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A familiar story from south of the line

The arguments from both railways and their critics are the same, and so is the result —
a clogged system with farmers paying the price

Reading Time: 2 minutes

Officials aren’t going to do much to make the trains run on time to alleviate the 2014 ag rail problems. Farmers and elevators need to prepare to suffer through 2015 — and maybe 2016 and beyond.

That’s my prediction after listening to nine straight hours of the U.S. Surface Transportation Board hearing on the railroad difficulties that have beset farmers and the elevators trying to move grain to markets this year.

There were nine formal panels, not including elected congressional officials and those who want their jobs.

Among those testifying was George Sinner, a state senator running for Congress who admonished the transportation board to use its emergency powers to do something about a crisis that has hit farmers in the pocketbook this year. A banker by trade and a Democrat, Sinner called upon it to do such things as allow other railroads to use tracks operated by Burlington Northern Santa Fe Railway and CP Rail.

Stevan Bobb, BNSF’s executive vice-president and chief marketing officer, urged the board to avoid using its powers to add service on the railroad, saying it simply “will not” help the situation, and will add congestion. BNSF and CP are anxious to let people know they are shipping record numbers of grain cars.

BNSF has been friendlier, more transparent than CP and seems to be investing more heavily in infrastructure. But even five per cent increases registered in recent months over previous records are unimpressive if the amount being shipped is simply too little, too late to clean out the 2013 crop to allow for the 2014 crop to get to market. And this is before expected growth in oil production (shipments) takes place.

John Brooks, a CP vice-president for marketing and sales, said a “common carrier” has responsibilities, but he wondered whether that means his company has to handle 40 per cent annual growth. Good question.

Rep. Kevin Cramer, R-N.D., defending his job against Sinner, repeated earlier questions about whether the Canadian government’s ag shipping mandates on the CP and Canadian National railroads have caused a disparity in service for Americans. No penalties here, other than public hearings. While musing about potential U.S. countermoves and government actions, Cramer urged the board to be very cautious in any actions.

Several testifiers expressed appreciation to the board for requiring weekly reports on ag shipping.

In its filings, CP could only report “open orders” — a figure that included “phantom” orders, that exceeded its entire fleet. CP has cut the open orders by implementing a new ordering system that forced people to cancel these old orders. Shippers chided CP officials by saying the reason there might be phantom orders is that the shipper had to cancel marketing opportunities — put the grain on a truck or move it to another railroad.

For its part, CP denied any bullying to transition shippers to the new program, or any retribution against complainers. If this is true, why are elevator operators so consistently paranoid about sharing thoughts about rail service?

It strikes me that the board hearing featured several players in the shipping business — elevator representatives, farmers — even the Amtrak (passenger rail) folks and the people who make coal into electricity — all in dire straits from lack of predictability in the system.

The only player missing? Big oil — the one farmers wanted to hear from the most.

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