Railroad delays costing agriculture and business millions

Rail shipping delays are squeezing farmers, power plants and other enterprises in the Upper Midwest, business and government officials told representatives of the federal Surface Transportation Board on Thursday.

During the board's public hearing in Fargo, representatives of farm groups and government officials told members of the board that although the rail service is improving, late trains still cause significant problems getting grain to market.

Rail delays have already cost farmers in Minnesota more than $100 million because they could not get grain to market in a timely manner, Minnesota Agriculture Commissioner Dave Frederickson said.

In North Dakota, farming losses could reach $500 million this year, state Agriculture Commissioner Doug Goehring told the board.

That prompted U.S. Sen. John Hoeven of North Dakota to warn that railroads must boost their performance to avoid an agricultural crisis this fall and winter.

"In the short term they need to add variable inputs that will enable them to catch up on the backlog and also be able to handle the harvest," Hoeven said. "When I say short-term inputs, I mean more people, more rail cars, more locomotives. And that needs to be brought to bear right now."

BNSF Vice President Steve Bobb told the board the railroad is hiring workers, adding locomotives and investing hundreds of millions of dollars to improve service.

But Bobb acknowledged the improvements aren't enough for shippers.

"Your business is important to us and as we've indicated previously, we know our service has not met your needs," Bobb said. "Nor have we met the needs of Amtrak or commuter rail. We're going to invest whatever it takes to handle all of our customers business, both current and future."

A Canadian Pacific official also promised millions of dollars in new investment to improve service over the next two years.

Although railroads have made some improvements in their arrival times, the fall harvest could make conditions worse, said U.S. Rep. Collin Peterson, who represents Minnesota's 7th District.

"I think it's probably too early to tell just exactly how that's going to all sort out," Peterson said. "But there is a lot of nervousness out there within the farming community about what's going to happen this fall and how big a problem this is going to be."

It's not just farmers complaining about the rail delays.

Some shippers have lost markets because they can't deliver products on time.

Others told the board delays are forcing ethanol plants to cut production. Power plants have nearly run out of coal and in some cases had to cut their electrical output.

Minnesota officials are concerned rail delays will lead to a propane shortage this winter.

The Surface Transportation Board has broad authority to order railroads to change shipping procedures. But Vice Chair Deb Miller said although shippers deserve more information from railroads about how serviceis prioritized the board needs to be cautious about making sweeping changes.

"Despite the calls for the board to take strong measures, I'm aware that such measures are just as likely to end up doing more harm than good," Miller said. "That is not to say that the board should not consider all options available to it, but the board's first concern should be to do no harm and we should only take steps likely to alleviate the service problems and not just generate headlines."