Market Matters Blog
Mary Kennedy DTN Basis Analyst

Friday 06/13/14

Trains Take Longer to Get to Destination and Back

In its weekly podcast on June 6, the BNSF reported that soft track conditions along the Northern Transcon route have slowed the process of moving cars. John Miller, group vice president of Agricultural Products said, "While we expected those soft conditions to have improved by now, we continue to experience a very full and sluggish network, which has been caused by less-than-optimal track conditions at multiple locations and service interruptions caused by weather-related derailments including a wind-driven derailment and recent tornado activity. These less-than-optimal conditions mean that we must operate trains at slower speeds to keep our operations running safely, and incur periodic service delays while tracks are being repaired."

The Federal Mattawa entering Duluth port to load grain. (Photo courtesy Kenneth Newhams, Duluth Shipping News)

This slowdown could be seen in shuttle turns per month (TPM) which dropped from one week ago. System wide on the BNSF, shuttle TPM went to 2.1 versus 2.3 the prior week. Shuttles moving to the PNW are taking longer at 2.1 TPM versus 2.5 the prior week, causing rail corn basis for shuttles to rise. Miller said that trains returning to the interior from the PNW face longer transit times but should improve by the end of June.

Miller went on to report that past-due car orders decreased for the week ending June 6 "with help from reductions in the number of shuttle sets, which has freed up additional equipment towards past-due orders." Average cars past due system wide are at 12,406 versus 13,050 the prior week with days late average at 28.3 versus 28.6 the prior week. North Dakota is owed 6,360 cars versus 6,703 the week prior; Montana is owed 2,691 cars versus 2,833; Minnesota is owed 1,269 cars versus 1.505 and South Dakota is owed 277 cars versus 369. Days late in Montana increased the most at 31.8 days late versus the prior week of 29.7 days late. Soft tracks and repairs along with continued rains have slowed traffic in the Northern Transcon route of Glasgow, Mont. to Minot, N.D.

The CN Railway reported similar problems with soft tracks. In its State of the Railroad report for June 12, the CN said," As a result of unusually warm temperatures and high water levels, trains running along the Sprague and Fort Frances subdivisions remain subject to speed restrictions. Trains running between Winnipeg, Manitoba, and Ranier, Minn., in either direction continue to operate at slower track speeds than normal. A recent track washout, located south of Ranier on the Rainy subdivision and since repaired, has caused additional delays to traffic in the area. Affected shipments continue to encounter some delays."

Canada Still Facing Backlog

The struggle to clear the prairie backlog of grain continues. Cliff Jamieson, DTN Canadian grains analyst said, "terminal unloads at the west coast and Thunder Bay totalled 725,700 metric tons in week 44, the week ending June 8. This was below last week's 806,300 mt, which was the highest terminal receipts seen this crop year, while 92.9% above the three-year average for the same shipping week. Thunder Bay has acted as an important relief valve for prairie grain, with a late start to shipping resulting in the highest volume May in 16 years and 90% above the five-year average."

"The debate continues around the final set of rules that will be included with Bill C-30, the Fair Rail for Grain Farmers Act." said Jamieson. "The Western Grain Elevators Association is asking for the minimum shipping target to be raised from 11,000 cars per week for the two railways combined to a range of 11,000 to 14,000 cars. They have also requested minimum shipping targets by shipping corridor to be included, so that sales can be fulfilled in all directions, given the challenges faced over the winter in fulfilling obligations into markets such as the U.S., Mexico and even domestic markets."

Despite the increased movement, Canada's total grain carryout stands to exceed 20 mmt at the end of July, the largest in decades." One grain industry official has suggested the negative impact on markets could last throughout the 2014/15 crop year and even longer," said Jamieson. "Canadian producers continue to face excessively wide basis levels and weak cash bids in relation to prices paid in United States markets."

Saltie Anchored in Duluth Harbor Waiting to Load Grain Finally Enters Port

After sitting within short distance of the Twin Ports entrance for more than three weeks, the Federal Mattawa finally made her way inside the port early in the week. The Duluth Shipping News reported that "after 23 days of hanging around outside the Aerial Lift Bridge, the Federal Mattawa came in early Tuesday evening. The grain carrier was given the go-ahead to ply its way to the CHS dock in Superior, where it was deemed there was enough grain to fill the ship."

Adele Yorde, spokeswoman for the Duluth Seaway Port Authority, told the Daily Great Lakes and Seaway Shipping News the long wait for the Federal Mattawa has been "unusual," much like the season so far, as ice conditions on Lake Superior slowed shipping into May. "The ship started on the St. Lawrence Seaway in late April and, after dropping cargo in Hamilton, Ontario, made its way to Thunder Bay by May 8. It was "repositioned" to Duluth because of backups in the Canadian port," Yorde said, "and then has had to wait out other salties loading grain." A shortage of grain at various terminals in the Twin Ports has also slowed saltie loadings as months of rail issues have caused delays to grain cars destined for Duluth." To see more about the Federal Mattawa, here is the link to Duluth Shipping News: http://duluthshippingnews.com

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

Follow Mary Kennedy on Twitter @MaryCKenn

(SK)

Posted at 11:42AM CDT 06/13/14 by Mary Kennedy
Post a Blog Comment:
Your Comment:
DTN reserves the right to delete comments posted to any of our blogs and forums, for reasons including profanity, libel, irrelevant personal attacks and advertisements.
Blog Home Pages
November  2014
S M T W T F S
                  1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30                  
Subscribe to Market Matters Blog RSS
Recent Blog Posts
  • Early Winter Weather Adds to Rail Problems
  • UMR Shipping Season Comes to Close
  • PNW Shuttles Slowed This Week by Cold, Snow; Casselton Derailment Adds to Slowdown
  • Snow Snarls Harvest
  • Weekly Railroad Updates Show Mixed Results in Service Improvements
  • Sudden Closure, Dredging Slow Lower Mississippi Traffic
  • CFTC Fixes Ag Concerns on Residual Interest
  • Informa Sees Corn Crop at 14.49 BB, Beans at 3.99 BB
  • Rail Delays Continue
  • Daily Price Limits to Shrink Over Weekend
  • Weekly Rail Updates Disappoint Shippers
  • Acreage Arguments
  • Crude Crashes to 4 Year Lows
  • STB "Ups the Ante" for Railroads
  • Informa Pegs Bean Production Above 4 Billion Bushels
  • Senators Request USDA Study on Rail Service Delays
  • Industrial Reports to Make a Comeback in 2015
  • Elevators Full; Grains Get Grounded
  • Barge Freight Surges Higher
  • A Demand Optimist