Market Matters Blog
Katie Micik DTN Markets Editor

Monday 01/26/15

Industry Facing Shortage Up to 30,000 Drivers

OMAHA (DTN) -- The U.S. trucking industry is seeing a shortage of 30,000 drivers nationwide, said Truckload Carriers Association Safety and Policy Director David Heller in a recent interview with Wisconsin Public Radio.

The National Grain and Feed Association reported that 2015 is poised to be a big year on the trucking front for the grain, feed and processing industry. (DTN photo by Elaine Shein)

"It's an epidemic at this point," Heller told WPR. "Carriers aren't hauling freight not because they don't have equipment, not because they don't have freight; it's because they don't have the drivers to haul them." Heller went on to say that "the average driver is getting older, and that more technology and regulation is causing some of them to leave."

The Federal Beige Book, a consolidated economic report from the 12 Federal Reserve Districts released on Jan. 14, 2015, reported that many districts are concerned about the freight transportation industry, particularly the trucking sector. The report is based on information collected on or before Jan. 5, 2015.

The Atlanta District transportation contacts reported "slightly higher activity from late November through December compared with year-earlier levels. Trucking and logistics contacts noted significant increases in demand; however, capacity constraints due to a lack of drivers continued to hinder growth."

The Richmond, Va., contacts throughout the district continued to cite difficulties finding skilled workers, specifically in truck driving. In the New York City area, a trucking industry expert reported that "while business conditions have improved substantially in late 2014, reflecting both strong demand and falling diesel prices, truck drivers are in high demand."

The Cleveland District reported, "Freight volume increased since our last report, with demand being described as broad based. Profit margins improved due to lower diesel fuel prices. Hiring drivers is an ongoing process, and industry executives agree that their ability to attract and retain truck drivers is critical to their ability to expand capacity. Although capacity constraints remain an issue industry-wide, carriers are encouraged by amendments to the hours-of-service rules that were included in the recently passed federal omnibus bill."

The hours-of-service rule required a restart of a 60-to-70-hour limit, which drivers were required to comply with beginning July 1, 2013. According to an article published by Bulk Transporter on Jan. 23, "The Federal Motor Carrier Safety Administration (FMCSA) announced in December that it had suspended enforcement of certain sections of the hours-of-service (HOS) rules, specifically the 60- or 70-hour rule, as required by the Consolidated and Further Continuing Appropriations Act, 2015, (also known as Cromnibus) enacted Dec.16, 2014."

Sen. Susan Collins, R-Maine, is responsible for the Collins Amendment language, which, according to the article, "suspends restrictions on the use of the so-called 34-hour restart that requires drivers to take two consecutive periods of 1 a.m. to 5 a.m. off during the restart, thus pushing them into riskier daytime driving and then lifts the restriction on using the restart more than once every 168 hours, or one week."

ATA President and CEO Bill Graves told the trade publication Bulk Transporter, "One of our members told us several of his drivers took four days off for the recent Thanksgiving holiday, yet when they returned to work, their hours were limited because that 96-hour break could not count as a 34-hour restart. That's just one of the impacts FMCSA failed to research that we hope they fully examine as a result of this congressional mandate."

According to Bulk Transporter, the suspension of the restart rules will continue until the end of Fiscal Year 2015 (Sept. 30) or until the final report on the naturalistic study has been submitted to the House and Senate Committees on Appropriations, whichever is later.

PROPOSED NEW RULES COULD PROVE COSTLY FOR INDUSTRY

The National Grain and Feed Association reported that 2015 is poised to be a big year on the trucking front for the grain, feed and processing industry. On tap for the trucking industry this year is potential rulemaking at the FMCSA and Congress' need to pass a new highway bill before the old one expires May 31.

The NGFA said, "The rulemaking under consideration at FMCSA would increase the minimum levels of financial responsibility for motor carriers (liability coverage for bodily injury or property damage), and would increase financial responsibility for freight brokers and freight forwarders. Currently, there is a minimum of $750,000 in financial responsibility for each for-hire interstate general freight carrier. FMCSA's research report on Financial Responsibility Requirements for Commercial Motor Vehicles estimates an insurance premium cost of $5,000 per truck per year for $750,000 to $1 million in coverage."

In comments, which are due by Feb. 26, NGFA plans to ask FMCSA to consider the effect of any increase in financial responsibility on freight rates and prices received by sellers of agricultural commodities.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(SK)

Posted at 11:18AM CST 01/26/15 by Mary Kennedy
Comments (1)
When ever and where ever any bad news occurs, are truckers, like farmers, not assumed to be guilty? Then impossible to prove innocent. Check out some of the criminal charges of negligent homicide, etc.
Posted by Bonnie Dukowitz at 11:52AM CST 01/27/15
 

Monday 01/19/15

West Coast Ports Suffering Slowdowns, Work Stoppages

OMAHA (DTN) -- The Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) are still at odds over labor contracts, and the ongoing dispute is affecting service at several West Coast ports, according to trade sources.

Loaded containers heading west by rail along the northern corridor in early January. (DTN photo by Mary Kennedy)

A trade source told DTN via email that both sides are still blaming the other for the failure to reach an agreement. The source said the ports having the most problems are Oakland, Portland and Seattle/Tacoma. "LA/Long Beach is apparently better; Oakland is the worst and has been closed completely off and on."

The PMA stated on their website in December that, "ILWU slowdown tactics have reduced productivity at Pacific Northwest ports for more than a month and a half, with drop-offs of 30-40% now the norm, according to PMA analyses of terminal operations. Intermittent walk-offs have also occurred in Oakland. At the ports of Los Angeles and Long Beach, the nation's busiest, the ILWU restricted dispatching skilled crane operators to operate yard cranes, among the most important jobs to relieve congestion on the docks."

According to the PMA, the union actions are tied to the ongoing negotiations for a new coast-wide labor contract between container terminal operators and the ILWU. Negotiations began in May for the contract that expired July 1, and talks have been occurring almost constantly for the past six months. The contract being negotiated covers nearly 20,000 longshore workers at 29 West Coast ports.

In a press release on their website Jan. 15, the Federal Maritime Commission said that Chairman Mario Cordero announced to staff on Jan. 13 that his priority for the commission in 2015 is addressing congestion issues that are plaguing the nation's ports.

Chairman Cordero stated, "Among the commission's statutory goals is the assurance of an efficient ocean transportation system. The efficient operation of the nation's ports is squarely within that mandate and paramount to the commission's responsibilities. As we move forward, I look forward to a thorough review of the issues and views that have been provided from various maritime industry stakeholders. The FMC will continue its role in protecting the shipping public and addressing unreasonable or unjust practices by carriers or marine terminal operators."

On Jan. 5, Allison Beck, acting director of the U.S. Federal Mediation and Conciliation Service (FMCS), issued the following statement on the FMCS website: "In response to a joint request for assistance from the parties, collective bargaining between ILWU and PMA representatives will continue as soon as possible under the auspices of the Federal Mediation and Conciliation Service (FMCS). We are prepared and ready to render prompt assistance. Deputy Director Scot Beckenbaugh, a senior FMCS mediator with extensive collective bargaining experience in this industry, has been assigned to help the parties bring these important negotiations to a mutually acceptable resolution."

The press release went on to say the FMCS will not release information regarding future meeting dates and locations. "In addition, the FMCS will have no further comment at this time regarding the status or substance of the negotiations."

Earlier this month, the BNSF said on their website that the marine terminal operators at the ports of Oakland, Los Angeles and Long Beach had advised BNSF of their intentions to limit marine terminal labor calls to support their marine terminal operations. A similar action had also been done at Pacific Northwest marine terminals.

