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Home » Business News/Analysis, Infrastructure, North Dakota, Opinions, South Dakota, Terminals Transport

Rail Bottleneck for Grain, Ethanol Shippers

Submitted by on April 2, 2014 – 5:27 pmNo Comment

by Peter Harriman (Argus Leader)  …But while BNSF Railway spokeswoman Amy McBeth says the problem is operational and not systemic, and the bottleneck will be cleared, Soy Transportation Coalition Executive Director Mike Steenhoek points to the continued growth of both oil and agricultural traffic and wonders how much more the rail system can absorb.

“It’s a real concern. This is not something you can remedy with the snap of fingers,” he said. “Even if the growth estimates are half-accurate, we’re going to have to have a lot of infrastructure.”

While more than one railroad has been responsible for shipping delays of farm commodities, the problem is centered around BNSF, which serves the North Dakota oil industry. The railroad is a victim of its own success. It accounted for fully half the growth in new Class 1 rail traffic last year, McBeth said.

“Last year, there were 800,000 new units carried on all Class 1 U.S. railroads. BNSF had 400,000 units of that growth,” she said.

Brian Jennings, executive director of the American Coalition for Ethanol, said 80 ethanol industry representatives planned to make shipping concerns an issue when they met with administration officials and members of Congress at their annual Washington, D.C., fly-in Tuesday and Wednesday.

It is not just ethanol that has seen shipping slow to a crawl. Normally, a round trip for a unit grain train from South Dakota to the Pacific Northwest ports is 11 to 12 days, according to Steenhoek (Soy Transportation Coalition Executive Director Mike Steenhoek). Now such trips are taking as long as 20 to 22 days.

“I’m starting to hear reports about the ability to forward contract to fall of 2014. There is not a lot of confidence in rail supply and in rail service. It’s making farmers jittery. They can’t forward contract, because the elevators are saying they’re not comfortable purchasing now because they don’t know if they can get rid of it,” Steenhoek said.

“All indicators I see show this is going to be a problem that persists,” Steenhoek said of rail shipping. Even in dedicated rail corridors, laying additional track takes time. So does building new locomotives and new grain and tank cars.   READ MORE and MORE (KTTC) and MORE, MORE (US Department of Energy Energy Information Administration) and MORE (Star-Telegram) and MORE (The Wall Street Journal (subscription fee)) and MORE (Renewable Fuels Association) and MORE (Renewable Fuels Association letter) and MORE (Ethanol Producer Magazine)

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