Market Matters Blog

Railroads Getting Better Grades for Service

Mary Kennedy
By  Mary Kennedy , DTN Basis Analyst
Connect with Mary:
(DTN photo by Mary Kennedy)

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.

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.

P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]

"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)

P[] D[728x170] M[320x75] OOP[F] ADUNIT[] T[]
P[L2] D[728x90] M[320x50] OOP[F] ADUNIT[] T[]

Comments

To comment, please Log In or Join our Community .