"In anticipation of further slow-downs and marine terminal congestion," the BNSF said, "we are issuing an embargo to be effective Monday, Jan. 5, 2015, for westbound traffic received at interchange points destined for all marine terminals served on the West Coast. The embargo was lifted Jan. 7, but the BNSF continues to monitor the ongoing labor issues at the West Coast terminals and has stated that they are encouraged by the participation of the FMCS.

A container broker told DTN, "From what we hear, the main issue is maintenance of chassis. ILWU wants to have that job and income and work from it for their mechanics. The problem is that the shipping lines and terminals no longer own the chassis, so they have no say or legal right to give the maintenance to the ILWU. The contract is left to another union off the terminal site. It's a catch 22."

"We are doing some business, but we easily passed on over 2 million in sales over the past 60 days. Some of that is lost, but some may come back to us. A lockout or strike keeps being rumored."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG\SK)

Posted at 12:16PM CST 01/19/15 by Mary Kennedy
 

Monday 01/12/15

Proposal Would Make Weekly Reporting Permanent

OMAHA (DTN) -- Weekly service performance reports from railroads may become a permanent requirement following a recent decision by the Surface Transportation Board (STB).

(DTN photo by Mary Kennedy)

On Dec. 30, the STB issued a proposal of new regulations for permanent weekly reporting by all Class I railroads and by the Chicago Transportation Coordination Office (CTCO). The current order requiring weekly service updates was on a temporary basis and had no expiration date.

The weekly filings have allowed the board and rail stakeholders to monitor performance and have allowed the board to begin to develop baseline performance data. "Based on the board's experience with the reporting to date, the board is now moving forward with a rulemaking to determine whether to establish new regulations for permanent reporting by the members of the Class I railroad industry, the Class I carriers operating in the Chicago gateway, and the CTCO through its Class I members," the STB said.

The permanent collection of weekly performance data would improve the STB's ability to "identify and help resolve future regional or national service disruptions more quickly, should they occur," the board said. "Transparency would also benefit rail shippers and other stakeholders by helping them to better plan operations and make informed decisions based on publicly available, near real-time data, and their own analysis of performance trends over time."

The entire STB decision can be found here: http://goo.gl/…

A second Dec. 30 proposal directs BNSF Railway Company to "submit a detailed description of the contingency plans the carrier would use to help mitigate an acute coal inventory shortage at one or more generating stations in a region."

With respect to BNSF and coal specifically, the STB stated, "Totality of the information collected to date suggests that BNSF's coal service has struggled, although there has been some progress in recent weeks." The board stated it is critical they continue to closely monitor BNSF's performance for indications of improving or deteriorating service.

"In addition to monitoring BNSF's coal service performance via the data we collect," said the STB, "we will continue to hold regular meetings with BNSF senior management so that we can receive first-hand information about the challenges and progress BNSF is experiencing with respect to all service issues, including coal."

Here is the link to the entire decision by the STB concerning this issue: http://goo.gl/…

Comments and replies on both decisions may be submitted either with the board's e-filing format or in the traditional paper format. Comments are due by March 2, 2015. Reply comments are due by April 29, 2015.

BNSF REPORTS COLD, SNOW, PNW LABOR DISPUTE HAVE SLOWED TRAFFIC

Below-zero temperatures and blizzard conditions in the Midwest and Northern Plains required reduction of train lengths across the northern portion of the network last week, according to the BNSF website. The restrictions were expected to remain in place through the past weekend until temperatures return to more normal levels early this week.

"Despite the harsh conditions, our team of over 300 rapid responders has helped keep the network running strong with just some minor weather-related delays," said BNSF. "In addition, we continue to experience strong performance gains due to additional locomotive availability and reduced post-holiday season volumes."

The railroad also said it is continuing to manage service inconsistencies at ports in the PNW and California because of the ongoing labor dispute. Because of work slowdowns causing some disruptions, "temporary restrictions on export/import traffic were briefly instituted and subsequently withdrawn as volumes proved manageable," the BNSF website said. The U.S. Federal Mediation and Conciliation Service announced on Monday, Jan. 5 that it was "prepared and ready to render prompt assistance." The AP reported last week that pressure, both political and financial, has been mounting while each party faults the other for the sluggish movement of billions of dollars of cargo across the docks at 29 seaports that form a vital trade link with Asia.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(SK/CZ)

Posted at 12:00PM CST 01/12/15 by Mary Kennedy
 

Tuesday 01/06/15

Railroads Getting Better Grades for Service

OMAHA (DTN) -- Freight customers are giving railroads better ratings on service, compared to a year ago, and observers report a slight decrease in oil cars spotted in the northern corridor.

(DTN photo by Mary Kennedy)

In the Soy Transportation Coalition's third bi-weekly rail service survey, 78% of respondents said cycle times for railroads are faster than they were a year ago, according to USDA's weekly Grain Transportation Report. In comparison, the first survey showed 67% and the second survey showed 70%.

Although fewer rail customers reported past due orders, USDA said the survey showed "the average number of days past due for those that are experiencing delays increased from 13.4 days in the second survey to 30 days in the third survey."

Besides good weather allowing faster speeds and more locomotives available to pull loaded cars, there has been a slight decrease in oil cars seen in the northern corridor. Up until just recently, most trains one would see moving along northern routes consisted of at least 75% or more 100-car oil trains. In the past few weeks, observers say oil cars are still moving, but there is more of a mix of grain, container, coal and oil cars in 100-car-units lately.

It is unlikely there will be a significant falloff in volumes shipped out of North Dakota's Bakken oil field in the near term, a source who works for an oil and gas exploration service told DTN. The first reason is most large producers have hedged a majority of their production at prices close to or above $90.00 and they need to make delivery on those contracted barrels, he explained. Second, numerous wells remain that have been drilled and cased, but are waiting on completion. From a cost-forward basis, these wells will meet economic hurdles and they will be completed over the next few or more months, the source said.

"My guess is train-shipped oil volumes will not begin to decline until mid-year," he said, "unless Saudi Arabia allows oil prices to rebound before then. Even then, there will still be a lag as companies drop rigs, hence well count and oil volumes to ship also drop."

RAILROAD REPORTS

In its weekly update to the Surface Transportation Board (STB), The Canadian Pacific (CP) said, "Our U.S. network continues to be in good operating condition. Average dwell at origin for unit grain trains has improved, and grain loadings remain steady. Train speed has increased. With respect to the Rapid City, Pierre & Eastern Railroad (RCP&E), locomotives are in overall balance this reporting week, understanding that the number varies from day to day. We fulfilled 237 of 300 RCP&E grain car requests, which is an improvement over last week." Here is a link to the full Dec. 31 service update: http://goo.gl/…

On Jan. 5, the Burlington Northern Santa Fe (BNSF) reported on its website that the shuttle turns per month for the PNW were slightly lower from one week ago at 2.4 TPM vs. the desired turn time of 2.5. Here is the weekly update by the BNSF to the STB on Dec. 31: http://goo.gl/…

WEST COAST PORT ISSUES

"We continue to monitor the ongoing labor situation at the West Coast ports," BNSF said on its website. "While negotiations between port operators and dockworkers continue, we are actively responding to changing conditions affecting both inbound and outbound shipments."

The Pacific Maritime Association (PMA) released a statement on Jan. 2 citing current issues affecting operations and asking the International Longshore and Warehouse Union (ILWU) to stop withholding skilled longshore workers from their shifts on the docks, especially in Southern California ports. Here is the full press release from the PMA: http://goo.gl/… .

