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Train Delays Are Building Again

Trains for grains scarce on the U.S. Plains
reuters:BY KARL PLUME
Wed May 14, 2014

(Reuters) - In the northern U.S. Plains, where there are no commercially navigable rivers, the U.S. rail system long has served as the lone, dependable way for farms to move grain hundreds of miles to reach ports and sell around the world.

Not any more. Farmers in North and South Dakota, Montana and Minnesota are holding the largest grain stocks in years after months of worsening delays that crippled the backbone of the U.S. farm transportation system. Rail operators blame the snarled service on the coldest winter in decades and changing freight flows.

Yet the delays are growing in some areas even as spring sets in, fueling renewed ire at oil companies that
are increasingly competing for space on the same rails.

The 20-day wait for cars from BNSF was four times the norm this winter, and the long wait times have not eased through mid-May and in some cases have grown.

early this month, the wait time for customers in North Dakota reached 25.5 days, up from a then-record 20.8 days just two months ago. BNSF has 7,257 past-due cars, up nearly 9 percent since March.

In nearby Montana, the backlog has grown to 32.5 days from 20.5 days in early March, while the number of late cars has nudged up to 3,038 cars, from 2,910, BNSF data showed.

Commercial grain elevators have to pay late-shipment penalties of 3 to 10 cents per bushel per day to buyers such as exporters, or at least $10,000 daily per 100-car train. They often pass on those losses to farmers via
lower bids for grain.

Bob Wisness, a farmer near Watford City in the heart of the Bakken field, is trucking his grain longer distances to find a buyer because nearby elevators are full.

"I normally market 90 percent of my grain through my local elevator and now I'm forced to take the vast majority of it elsewhere, anywhere from 50 to 150 miles one way. And these trucks don't run for free," he said.

Wisness said he needs to move about half his stocks before the winter wheat harvest arrives in late July.