Market Matters Blog
Mary Kennedy DTN Basis Analyst

Friday 05/02/14

Lake Superior Ship Traffic Improves, But Ice Remains

OMAHA (DTN) -- As the spring days lengthen, waits for railcars in the U.S. are shortening, albeit by small amounts. Systemwide, the BNSF owes 14,335 cars vs. 14,618 one week ago.

The Whitefish Bay, fourth of a seven-ship convoy arriving early morning in Duluth on April 30. (Photo courtesy of Ken Newhams, Duluth Shipping News)

South Dakota saw the greatest drop in the number of railcars pending with shippers currently owed 509 cars vs. 671 cars the prior week, The BNSF said in its April 25 podcast.

However, shippers still wait for cars, especially in North Dakota, Montana and Minnesota. North Dakota is waiting for 7,101 cars vs. 7,175 the week prior; Montana is waiting for 3,116 cars vs. 3,217 the week prior; and Minnesota is waiting for 1,488 vs. 1,496 cars the week prior.

BNSF reported system velocity (miles per day) "increased 5% to 193 MPD, with agricultural products showing the highest weekly improvement, which came in 11% better than the prior week, also driven by improvements in our North Region. For the week ending April 22, trains holding counts, which is the number of trains waiting due to congestion or a critical resource, decreased 12% when compared to the previous week and 47% since the week ending Feb. 7." Still, BNSF remained 25.7 days late in delivering cars vs. 25.4 one week ago.

Through the week of April 22, BNSF shipped more than 2,500 cars, equal to 22 trains carrying fertilizer. "With the spring planting season about to begin, we are also making good progress in our delivery of fertilizer to those customers who are getting ready to plant this year's crop."

Here is the link to see their fertilizer shipment report to the Surface Transportation Board on April 25: http://goo.gl/…

However, fertilizer movement and availability does not seem to be a problem. "As no one is in the fields yet, there is all kinds of fertilizer available now," Dave Kjelstrup, who farms near Washburn, N.D., said. "It has come in to Minot by rail on the BNSF, plus a lot of local truckers are hauling it from somewhere in the Red River Valley north of Fargo. It's too wet here to even spread now, so I don't think fertilizer will be an issue."

According to the Canadian Pacific Railroad, last week saw increases in train speeds of 7%. "The significant reduction in trains staged in and around the Chicago area by other carriers has assisted in the improvement. CP currently has no backlog."

The CPR added a new train pair from Canada to the United States to support both grain and fertilizer service. Here is the link for see the full update: http://goo.gl/…

TRANSPORT CANADA: RAILROADS MEETING TARGETS

"Transport Canada is on the record suggesting the railroads are meeting their targeted movement of 1 million metric tons per week," said Cliff Jamieson, DTN Canadian Grains Analyst. "Federal Agriculture Minster Gerry Ritz suggested the same in Parliament on Thursday. Week 37 data for the week ending April 20 shows the combined west coast/Thunder Bay terminals receiving only 544,900 mt of all grains, far from the weekly target of 1 million metric tons. The gap will be narrowed by domestic movement as well as U.S. bound cars, although it is doubtful that total movement could have achieved the 1 million metric ton mark during this week.

"The Canadian government's initiative to pass Bill C-30, or the Fair Rail for Grain Farmers Act, was stalled on Thursday as the House speaker ruled the amendments to the bill proposed by the House Agriculture Committee were out of order. The end result was a motion passed which would grant the agriculture committee the powers to introduce the amendments, with the bill to be returned to the committee for a meeting on Monday, while the exact same bill complete with amendments will be returned to parliament for a third reading at a later date."

Meanwhile, it is expected that the railway lobby effort is focused on preventing this bill. During CP Rail's annual general meeting in Calgary on Thursday, CP CEO Hunter Harrison told shareholders that while CP will follow imposed regulation, damage to the competitiveness of Canada's railroads is a possibility over time.

"Canada has the finest rail system in the world ... Be careful, be careful, about playing with a winning combination. Because this could turn around quickly," Harrison said, according to the Calgary Herald.

FIRST SALTIE OF SEASON ARRIVES IN THUNDER BAY

The Federal Elbe was the first saltie to reach Thunder Bay, arriving Monday, April 28. Currently, 20 vessels are reported to be waiting to load grain at Thunder Bay. This should be good news to the CP railroad who stated in their recent update, "Ongoing vessel delays at the port of Thunder Bay due to ice conditions on the Great Lakes are impacting grain cycle times." The Great Lakes ice coverage was at 23.5% with Lake Superior nearly 50% ice covered, according to an April 30 NOAA report.

The Twin Ports of Duluth/Superior were busy Wednesday -- a welcome sight after traffic has been so slow in and out of the ports. Adele Yorde, public relations manager for the Duluth Seaway Port Authority, said, "With the help of Coast Guard ice cutter Mackinaw, seven lakers arrived in Port of Duluth-Superior Wednesday. Finally looks like the real start of a shipping season here."

According to the Duluth Shipping News, "The Mackinaw led a convoy of boats that arrived off the Duluth piers on April 30, 2014. Before they came in, the CSL Assiniboine ran into some ice problems, stalling a seven-boat convoy on its way in. However, the Mackinaw was right there and after a couple hours of working the ice, the Assiniboine was on her way."

However, no salties have made it to the Twin Ports yet. According to the Duluth Shipping News schedule, the first grain vessel, the Apollon, is expected to arrive at CHS Elevator 1 on Sunday, May 4. Here is a link to see all the traffic that moved in and out of the Port on Wednesday, courtesy of the Duluth Harbor Cam: http://www.youtube.com/…

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

Follow Mary Kennedy on Twitter @MaryCKenn

Posted at 2:14PM CDT 05/02/14 by Mary Kennedy
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