On Jan. 5, the Federal Mediation and Conciliation Service released a statement on its website announcing they will step in and help mediate negotiations. "In response to a joint request for assistance from the parties, collective bargaining between ILWU and PMA representatives will continue as soon as possible under the auspices of the Federal Mediation and Conciliation Service (FMCS). We are prepared and ready to render prompt assistance. Deputy Director Scot Beckenbaugh, a senior FMCS mediator with extensive collective bargaining experience in this industry, has been assigned to help the parties bring these important negotiations to a mutually acceptable resolution."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary on Twitter @MaryCKenn

(CZ/SK)

Posted at 1:11PM CST 01/06/15 by Mary Kennedy
 

Wednesday 12/31/14

Railroads Pick Up Steam

OMAHA (DTN) -- With improved service and fewer customer complaints, the holiday season has been a merrier time for U.S. railroads than at other times throughout the year.

Railroads have been reporting fewer delays this past month. (Photo by Roy Luck, CC BY 2.0)

The Canadian Pacific Railway (CP) told the Surface Transportation Board in a letter on Dec. 24 that, "Overall, our U.S. network is in good operating condition. Terminal dwell is down. Grain loadings have improved week over week, and dedicated grain cycle times are in line with plan."

The CP went on to report that with respect to the Rapid City, Pierre & Eastern Railroad (RCP&E), the locomotive balance varies from day to day but approaches equilibrium. "We fulfilled 194 of 300 RCP&E grain car requests this reporting week. The episodic flow of returning empty grain cars from the east affects our ability to satisfy these requests. We will continue to work with our interchange carriers and the other components of the supply chain to balance these flows."

Bob Zelenka, executive director of the Minnesota Grain and Feed Association, told the Grand Forks Herald that service complaints about the railroads have been "fairly quiet."

"Unit train loaders have been getting pretty good service and less-than shuttles are experiencing delays -- but it's been two to three weeks rather than four to eight weeks," Zelenka said. But many farmers have slowed selling as they wait for the new tax year, or better prices, which leaves less grain to ship right now. Zelenka said that because of farmers keeping grain home, elevators that bought freight for January and February might not be able to use it and might have to sell it in the secondary freight market.

The BNSF reported Monday that shuttle turns per month to the Pacific Northwest were at 2.5 TPM. While this is slightly lower than the previous week, the desired shuttle turnaround time for the BNSF is being met. In their service update prior to Christmas, the BNSF said, "Total volume was heavy with a robust 210,998 units in Week 50. This represents our second-highest weekly total of the year, and our 20th week in 2014 that total volume has exceeded 200,000 units. System-wide on-time performance held steady at 74% for the week. Intermodal on-time performance was slightly below the system-wide result at 72.3%."

WEST COAST LABOR DISPUTE STILL UNRESOLVED

The intermodal performance is still affected by the ongoing labor dispute on the West Coast. The container ports involved in the current contract talks are Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma. Meetings prior to Christmas between the International Longshoremen and Warehouse Union and the Pacific Maritime Association (PMA) did not provide any solutions in the contract negotiations.

The PMA asked for federal mediation on Dec. 22 and in a statement posted on their website said, "After seven months of negotiations, we remain far apart on many issues. At the same time, the union continues its slowdowns, walk-offs and other actions that are having impacts on shippers, truck drivers and other local workers -- with no end in sight."

On Dec. 29, the PMA released this statement on their website: "The ILWU's press release today underscores the need for federal mediation in these negotiations. Unfortunately, the characterization that the PMA and ILWU have only a 'few issues' left to resolve is inaccurate. Significant issues remain unresolved, including wages, pensions, jurisdiction and work rules. Further, the ILWU's escalating rhetoric on congestion is nothing more than a smokescreen for its slowdown activities."

"Given the lack of progress at the table, the ILWU's continuation of debilitating work slowdowns and the impact those actions are having on businesses throughout America, it's clear that mediation is required to resolve the many issues that remain at the bargaining table." Here is the link to the full Dec. 29 press release by the PMA: http://goo.gl/…

In response to the ongoing labor issues on the PNW, Zelenka agrees that should that stay unresolved and tensions rise, delays could return, especially with traffic in and out of the West Coast. "If you slow down anything in this tight system, it backs up and affects everything," Zelenka said.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/SK)

Posted at 2:47PM CST 12/31/14 by Mary Kennedy
 

Monday 12/22/14

Railroads Performing Better Due to Mild Weather, More Locomotives

OMAHA (DTN) -- On Dec. 16, the Senate approved a 9-cent-per-gallon increase in the barge diesel fuel user fee, which will take effect April 1, 2015. This addition to the current barge fuel tax of 20 cents, paid by barge and tow-boat operators, is expected to generate approximately $40 million in additional revenues annually, which will be deposited into the Inland Waterways Trust Fund for the benefit of priority navigation project construction and major rehabilitation.

On Dec. 18, the U.S. Army Corps of Engineers (USACE), St. Paul District, in a press release stated that they were closing the Upper St. Anthony Falls Lock in Minneapolis to all navigation. (Photo by Kelly Moshier)

NGFA President Randy Gordon said in a press release on Dec. 17, "America's inland waterways infrastructure is in desperate need of renovation and modernization, and this much-needed increase in the user fee is absolutely essential to the future global competitiveness and economic growth of U.S. agriculture and other industries, and job creation they represent."

On June 10, President Barack Obama signed into law the Water Resources, Reform and Development Act (H.R. 3080), which provided a process for authorizing certain inland waterway navigation projects. However, legislation did not include an increase in the inland waterways user fee, which is imperative for funding lock-and-dam and all other improvement projects. The NGFA noted in a press release on Dec. 17 that industry estimates are that the 9-cent-per-gallon increase in the barge diesel user fee will generate up to an additional $80 million per year when combined with the federal matching funds.

There are 29 locks and dams total on the Mississippi River from Minneapolis, Minn., to St. Louis, Mo. The lower 27 are numbered, with Lock and Dam Number One located near the Ford Bridge between Minneapolis and Saint Paul. The two locks that are not numbered are the Upper and Lower St. Anthony Falls Locks and Dams, located in downtown Minneapolis. Most of the inland waterway locks and dams were built in the 1930s with a projected 50-year life span. Of the nation's 241 locks, 57% now are 50 years are older, while 26% exceed 70 years of age.

While this extra fee is good news for the aging waterway locks and dams, it may be too late to help out the upper-most locks and dams on the Mississippi River. On Dec. 18, the U.S. Army Corps of Engineers (USACE), St. Paul District, in a press release stated that they were closing the Upper St. Anthony Falls Lock in Minneapolis to all navigation. "The action is mandated as a result of the Water Resources Reform and Development Act of 2014 with the requirement that the lock be closed on or before June 10, 2015," explained the USACE.

"The action will end all use of the lock by commercial, recreation and other navigational uses," said the USACE. "This will end the ability to ship cargo, such as gravel and scrap metal to and from barge terminals above Upper St. Anthony Falls Dam. Cargo that would otherwise be moved by barge during the normal shipping season will likely now be moved by truck or other transportation means. This will have an economic effect for those companies above the dam."

Here is the public notice released on Dec. 18 by the USACE: http://goo.gl/…

EXTRA POWER, GOOD WEATHER HELPS RAIL TRAFFIC IMPROVE

The Burlington Northern Santa Fe (BNSF) in its weekly service update to customers said that they experienced another week of improving car velocity and steady on-time performance. "Aided by the impact of additional resources and capacity, along with generally favorable weather conditions, we maintained good fluidity throughout the network even as we handled one of our largest weekly volumes of the year. As we come to the official beginning of winter and year's end, our typical winding down of maintenance projects also helped to improve fluidity."

The BNSF told customers that additional locomotives have steadily reduced the number of trains holding for power and in the last month, have reduced trains held by more than 50%. "Looking into 2015, we expect to make even more performance gains with the 330 new locomotives that will be added to our fleet next year," said the BNSF.

