Market Matters Blog
Mary Kennedy DTN Basis Analyst

Friday 02/21/14

Barge, Rail Logistics Still Plagued By Snow, Ice

From the Midwest to the East Coast, north into Canada and south to the Gulf, combinations of snow, ice, fog and rain have impeded travel on rivers and railways.

The Canadian National Railway website published a service update early this week that stated: "The CN network is currently adjusting to heavy winter-related traffic backlogs at various locations and, as a result, some shipments will experience delays during the next few weeks as we recover."

Grain movement in Western Canada remains well behind schedule, according to DTN Canada Grains Analyst Cliff Jamieson, with reports suggesting the two railroads are 51,000 cars behind, while 40 ships remain at the Port of Vancouver and another 17 ships remain at the Port of Prince Rupert. "Canada's reputation as a reliable supplier is being questioned by long-term customers such as Japan, while reports suggest that a U.S. General Mills plant imported Scandinavian oats to replace Canadian supply that can't be delivered," Jamieson said.

Jamieson added, "In a brief presentation to the House of Commons Agriculture Committee, both railroads reported that the sheer size of the crop that no one saw coming, the cold weather since December which has resulted in the need to shorten trains and also the complexities of expanding capacity on short notice in order to meet short-term demand are behind the service short-fall. At the same time, both railroads expressed their confidence in their capabilities when the weather improves. One railway representative suggested that the fleet is currently 'right-sized' for the task. Premier Brad Wall has named a panel responsible to urge the railways to implement short-term measures to clear the backlog, while adopting long-term measures to meet the future needs of the industry."

In the U.S., the Surface Transportation Board is closely monitoring rail service issues after rail customers complained about lack of power and delay of car placements having a negative effect on their businesses. Many shippers have been "bought in" by buyers because they are unable to perform on contract due to lack of cars. Shippers have also had to pay inflated prices in the secondary freight market to acquire rail cars above the cost of tariff.

The BNSF reported this week they have seen some improvement in the Upper Plains due to a break in poor weather along with their ongoing commitment to work through the delays via their 24 hour command center. Their Midwest Rail Operations update on February 18 stated: "Improving weather conditions across the network and ongoing BNSF actions are enabling progress toward improved rail and hub operations. Better weather which is projected for the remainder of the week will minimize the impact of recent snow accumulation (nearly six inches in the Chicago area)."

However, according to a podcast recorded Feb. 19, John Miller, group vice president of agricultural products for BNSF said, "Past due rail cars in the U.S total 11,066 with 5,061 due in North Dakota, 2,415 due in Montana, 1,417 due in South Dakota and 1,225 due in Minnesota. The average days that trains are delayed are 15.4, with North Dakota delayed 17 days, Montana delayed 19 days, South Dakota delayed 16.4 days and Minnesota delayed 14.3 days."

Miller went on to say, "Shuttle time average is 2.0 with the turnaround time for the PNW at 1.8 per month. The empty car departures from the PNW are experiencing episodic delays due to rain and snow there and mudslides in north Seattle."

The entire podcast can be found on the BNSF website at:

According to the USDA weekly Grain Transportation report, "U.S. railroads originated 18,265 carloads of grain during the week ending February 8, down 12% from last week, up 4% from last year, and 8% below the three-year average. This was the smallest weekly volume transported by rail (excluding the week of December 25) since the harvest got underway at the beginning of October. All railroads have been experiencing severe winter weather with subzero temperatures and heavy snow. Weather conditions have compounded disruptions, interfered with equipment operations, and contributed to delays."

U.S. waterways have begun to improve in the Lower Mississippi River after last week's winter storm created more problems at the Gulf. River sources reported the Lower Mississippi is in good shape after a temporary shutdown early in the week due to a chemical spill that occurred on the bridge at Vicksburg. The Mississippi River harbor from Baton Rouge to the Gulf is in good shape, but the port remains congested. Grain vessels are waiting to load due to the poor weather the past few weeks curtailing operations at times. Also adding to the delays of 12 to 21 days is the slow arrival of barges from the Midwest as ice conditions have either stopped or slowed movement down river. USDA reported for the week ending February 15, 342 grain barges moved down river, which was 16% lower than the prior week and 739 grain barges unloaded in New Orleans, 4.5% lower than the prior week.

As of February 20, ice was still impacting operations on the Illinois River and in the upper Ohio River. Lock delays are occurring on both rivers due to ice jamming. On the Illinois River, which has been closed for the past few weeks due to excessive ice, the dam at Peoria is experiencing delays caused by excessive ice above and below the lock and in the lock chamber. At LaGrange, the dam is operating, but with delays. Ice is making it difficult to pull the locks, so an assist boat is required in both directions and an 89-foot width restriction is in place.

As the weather warms up, the problems will become rising water due to ice and snow melt. "Although some areas of the Midwest have experienced temperature increases, ice accumulations continue to slow barge operations," USDA stated. "Illinois River grain movements for the first seven weeks of the year were 968,000 tons, 31% lower than the three-year average." On February 21, the Mississippi River at St. Louis was 4.1 feet above zero gauge, nearly 6 feet higher than the day before and is expected to rise to 10.2 feet above zero gauge by Monday. Just below St. Louis, the rock removal at Thebes slowed barge traffic last week, along with an ice gorge which finally broke apart early this week. The Coast Guard has determined that tows up to a max of nine barges will now be allowed to pass through that area at any time without restrictions. The rock removal is expected to be completed by mid-March in time for the spring opening of the very upper portion of the Mississippi River.


Posted at 10:58AM CST 02/21/14 by Mary Kennedy
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