The Surface Transportation Board (STB), the federal entity with regulatory oversight over the rail industry, issued a new directive this week requiring BNSF Railway and Canadian Pacific Railway to provide detailed reports on their plans to eliminate backlogs of grain shipments, and to submit weekly reports until the problem is resolved. Previously, the STB required BNSF and CP to submit reports on their spring deliveries of chemical fertilizers to farmers, mostly in the upper Midwest and Great Plains but as far south as Texas. These directives follow a STB hearing earlier this year at which ASA testified.
Rail service along the northern tier has experienced significant backlogs and service problems resulting from explosive growth in oil and gas shipments, bumper crops of corn and soybeans and severe winter weather conditions that stressed the rail delivery network.
Going forward, one concern for farmers and grain shippers is that the industry is now facing the start of wheat harvests, which can draw off some grain hoppers this summer, and that corn and bean shippers could be scrambling for enough cars and locomotives right up to the next fall harvests. This concern is reflected in the STB notice, which states, “Although the data submitted by both railroads indicates some initial progress toward reducing their grain car order backlogs and grain car delays, the Board remains very concerned about the limited time period until the next harvest, the large quantities of grain yet to be moved, and the railroads’ paths toward meeting their respective commitments. For these reasons, pursuant to 49 U.S.C. § 721(b), the Board will direct CP to provide its plan, and BNSF to provide an updated plan, by June 27, 2014, to reduce their respective backlog of unfilled grain car orders and resolve grain car delays (for CP, on its United States network) including their timeline for doing so.”
Click here to read the full STB notice.