The Canadian Pacific Railway (CP) told the Surface Transportation Board (STB), that "Our performance as relates to the Rapid City, Pierre & Eastern Railroad (RCP&E) was strong as we fulfilled 314 of 300 requests. And as we indicated last week, the locomotive balance is approaching the target of zero. On Dec. 15, there was only one more RCP&E locomotive on CP than there were CP units on RCP&E. The locomotive balance will fluctuate, but it is trending in line with the zero target."

Tim Luken, Manager of Oahe Grain, Onida, S.D., told DTN that service was better on the RCP&E. "We have been getting service once a week with 50 to 55 cars, so I can't complain," Luken said. "That's much better than getting less than 50 cars as we experienced during the wheat harvest."

The labor problems on the West Coast continue to have some effect on both the CP and BNSF. The BNSF said in their service update to customers on Dec. 19, "We continue to monitor the ongoing labor situation at the West Coast ports. While negotiations between port operators and dockworkers continue, we are actively responding to changing conditions affecting both inbound and outbound shipments. We remain hopeful for a resolution in the near future."

However, as of Dec. 19, there were no resolutions to the contract talks that took place in San Francisco Thursday between negotiators for the Pacific Maritme Association (PMA) and International Longshore and Warehouse Union (ILWU).

On Monday, Dec. 22, the PMA requested federal mediation in its contract negotiations with the ILWU. "After seven months of negotiations, we remain far apart on many issues," said PMA spokesman Wade Gates. "At the same time, the union continues its slowdowns, walk-offs and other actions that are having impacts on shippers, truck drivers and other local workers -- with no end in sight. It is clear that the parties need outside assistance to bridge the substantial gap between us." Here is the link to the full press release: http://goo.gl/…

The U.S. Federal Mediation and Conciliation Service (FMCS) responded it has been closely monitoring these negotiations for some time and due to the sensitivity of the negotiations, "the FMCS will have no further comment on this request and will not comment regarding the status or substance of the negotiations." Here is the link for the full press release: http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/BAS)

Posted at 12:44PM CST 12/22/14 by Mary Kennedy
Comments (1)
really another railroad blog? What about a story about how far off USDA was on yield in 2014.Our local elevator has shipped most of it's corn to Canada already and it's not even the end of the year yet.Have heard of talk from guys in Ill. that they had normal yields.They said 250 bu. is normal for them nothing not records.
Posted by Raymond Simpkins at 8:21AM CST 12/30/14
 

Friday 12/19/14

Informa: Beans Acres Exceed Corn Acres

OMAHA (DTN) -- Private analytical firm Informa Economics sees farmers planting more soybean acres than corn acres next year for the first time since 1983.

Based primarily on its survey of producers in December, Informa said farmers are likely to plant 88.8 million acres of soybeans next year and 88 ma of corn. The changes are slight adjustments to group's prior estimates.

"Informa Economics made a slight reduction to their estimate for corn acres in 2015, from 88.3 million to 88.0 million acres," DTN analyst Todd Hultman said. "Their estimate of soybean acres increased slightly, from 88.3 million to 88.8 million acres, based on their December survey."

Informa's latest estimates are 3.2% lower than last year's corn acreage and 5.5% higher on soybeans. Corn acreage in the Eastern Corn Belt is expected to decline 1 ma from 2014 while the Western Corn Belt is expected to decline 1.4 ma. Soybeans are most likely to be planted on those acres, Informa said.

"As could be expected from these slight changes, corn and soybean prices showed no impact from Informa's report Friday and were trading lower both before and after the numbers were released," Hultman said. "The anticipation of more corn acres going to soybeans in 2015 gives new-crop soybeans an early bearish bias, but there is a long way to go before harvest next fall."

Informa's report included production forecasts based on trend-type yield. It projects corn production at 13.4 bb with a 165.9 bpa yield, and soybean production at 4 bb with a 45 bpa yield.

Winter wheat was seeded on 42.3 million acres this fall, Informa estimated. That's about 121,000 acres lower than last year's plantings. Hard red winter wheat area, at 30.9 ma, is 408,000 acres higher than last year. Soft red winter wheat planting is estimated at 561,000 acres lower than last year at 7.9 ma.

"Informa's estimate of all wheat acres slipped from 56.8 million to 56.6 million acres and also had no visible impact on prices Friday," Hultman said.

All wheat production was projected at 2.21 billion bushels, about 180 mb larger than in 2014, Informa said. The all wheat average yield, at 45.6 bushels per acre, is about 2 bpa higher than last year.

USDA will release its initial winter wheat seedings report at 11 a.m. on Jan. 12. It will also release quarterly Grain Stocks, the Crop Production Annual Summary and the World Agricultural Supply and Demand Estimates.

(CZ)

Posted at 11:20AM CST 12/19/14 by Katie Micik
 

Monday 12/15/14

Logistic, PNW Labor Issues Hurting Business

OMAHA (DTN) -- "Frustrated" was the one word Bob Sinner, president of SB&B Inc. located in Casselton, N.D., kept repeating during a recent conversation with DTN.

Flatbed truck loading containers of soybeans. (Photo courtesy of SB&B Foods Inc., Casselton, N.D.)

Sinner's business manages the marketing and sale of an extensive line of identity-preserved (IP), non-GMO and organic products to customers worldwide and has been supplying food-grade crops both domestically and internationally for over 20 years. Lately, however, it has been a challenge to do so because of the most recent snafu in logistics: a stall in negotiations between the International Longshore and Warehouse Union (ILWU) and the Pacific Maritime Association (PMA). The ILWU in this case consists of a group of 20,000 workers and the PMA represents shippers, stevedores and terminal operators at 29 West Coast ports.

Both organizations have been in contract discussions since May in hopes of avoiding problems when the contract expired on July 1 and eventually agreed to continue working under the current contract and continue talks. Sinner told DTN, "Here it is, five months later and things are only getting worse."

According to the PMA, tensions began to escalate in October, causing slowdowns and disruptions to container shipping. The union denied responsibility and told the press the problems were due to operational and logistic issues.

Sinner said both exports and imports of all containerized commodities are suffering. According to an article in the Minneapolis Star Tribune, "The dispute affects any cargo that needs to be shipped in containers, including fruit, vegetables, wine, beef and pork, high-protein distillers dried feed grain from ethanol plants, and specialty soybeans. It does not affect bulk vessels that ship Midwest corn and soybeans for animal feed abroad."

In late November, the BNSF railroad ceased shipments from St. Paul of empty railcars heading for Seattle or Tacoma to pick up containers from ships. Sinner said his only "saving grace" was his ability to move containers out of Minneapolis on the Canadian Pacific Railway through Vancouver, BC. While this helped move some of the 240 containers of high-quality soybeans that he normally ships each month to the PNW, he said there are still many containers waiting to move.

Sinner said others were not so fortunate. He mentioned vegetable and fruit producers on the West Coast had to dump product in fields because the products weren't getting shipped and therefore spoiled.

Sinner is concerned his customers will get tired of waiting and look elsewhere for product, like Canada and South America. Sinner's customers reside in 15 countries, including Japan, Korea and Taiwan, and each customer has specific instructions for every bag of non-GMO soybeans that are shipped. He said his customers will not tolerate late arrivals of soybeans and will charge late fees or even cancel the delayed shipment altogether; a very costly situation for Sinner's business.

A small container shipper told DTN he has been unwilling to make sales because he is unsure if they will ship or not. "You can imagine what is happening to other guys and the losses in fresh fruit, veggies, hay off California, Oregon, Washington; losses are in the nine-digit range and jobs are being lost."

Sinner told DTN the only glimmer of hope right now is the scheduled caucus in San Francisco beginning on Dec. 15 between the ILWU and PMA.

"Every port on the West Coast is suffering right now," said Sinner. "While there are strong hopes for a resolution during the caucus, it would still take weeks before the members vote. It is so frustrating not knowing what is going on."

