dakota, the No. 2 oil producer behind Texas, produced 1.19 million barrels of oil per day in March.
The U.S. moves more than a million barrels of oil per day compared to 55,000 barrels per day in 2010.
The most BNSF has hauled in a year was in 2006, when more than 10.6 million cars carried product across the country. That figure “tapered off” and fell to less than 8.5 million units in 2009 during the recession. BNSF continued to add cargo, shipping almost 10.3 million units last year.
But the difference is that the cargo has changed and has become more diversified, Trevino said.
“We had unprecedented growth in the northern part of our railroad, which helps explain why we had a capacity challenge,” Trevino said.
Some have argued rail companies give precedence to oil shipments, but BNSF has denied those allegations. It moves an average of nine oil trains each day, compared to 10 last year, Trevino said.
“We are moving a little bit less (oil) this year than last year,” he said, adding each oil train pulls at least 100 cars.