Dayton wants more answers from railroads on ag shipping problems

WASHINGTON – A study that shows Minnesota grain farmers lost $109 million in revenue from March through May proves that the state's major rail carriers are not sufficiently addressing agricultural shipping problems, Gov. Mark Dayton has told federal transportation officials.

In a letter sent Wednesday to the chairman of the U.S. Surface Transportation Board, Dayton said the study explains "the dire circumstances that Minnesota farmers face and the need for increased accountability and clarity from the Burlington Northern Santa Fe (BNSF) and the Canadian Pacific (CP) railroads."

Dayton wants the railroads to provide more information about why they cannot move more agricultural products from state farms and grain elevators to markets. The governor asked that the transportation board discuss the study in a Sept. 11 meeting scheduled in Minnesota. He suggested that BNSF and CP have not adequately explained why they cannot get more grain cars on the state's tracks.

Dayton's move comes as 100 million bushels of grain languish in the state's grain elevators and another 100 million bushels remain stored on farms awaiting shipment.

Skyrocketing oil shipments from North Dakota that cause some of the delays are becoming a source of increasing frustration for farmers and elevators operators, said Bob Zelenka, executive director of the Minnesota Grain and Feed Association. "When you're sitting at a grain elevator waiting for cars to load, and every day you see oil trains pass by, it just adds insult to injury," he said.

Zelenka says many members of his group believe the railroads give preference to oil shipments coming out of North Dakota's Bakken fields because the oil producers pay a premium to get their product moved.

Railroad officials have told federal regulators that they are moving products of all types as fast as they can. They have blamed bad weather and increases in other kinds of rail shipments — not just oil — for delays.

But there is no question that oil train traffic is booming. North Dakota now ships 59 percent of its oil output, or about 700,000 barrels of crude per day, on trains. Much of the crude-by-rail traffic heads east through Minnesota — about 50 oil trains of 100 tank cars or more per week, according to railroad regulatory filings.

Most of those Bakken oil trains pass through the Twin Cities and continue south along the Mississippi River on BNSF and Canadian Pacific tracks. On their return from refineries, empty oil trains also pass through Minnesota heading back to North Dakota oil loading terminals.

Freight trains that include tank cars loaded with crude oil also cross the state's northern border on Canadian National Railway. Canada's National Energy Board says that the nation's crude oil exports by rail increased tenfold, to 160,000 barrels per day, in just over two years.

With these and other shipments clogging the state's tracks, Zelenka says major grain backlogs remain with a corn harvest estimated at 1.3 billion bushels set for the end of September or early October.

"We don't think the current service levels will be enough to move the old crop before the new crop is ready to be shipped," he said.

Dayton hit on a similar theme in his letter to Surface Transportation Board Chairman Daniel R. Elliott III.

"With the harvest season fast approaching," the governor wrote, "Minnesota farmers need to know the plans for getting their crops to market."

Dayton suggested that the railroads had failed to adequately explain.

Zelenka said BNSF has been more communicative than CP with his group's members and is doing more to solve shipping woes. In an Aug. 18 report, the transportation board agreed. "BNSF has made considerable documented progress …" the board said, adding later that "CP's reporting does not substantiate similar progress. A sizable backlog remains on CP's system, and CP does not appear to be making sufficient progress toward eliminating the backlog based on its status reports"

Still, Dayton made an example of BNSF in his letter. He cited an Aug. 15 report in which the railroad "failed to address the turn rates, backlog, and plan for grain shuttles within the BNSF system."

Dayton also questioned BNSF's allocation of grain cars to Minnesota.

"The BNSF's weekly report accounts for 2,671 grain cars among a grain fleet of 25,313," the governor pointed out. "What is the status of the other 90 percent of cars not contained within the report?"

Jim Spencer • 202-383-6123