On Nov., 17, a group representing United States agriculture and forest products producers -- including farmers, food processors, exporters, and transportation and logistics providers -- wrote a letter to President Barack Obama urging him to send a labor mediator to help reach a contract deal. In the letter, the group warned, "There is nothing that we produce in this country in agriculture and forest products, that cannot be sourced somewhere else in the world. We can grow the best in the world, but if we can't deliver our products affordably and dependably, the customer will go somewhere else and may never come back."

According to the Minneapolis Star Tribune, "A White House spokesman said the president is monitoring the situation, but isn't planning to force a resolution."

Here is a link to the letter written to the president: http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary on Twitter @MaryCKenn

(AG/CZ)

Posted at 11:20AM CST 12/15/14 by Mary Kennedy
 

Monday 12/08/14

Milder Weather, Lower Freight Volumes Allow Railroads to Boost Performance

OMAHA (DTN) -- Milder weather and lower freight volumes have helped improve railroad service across the country, according to a recent BNSF report.

Canadian Pacific freight train moving through the Twin Cities corridor. (DTN photo by Mary Kennedy)

In its weekly service update, BNSF said that operations remained fluid over the past week with strong gains in on-time performance across all business groups. "With Thanksgiving behind us and freight volumes returning to their traditional levels, locomotives are becoming more available and favorable conditions exist for improved velocity and network performance as we approach the New Year. We also expect milder, above-average temperatures throughout much of the network, particularly in the North Region, during the upcoming week."

One snag in service last week was a derailment on Dec. 1 near Wadena, Minn., which closed both tracks. Service was restored by Dec. 4, and traffic is once again moving at a normal pace.

The ongoing labor dispute in the Pacific Northwest is still an issue for all railroads in that corridor. BNSF said it is continuing to manage service inconsistencies at the ports and in some cases have place restrictions on some export/import traffic at several of its hubs. BNSF said, however, some of those restrictions were "subsequently withdrawn based on a daily evaluation of conditions. With port operators and dockworkers resuming contract negotiations this week, we continue to hope for a resolution in the near future."

According to its weekly update to the Surface Transportation Board (STB), BNSF cars due in North Dakota rose to 3,783 versus 3,145 the prior week. Montana's total was lower at 1,361 versus 1,381 the prior week, and Minnesota's total was also lower at 617 versus 891 cars the prior week. Shuttle turns per month to the PNW was steady at 2.4 TPM versus the desired turns of 2.5 per month.

To see all of the Class 1 railroad service updates to the STB on Dec. 3, go to: http://goo.gl/…

CANADA EXTENDS MINIMUM MANDATE BUT LOWERS TARGETS FOR RAILROADS

This past August, the Canadian government raised the minimum weekly volume for shipments of grain that Canadian Pacific Railway (CP) and Canadian National Railway (CN) have to move in order to alleviate the rail backlog in Canada that was costing farmers and grain handlers lost revenue. The original mandate of 500,000 metric tons of grain was set in March, and in August, the mandate was raised to 536,260 metric tons with an expiration date of November. If the railroads did not meet those mandates, there were monetary penalties to be paid.

On Saturday, Nov. 29, the Canadian government extended a mandate for the movement of grain by rail through the end of March 2015. The new weekly minimum will require the CN and CP to ship 200,000-465,000 metric tons and can fluctuate in that range through March 2015. Dow Jones reported the following targets for Nov. 30, 2014, through March 2015:

Time period Metric tons per week
Nov. 30, 2014 to Dec. 20, 2014 345,000
Dec. 21, 2014 to Jan. 3, 2015 200,000
Jan. 4, 2015 to Feb. 21, 2015 325,000
Feb. 22, 2015 to March 21, 2015 345,000
March 22, 2015 to March 28, 2015 465,000

The mandate is designed to ensure Canada's grain crop is moved in a timely fashion in the hopes of preventing the backlog that left nearly 30 million metric tons of grain waiting to be moved through the first half of 2014.

According to an article published by Argus Media, the government also ordered carriers to provide data on railcar order fulfillment by corridor, including the placement of cars at producer loading sites and along short-line railways to help promote transparency, a similar request made in the U.S. by the Surface Transportation Board. The difference is that the Canadian order includes a penalty of up to C$100,000 per violation if a carrier misses its quota, while there is no monetary penalty in the U.S.

Small single-car grain shippers on short lines in Western Canada felt the original mandate only helped the large-unit shippers and left them short of cars most of the year with no recourse to the railroads. One of those shippers told DTN in an email that "It's nice to see the government appear to hold the railways to account, but it isn't clear that these orders do much to affect their performance ... except to give the railways another excuse to not service small shippers."

He went on to say that shippers continue to receive roughly "half of their weekly wants. With the new process of canceling unplanned orders at the end of each week, CN shows no backlog of orders. Since this implementation, we have had over 300 orders cancelled."

He said that shippers have seen some cars most weeks, which is a huge improvement from last winter. "Service hasn't deteriorated ... yet." Many shippers wonder what will happen if the winter turns ugly and if railroad performance will suffer even with the mandates in place. Both railroads were also required to submit winter contingency plans to the government to include service strategies for "producer car loaders and short-line railways" through July 2015.

Both the CP and CN have publicly stated that they will continue to meet the grain mandates even though they don't agree with Bill C-30. In April, prior to the mandate becoming law, the Calgary Herald reported that the CEOs of both rail companies expressed their opposition to the House of Commons. The Herald reported that CN CEO Claude Mongeau called the introduction of the bill "a sad day for Canada," while CP CEO Hunter Harrison called it "grossly unfair."

The Herald also reported that Harrison told the government at the April meeting, "We are very concerned about the speed and lack of consultation by the government in making such significant changes to the rail transportation system that could result in unintended consequences for all stakeholders. We need to move away from reactionary legislative interventions that target unfairly one participant."

Mary Kennedy can be reached at mary.kennedy@dtn.com
Follow Mary Kennedy on Twitter @MaryCKenn

(AG\SK)

Posted at 10:31AM CST 12/08/14 by Mary Kennedy
 

Sunday 12/07/14

Everyone Needs a (Marketing) Code They Can Live By

DTN Senior Analyst Darin Newsom reminds me of the NCIS television show character Agent Leroy Jethro Gibbs every once in a while. They're both considered to be some of the best at what they do (analyzing markets and tracking down bad guys, respectively). They refuse to accept the easiest obtainable information as truth (USDA reports and plausible alibies, respectively). And they both keeps these weird lists of "rules" that can, and should, be broken in certain circumstances.

Agent Gibb's list of rules is much more extensive than Darin's, but then again his job is to solve heinous crimes and capture the world's worst criminals. Darin's mission is, perhaps, a little narrower and a whole lot nicer: to help farmers understand the markets and make better marketing decisions.

To use Gibb's words: Everyone needs a code they can live by. Darin has a similar philosophy, although I've never heard him articulate his rules all together, at once, until this morning at DTN University's Master Marketing course in Chicago. If I could only tell you how many times I've heard about Rule No. 1 or Rule No. 2. In all honesty, I've never been able to keep them straight, so I'm going to make you (and me) a little cheat sheet.

1) Don't get crosswise in the trend.

Some people would also describe this one as "the trend is your friend." But if you've read Darin often enough, this is where he often refers to Isaac Newton's First Law of Motion in its application to markets: a trending market will stay in that trend until acted upon by an outside force. That outside force can be a lot of things, like a change in fundamentals or simply a strong change in speculative traders' viewpoint.

Now, when it comes to looking at trends, Newsom's pretty strict. There are short term charts (daily), mid-term charts (weekly) and long term charts (monthly). Daily charts can gyrate heavily on news that doesn't fundamentally change the markets direction and often show technical signals that don't materialize. On the other hand, monthly charts can take too much time to reflect a major change. So Newsom likes to look at charts of weekly prices to gauge the trend of the market.

