Editors' Notebook

Rail Lags; Farmers Hold Grain; River, Great Lakes Still Waiting for Ice to Thaw

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
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USCG cutter Mackinaw in Port of Duluth. (Photo courtesy of Kenneth Newhams, Duluth Shipping News)

OMAHA (DTN) -- Farmers who haul grain to the elevator in Beach, N.D., are not happy when Manager Paul Lautenschlager tells them if they sell grain today, he cannot take it at the elevator until June.

Lautenschlager said the railroad still owes him 300 cars, which accounts for at least one-fourth of his handle. Because of that, he cannot take contracted and/or spot grain from his patrons.

Farther east in Finley, N.D., the shuttle station has been receiving shuttles and experiencing good turnaround times, according to manager Dave Fiebiger. Not all shuttle stations are having the same luck. Reports that shuttle stations in the western part of North Dakota are still looking for car placements to pick up, and farther north, one station official said he is still 500 cars behind.

Elevators on the Canadian Pacific are no better off. One shipper in north-central North Dakota said he is still waiting for his "small" unit train ordered last November and his 100-car train he ordered for January has not arrived, either.

Shuttle turns per month (TPM) improved in the Texas Gulf to 3.8 turns per month, according to the Burlington Northern Santa Fe (BNSF) April 4 podcast. Trips to and from the PNW were still at 1.8 TPM. "Improvements may be uneven for a while," said John Miller, group vice president of agricultural products. While the overall shuttle TPM in the U.S. was still at 2, Miller said, "overall volume of wheat in the Texas Gulf doubled because of the increase in turn times per month in the Gulf."

Slight improvements were made in the cars past-due count, but as previously discussed, some elevators aren't seeing the same results as others. The total of cars owed in the U.S. was 15,127, down 8% from last week and placements are 25.7 days late, which is actually up from 24.4 days late one week ago. North Dakota is behind 7,211 cars and 25.4 days late; Montana is behind 3,487 cars and 29 days late; Minnesota is behind 1,199 cars and 27.1 days late; and South Dakota is behind 1,158 cars and 26.9 days late.

The entire April 4 podcast can be heard here: http://goo.gl/…

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BNSF railroad spokesman Steve Forsberg was quoted by the Lincoln, Neb., Journal Star newspaper saying, "There is nothing systemically wrong with the system that cannot be corrected. We are taking aggressive short-term action in over-resourcing the railroad. That includes bringing in extra crews, locomotives and equipment to increase fluidity to the system and work down the past due orders." He said an increase in intermodal traffic, oil and oil-related traffic, coal transport and a "compressed" grain harvest all added to the growth of traffic on the railroad.

The U.S. Surface Transportation Board held a public hearing Thursday in Washington, D.C. See DTN's coverage by Chris Clayton in Ag News, "STB Hears Rail Complaints."

CANADA WANTS RAILROADS TO PAY

Both CP and CN railroads have picked up their game with indications that they may each achieve the 500,000 mt minimum target as set by the Canadian federal government's Order in Council in the current shipping week. DTN Canadian Grains Analyst Cliff Jamieson said, "Mark Hemmes of Quorum Corp, a company that monitors the Canadian grain transportation system, has suggested that the backlog of cars on the Prairies has fallen 12% to 68,802 cars as of April 6, down from 78,154 cars the previous week. Over 6 million metric tons awaits shipments just to clear the backlog.

"Meanwhile, the House of Commons Agriculture Committee approved an amended version of Bill C-30, the Fair Rail for Grain Farmers Act, after granting the Canadian Transportation Agency the power to force railways to compensate shippers for damages incurred due to service failures as defined in service contracts arranged between shippers and the railways. This could be the missing piece of the puzzle that the Prairie grain shippers have been advocating for."

CN CEO Claude Mongeau has been vocal this week, speaking out against the move toward government-mandated grain shipping targets, the role of the grain companies in the creation of the current mess and the potential negative impacts to other commodities as a result of the increased focus on grain. "This is bad policy," Mongeau told the Winnipeg Chamber of Commerce, "this is bad, bad policy made in the heat of the moment."

GRAIN SHIPPING SEASON SLOW TO START ON MISSISSIPPI RIVER, LAKE SUPERIOR

Last year on Lake Superior, the saltie season started on March 30, the earliest start on record, and as of April 10 of this year, no saltie has made it to the Soo Locks, let alone the Port of Duluth Superior, and none are expected until late April, according to Adele Yorde, public relations manager for the Duluth Seaway Port Authority. Salties are ocean-going ships that come in to port to load grain bound for international markets. The last saltie to take up residence in the Port of Duluth-Superior was a vessel loaded with durum bound for Italy and once it left port on Dec. 19, the 2013 grain shipping season was closed.

Yorde said currently, "Lakers anxious to deliver iron ore and coal are moving very slowly, slogging their way through thick ice in the locks and rivers and across the Great Lakes. Because ice coverage is still over 60% on Lake Superior and sheets of ice have moved and stacked with strong winds to create 'rubble fields' and walls of ice too dangerous for ships to navigate on their own, they are moving in convoys." Yorde added, "The convoys are led by two icebreakers that can withstand heavy ice: the U.S. Coast Guard cutter Mackinaw and the Canadian ice breaker Pierre Radisson." For more information and updates, go to the Duluth Shipping News website: http://duluthshippingnews.com

On the Upper Mississippi River, the delay to the shipping season may be one of the latest on record. With the thickest ice in 17 years on Lake Pepin this past winter, barges are unable to make the trek into St. Paul until ice on the lake is 15 feet or less. On Wednesday, the USACE St. Paul District measured the ice on Lake Pepin at 22 feet, an improvement from last week's measurement. Thanks to the recent warm up, parts of the lake have thawed with ice in spots at less than 16 feet, but barges won't move through Pepin until the USACE deems it to be safe enough not to cause damage to vessels. Shippers in the St. Paul District are still hoping to see their first barge Easter weekend or shortly thereafter, depending on how generous Mother Nature is with warmer temperatures.

Senior Ag Meteorologist Bryce Anderson said, "Weekend temperatures (Saturday/Sunday) will be quite mild in the upper Midwest, but will then turn colder during next week with overnight lows dropping to the mid-20s by Tuesday and Wednesday, and then in the low to mid 30s by the end of next week. High temperatures will cool to the low 40s Tuesday and Wednesday, then will settle into the mid-50s range through the Easter weekend."

The most recent Lake Pepin measurements can be seen here: http://www.mvp.usace.army.mil/…

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

Follow Mary Kennedy on Twitter @MaryCKenn

(CZ/AG)

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