2) Let the market dictate your actions.

While this rule is very simple in concept, Newsom's interpretation is structural, taking all of the emotion or attempts to outguess USDA reports out of the equation. Farmers need to know how the basis, futures spreads, and futures contracts are trending. Futures spreads reveal the position of commercial grain traders. A strong carry situation is considered a bearish outlook, while a tighter carry is less bearish to neutral and an inverse is bullish.

The position of noncommercial, or speculative, traders is often revealed in the futures market and in the weekly CFTC Commitment of Traders report.

Newsom created a matrix of market types based on whether commercial and noncommercial traders are bullish, bearish or neutral. He then matched them up with the best marketing strategy for that market type. Here's a link to the presentation he gave today, and the chart is near the end, page 30: http://bit.ly/…

3) Manage margin risk.

"I've seen margin calls be the death of the best marketing plans I've seen in place," Newsom said. "By understanding the different types of markets, and that each has a different read, we can manage our margin risk by running it through different filters." Farmers need to think about price distribution, seasonality and market volatility when deciding what kind of strategy they apply.

Like I mentioned earlier, Newsom's rules are not absolutes. Sometimes there are contra seasonal moves or excessive volatility that make a certain strategy impractical. And some of the market types are rare and tend to be very short-lived, like No. 7 when commercial traders are bullish and speculative traders are bearish. In that kind of scenario, it won't be long before one side changes its opinion. Most often, speculative traders will come around to commercials' point of view, but not always, Newsom said.

Darin, like Agent Gibbs, stands firmly behind his rules, and only calls them "guidelines" when its absolutely necessary to break them. Gibb's rules are much broader, and he often refers to them as a code. I'm thankful Darin's are more specific.

(For anyone who would like to look over Agent Gibb's Rules, here's a good link: http://bit.ly/…)

(CZ/SK)

Posted at 5:37PM CST 12/07/14 by Katie Micik
 

Monday 12/01/14

Early Ice on Lake Superior, PNW Traffic Improves

OMAHA (DTN) -- Michigan's Great Lakes started to see ice develop on them Nov. 15, the earliest in at least 40 years, according to the Daily Great Lakes and Seaway Shipping News on Nov. 25.

This satellite photo from Nov. 21 shows ice starting to form on Saginaw Bay. (Photo courtesy of MODIS-University of Wisconsin)

The daily shipping newsletter said the Great Lakes Environmental Research Laboratory had reported that by Nov. 20, "Three of Michigan's Great Lakes had ice starting to form. Lake Superior and Lake Michigan were one-half percent ice covered, while Lake Huron had 1% ice. Lake Erie was not reporting any ice as of Nov. 20. Decent early season ice coverage records date back to 1973."

According to the GLERL, Nov. 21 "was the earliest date that all three Great Lakes already had ice since the better reporting of early season ice began. Lake Superior actually had ice forming on Nov. 15 of this year. That is the earliest ice on Lake Superior in the good data set. Lakes Superior, Michigan and Huron had ice 10 days earlier this year than last year. Lake Superior only had five and a half months without any ice on the lake."

In 2013, the ice began to form on Lake Superior Nov. 25 and the last trace of ice on the lake was not gone until June 5 this year, a new record for the lake.

The early ice means the shipping season is nearing an end.

According to the daily port reports from the Great Lakes and Seaway Shipping news, "Weather permitting, St Lawrence Seaway will close at 11:59 p.m. Dec. 24. The Welland Canal will close at 11:59 p.m. Dec. 26, and the Soo Locks will close at 11:59 p.m. Jan. 15, 2015. Vessels will be allowed to complete transits of the Montreal-Lake Ontario section and the Welland Canal until 4 p.m. on Dec 31."

PNW RAIL TRAFFIC SLIGHTLY IMPROVED

In its weekly update to the Surface Transportation Board, Canadian Pacific said, "We indicated last week that overall congestion has improved in the Pacific Northwest (PNW) supply chain, in particular on the offline component of this corridor.

"That has continued this week, resulting in improved overall transit times. The weekly grain car cycle time for this traffic is also improving as transit times improve. This in turn should result in greater placements," stated CP.

Grain shuttle (or dedicated grain train) round trips for the PNW region improved to 1.7 versus 1.62 during the past month.

However, traffic heading east has experienced some problems because of the unprecedented snowfall affecting Buffalo. "With respect to eastern grain traffic," CP said, "we are experiencing longer cycle times for returning empty hopper cars due to off-line delays, partly as a function of the snow storms in Buffalo. We expect this to impact car cycles and order fulfillment next reporting week as well."

Outstanding car orders owed in North Dakota were at 2,211 versus 2,684 the prior week, and were 3.84 weeks late, according to CP. Cars owed in Minnesota rose to 500 versus 374 the prior week, and were 1.06 weeks late. Cars due in Montana were unchanged versus last week at 150, and were 3.67 weeks late.

Meanwhile, BNSF reported a mix of results last week in delivering cars.

Cars due in North Dakota from BNSF dropped to 3,145 versus 3,340 the prior week. Montana's total cars rose to 1,381 versus 1,112 the prior week. Minnesota's total rose to 891 cars versus 809 the prior week. Shuttle turns per month to the PNW improved slightly to 2.4 TPM versus the previous week of 2.3 TPM.

BNSF told the Surface Transportation Board in its recent update, "We repeat our earlier caution against drawing firm conclusions based on the absolute values reported in BNSF's report or across the various railroads that are also submitting data."

BNSF added, it "will also continue to engage frequently and substantively with our customers through direct conversations, and through broader communications and letters, customer forums, meetings and broadcasts to provide real-time information around our service challenges, our short-term and long-term plans to increase network velocity, and our progress against those plans, and to ensure we hear their perspectives and feedback."

To see all of the Class 1 railroad service updates to the STB on Nov. 26, go to http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

(ES/CZ)

Posted at 3:39PM CST 12/01/14 by Mary Kennedy
 

Tuesday 11/25/14

Early Winter Weather Adds to Rail Problems

The early onset of winter-like temps and precip in the Midwest and Northern Plains led to delays and problems for rail traffic in the past week.

A CN grain car tagging along behind an oil train. (DTN file photo by Mary Kennedy)

In a weekly service update to customers, the BNSF railroad (Burlington Northern Santa Fe) reported, "The operation experienced some velocity challenges this week due primarily to frigid conditions continuing to impact the North and Central Regions. This unseasonably cold weather caused some modest traffic slowdowns as well as some negative effects on network fluidity."

However, BNSF officials do not expect the weather-related problems to continue for long. "With network infrastructure adapting quickly to this early winter environment, we expect a continued improvement in train flows and car velocity heading into December," BNSF stated.

Two derailments on Nov. 13, one in Casselton, N.D., and one on the Montana Rail Link line, also disrupted service last last week on the BNSF.

"Due to the incidents, we implemented some rerouting of trains to alleviate backlogs on affected subdivisions. Train flows and routing through this area have returned to normal," the weekly service report stated.

"With the strong volume of traffic that daily uses this line, traffic was staged through last weekend," said John Miller, BNSF ag vice president, in his weekly podcast. Staged means trains are holding, waiting to move into a terminal, due to backed up traffic.

Both the BNSF and Canadian Pacific (CP) have recently experienced service disruptions in the Pacific Northwest due to an ongoing labor situation at the ports, along with excessive traffic creating slowdowns. "We have responded by implementing temporary restrictions for some export/import traffic at several of our hubs," BNSF stated. "While hoping for a resolution in the near future, BNSF will continue to evaluate and, in some cases, implement additional procedures to minimize impacts on service."

The CP told the Surface Transportation Board in its weekly update, "As we indicated last week, overall congestion has improved in the Pacific Northwest supply chain, in particular on the offline component of this corridor. We expect grain car cycle times for completed trips to begin to improve over the next several weeks as the supply chain works through this re-set."

Overall cars due in the US from BNSF were at 6,321 and were 13.3 days late, the railroad reported. Of that total, cars due in North Dakota totaled 3,340 and were on-average 14.1 days late and 1,112 were due in Montana and were 13.1 days late. Shuttle turns per month to the PNW improved slightly from the previous week to 2.3 TPM.

The number of outstanding car orders in North Dakota owed by CP were at 2,684and were 2.94 weeks late, according to CP. Cars owed in Minnesota were at 374 and were 1.26 weeks late and cars due in Montana were at 150 and were 2.67 weeks late. Grain shuttle (or dedicated grain train) round trips for the PNW region were at 1.62 during the past month.

Here is the link to all Class 1 Railroad updates to the STB on 11-19-14: http://www.stb.dot.gov/…

CANADA RAIL PROBLEMS STILL NOT SOLVED

While Canadian railroads have made some progress in moving grain, some are still not meeting the required minimums set by the government. The Manitoba Co-operator reported a member of Parliament said the railroads "have not hit their targets for three weeks and no fines have been issued, not a single one."

"An enforcement process is underway, given CN's failure to meet the minimum grain volume requirements," Jeff Watson, parliamentary secretary to the minister of transport, told the Manitoba Co-operator. "That company is in fact facing fines and the enforcement process, as I said, is underway."

With the rules governing the weekly minimum grain volumes set to expire at the end of this month, concerns are mounting across producer groups and shippers.

"In 2013, weekly movement fell off the rails in week 12 or the week of October 27 and didn't recover until after mandated volumes were introduced by the federal government," wrote DTN Canadian Grain Analyst Cliff Jamieson. "Concerns are growing that rail service could deteriorate should minimum volume mandates be allowed to expire. An informal DTN 360 Poll resulted in 68% of respondents suggesting that the mandates should not be allowed to expire but rather, should be viewed as an important first step in improving rail service for farmers."

"Changes to the car-ordering system operated by Canada's two railways were highlighted in last week's press. In September, CN made changes to allow orders to be placed for just two weeks out, while in late October CP changed their system to allow for orders to be placed for a four-week window. This move is in stark contrast to the past where there were no limits placed on orders which resulted in a growing number of unfilled orders. Neither railway feels that this change in procedure will hamper their efforts to meet the weekly targeted volumes."

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary on Twitter @MaryCKenn

(CZ/SK)

Posted at 12:14PM CST 11/25/14 by Mary Kennedy
Comments (1)
It was my understanding that grain traffic is in competition with fossil fuel cargo, and that the latter has priority over grain.
Posted by Peter Lockwood at 5:45PM CST 12/09/14
 

Monday 11/24/14

UMR Shipping Season Comes to Close

OMAHA (DTN) -- "The Mississippi River will always have its own way; no engineering skill can persuade it to do otherwise," said Mark Twain. Mother Nature, too, has her own way and decided it was time to close the Upper Mississippi River for this shipping season until next spring.

Barges struggle to move through the ice-filled Mississippi River near Dubuque, Iowa, on Nov. 20, 2014 (Photo by Brad Hanson, KWWL News, Dubuque Bureau)

The U.S. Army Corps of Engineers, St. Paul District, said on Nov. 20 that they locked the last tow of the season for the St. Paul, Minn., area because ice conditions on the Mississippi River were making it hard for vessels to navigate.

According to the USACE, "The Motor Vessel Mary K Cavarra was locked through Lock and Dam 2, near Hastings, Minn., with four barges. Traditionally, the last tow heading south of Lock and Dam 2 has marked the unofficial end of the navigation season for the Twin Cities portion of the St. Paul District." This closing came earlier than normal and many elevators in that area scrambled to get their last barge loaded and sent downriver before it closed. The Gavilon elevator at Red Rock had posted this on their website last week: Special Message from Gavilon Grain - Red Rock: river closing early...bring all bean deliveries by this Sunday, Nov. 16.

The Mid-Mississippi corridor is expected to close at the end of November, unless the icing becomes a bigger issue downriver. KWWL, Dubuque, Iowa, reported, "At least four or five boats north of the Guttenberg Lock and Dam early Nov. 20 struggled to break through the ice." Lockmaster Marvin Althoff told KWWL, "It's a long and painfully slow process. The ice isn't new, but the timing is causing headaches. This is a little more ice than we normally have at this time of year on the river," he said. "As a result, we have a lot more tows up above that are wanting to get out yet and there are 22 boats navigating some pretty thick ice -- up to 8 inches thick in some places in the Mississippi River."

If you remember this past spring, the navigation season didn't officially start until April 16 when the Angela K reached St. Paul, Minn. The USACE said, "The spring start was one for the record books with ice thicknesses in Lake Pepin, near Red Wing, Minn., reaching 32 inches in some locations. This season was the second latest start to navigation in the district's history, too."

"Despite the late start and needing to close the 9-foot channel for 26 days in at least one location to perform emergency dredging after the June floods, the cargo tonnage is up more than 10% at the mainline locks from Hastings to Lock and Dam 10 in Guttenberg, Iowa," said Bryan Peterson, St. Paul District Mississippi River program manager. "Industries saved more than $300 million by using the navigation channel instead of overland shipping methods."

Mike Steenhoek, executive director of the Soy Transportation Coalition told the Minneapolis Star Tribune, "Corn and soybean growers within 70 miles of a river terminal usually find it economical to send their grain to river terminals, unless they sell it closer to home for animal feed, ethanol plants or other uses. But the recent delays, shortages and high costs to move export grain by rail are driving more business to barges. Normally, some grain handlers will say that the river's too far away and it just doesn't pencil out," Steenhoek said. "But with rail service being what it is, they're willing to drive further to access the river."

But now, that will all come to an end until next spring thanks to Mother Nature who decided to bring an early start to winter in the Midwest.

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/CZ)

Posted at 1:43PM CST 11/24/14 by Mary Kennedy
 

Monday 11/17/14

PNW Shuttles Slowed This Week by Cold, Snow; Casselton Derailment Adds to Slowdown

The early arrival of winter weather with record cold and snow in parts of the Midwest and Northern Plains slowed rail transportation of agriculture products this past week, according to one railroad official.

Cold and snow across northern parts of the U.S. this past week caused service interruptions on BNSF routes, according to company officials. (Courtesy photo by Roy Luck)

In the BNSF weekly podcast Friday, John Miller, BNSF's ag vice president, said, "Our manifest train size as well as crew van restrictions due to snow and road conditions in the north have been impacted." The weather affected the capital tier replacement along the Northern Corridor, causing major service interruptions this past week, he added.

The BNSF website reported that the operation was affected by the winter weather that hit much of the north and central regions of the country this past week. All-time record-cold temperatures for November were set in many locations, including some that had stood for over a century. While operation performance remained steady during the early portion of the week, there were some effects on network fluidity due to the unfavorable conditions.

Miller said that "while the pipeline to the PNW export facilities is down 10% week over week, daily deliveries by the BNSF continues to be seven to nine trains per day." He added, "Trains staged at the PNW have been moderate this past week and will remain so over the weekend."

According to the BNSF podcast, October was a record month for ag volume to the Pacific Northwest (PNW), setting records in North Dakota, South Dakota, Minnesota and Montana combined. Miller did say that shuttle turns per month (TPM) were not at the desired 2.5 to the PNW, but "our service is more consistent." That was in reference to the track improvements made by the BNSF in recent months along the northern corridor, expanding capacity. Miller also said that the BNSF will remain focused on servicing non-shuttle customers as well.

However, the weekly BNSF service update to customers stated that, "In addition, the labor dispute affecting operations at ports in the Pacific Northwest and California remains an ongoing issue. With work slowdowns causing some disruption to export/import traffic, BNSF will continue to evaluate and, in some cases, implement procedures to minimize any impacts on service."

The podcast was aired prior to the most recent setback, a two-train derailment at Casselton, N.D., Thursday night. The Grand Forks Herald reported that, "No one was injured when 12 to 13 empty crude oil cars from a westbound train and an unknown number of cars from an eastbound train carrying lumber derailed Thursday." The BNSF reported on their website Nov. 15 that, "The first track was put back into service at 09:35 p.m. Central Time on Nov. 14, 2014. The second track was put back into service at 11:50 p.m. Central Time on Nov. 14, 2014. Customers may experience delays of 36 to 48 hours on shipments moving through this corridor." This was unwelcome news for shuttle loaders east of the derailment who have reported slow turn times, which is also evident in the falling secondary freight costs that, as of Nov. 13, were at zero for the last period for November and at $0/$200 per car for December.

The BNSF reported that system-wide, cars owed are at 6,395 and on average are 14.5 days late. North Dakota is owed 3,139 cars and is 16 days behind; and Montana is owed 1.059 cars, 12 days behind. Here is the link to the BNSF and all Class 1 railroad service updates to the STB on 11-12-14: http://goo.gl/…

OTHER COMMODITIES FACING RAIL SHORTAGES

The cash ethanol market has been rising, partially due to rail logistic problems in both the East and West Coast markets. George Orwell, DTN/The Progressive Farmer energy reporter, said that, "Trade sources talked of a lack of rail capacity, especially for the West Coast, and a winter snowstorm in much of the country that made it difficult to deliver supplies to destination markets. Logistical problems across the country are keeping some trade hubs from being supplied adequately and on time."

According to the BNSF update to the Surface Transportation Board on Nov. 13, there were 100 loaded cars of ethanol and 128 empty ethanol cars that had not moved in greater than 120 hours during the week of Nov. 2 through Nov. 8. The total for ethanol cars not moved in greater than 48 hours but less than 120 hours was 915 loaded and 1,032 empties.

The Minneapolis Star Tribune newspaper reported on Nov. 16 that electric utilities that serve Minnesota say they still aren't getting enough coal. The article said that, "Two power companies that serve northern and western parts of the state have halted or reduced power generation at five coal-burning units. Almost all utilities are entering the winter with below-normal coal stockpiles that some executives say put the reliability of the electrical grid at risk. They blame persistent delivery problems at BNSF Railway, the major hauler of western coal burned in the Midwest. The railroad has struggled for a year to deliver traditional commodities like coal, fertilizer and grain while hauling increasing amounts of North Dakota crude oil." Electric utilities, which have long-standing relationships with BNSF, agree that the railroad is working hard. But they say it isn't enough, according to the article.

According to the Association of American Railroads (AAR), during January-October 2014, rail shipments of coal were up a relatively small 0.3% from the same period last year. "Coal is still by far the largest commodity volume moved by rail, with 4.9 million car loadings," said the AAR. "Power plant operators are seeking more coal deliveries by rail to rebuild their coal stockpiles, which were drawn down during last winter's colder-than-normal weather."

In its weekly service update to the STB, the BNSF reported there were 452 loaded cars of coal and 795 empty coal cars of that had not moved in greater than 120 hours during the week of Nov. 2 to Nov. 8. The total for coal cars not moved in greater than 48 hours but less than 120 hours was 995 loaded and 1,151 empties.

The BNSF told the Star Tribune that the railroad is taking major steps to improve service, including capital investments in track upgrades, as well as logistical moves to speed up deliveries. "We are in regular communication with our customers, working with them directly on their most urgent issues, and we are making progress in continuing to grow coal stockpiles," the BNSF said in a statement to the newspaper.

According to the Star Tribune, Minnesota's U.S. senators, Al Franken and Amy Klobuchar, and Gov. Mark Dayton have asked the Surface Transportation Board to require BNSF to file a "coal service recovery plan" with the government, a move the railroad strongly opposes. The Western Coal Traffic League, a trade association for coal shippers, and several other utilities have joined in the call.

"Winter is here for all practical purposes," Franken told the Star Tribune in an interview. "We're still digging our way out of backlogs caused by the extreme cold of last winter. There have obviously been increased shipping demands because of the crude. So this is a problem, and they need to address it."

The BNSF told all of its customers at the end of October that it will go into the 2014-15 winter season better prepared than ever before, especially if the United States experiences a return of the polar vortex. "The 2013-14 winter was one of the most severe winters the United States has experienced in decades with extreme temperatures that persisted for long periods and created special challenges for operating the railroad," said the BNSF. Here is the link to their Winter Preparations and Plans: http://goo.gl/…

Mary Kennedy can be reached at mary.kennedy@dtn.com

Follow Mary Kennedy on Twitter @MaryCKenn

(AG/BAS)

Posted at 12:33PM CST 11/17/14 by Mary Kennedy
Comments (1)
So why do Franken, Klobuchar and Dayton quite patronizing both coast enviros, and get a few pipelines built?
Posted by Bonnie Dukowitz at 6:10PM CST 11/17/14
 

Tuesday 11/11/14

Snow Snarls Harvest

The television monitors at Reagan National Airport looked like they were bleeding. Two thirds of the inbound flights faced delays related to this year's first big snowstorm, and I crossed my fingers that my flight route through Atlanta would get me home.

Many farmers woke up this morning feeling the same way -- hoping they'd still have time to finish up harvest before the death knell of a snowy winter.

Fortunately, I made it home without a hiccup. It looks like farmers have a pretty good chance of finishing harvest, too.

Monday's crop progress report shows that corn harvest is 80% complete, a far cry from where it was in 2009 -- the last record corn harvest. In fact, most major corn states are light years ahead of where they were in 2009. Check out the table below comparing the harvest completion percentages for those years.

State 2009 2014
IL 31 87
IN 41 71
IA 34 82
MI 16 34
MN 23 90
NE 30 79
ND 3 73
OH 37 67
SD 18 84
WI 23 50

"Greatest issues this year are in Michigan and Wisconsin -- but even in those states, harvest is more than double its percent progress compared with five years ago," DTN Senior Ag Meteorologist Bryce Anderson said. "And the Minnesota and North Dakota totals are obviously far, far better than back in 2009."

He said the forecast is cold and dry next week, so farmers are still likely to make more progress before winter shuts them down for good. DTN Cash Grains Analyst Mary Kennedy spent some her career in northwestern Wisconsin, and she thinks some corn could be left standing over the winter. But it's also not unusual in that area.

Wisconsin's crop progress report made for some interesting reading. Its headline: Farmers Race Oncoming Snow.

"Farmers were scrambling this week to get fieldwork done before oncoming winter weather. Rain and snow events late in the week interrupted fieldwork and drove up grain moistures in the eastern portions of the state. This precipitation made for slick field conditions and wind reportedly lodged standing corn in some areas. However, conditions across the rest of the state were much drier, allowing good progress on fall fieldwork. With substantial snow and much colder weather in the forecast, reporters were concerned about the amount of corn and soybeans still to be harvested and the amount of manure still to be spread. Several reporters noted farmers working through the night to clear fields while conditions allowed. The corn silage and soybeans harvests were nearing completion, as was winter wheat planting. Grain driers were going full blast across the state but some producers were reportedly still delaying their grain corn harvest until moisture content falls naturally." (You can find the whole report here: http://1.usa.gov/…)

I'm glad I made it home from Monday's USDA lockup, and I hope farmers can say the same about this year's corn harvest.

(AG/CZ)

Posted at 9:55AM CST 11/11/14 by Katie Micik
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