The Burlington Northern Santa Fe Railway continues to be a bottleneck for the region’s farmers. As of Aug. 15, BNSF reported 2,671 past-due grain railcar orders, including 119 in Washington state, 599 in Montana and 1,262 in North Dakota. The cars were an average of 17 days late. The railroad is required to provide weekly reports to the federal Surface Transportation Board because of its chronic backlog.
Part of the problem is the railroad’s fault, and part of it is the fault of Congress and the Obama administration.
The problem: The railroad’s business has increased beyond its capacity. Normally, that’s a good problem for a business. Most businesses would love to have so much demand for their services that they had to turn away customers.
But in the case of BNSF, most of its customers have no other viable alternatives.
At the same time, the lack of a pipeline to transport oil from Alberta and North Dakota to refineries in Texas and elsewhere leaves the oil and gas industry with no alternative but to use railroads. The coal industry, which the federal government is attempting to squeeze out of the domestic U.S. market with more environmental regulations, is also selling its product overseas. Again, railroads offer the only economic alternative.
In each case, railroad managers and federal policymakers have shown a shocking lack of foresight that is now impacting farmers and other rail users. To its credit, BNSF is spending $1 billion this year in the region to expand and update facilities and add capacity, but that won’t help farmers much near-term.
The Keystone XL Pipeline, which was proposed six years ago, would double the region’s pipeline capacity and take much of the pressure off railroads for transporting oil. Instead, the pipeline has been a political hot potato in Washington, D.C. Pipeline opponents say the oil and gas will contribute to climate change.
In the meantime, seasonal shippers — farmers — have been delayed. Farmers have to wait to move their wheat and other crops to ports for export. At the same time, companies that relied on timely rail service to move fruits and vegetables cross-country have been pushed aside altogether.
Ask the folks who used to operate Cold Train, which recently closed its doors. The company offered refrigerated railcars and multi-modal trailers that allowed Pacific Northwest farmers to transport their fresh fruits and other produce to Midwest and East Coast markets in a matter of a few days.
Not anymore. Cold Train shut down, citing BNSF’s lack of rail capacity and poor on-time performance. According to Cold Train’s managers, BNSF told them it could no longer provide the trains to meet its needs. In addition, BNSF’s on-time record dropped from 90 percent to 5 percent and its rates increased, leaving Cold Train with no alternative but to close, the company said in its press release.
That leaves many Northwest farmers wondering how they will move their crops this year without reliable train service. Trucks continue to be in short supply.
Without a pipeline that would take much of the pressure off the railroads, the problem will only continue.
The question is not whether the Keystone XL pipeline should be built. It’s why hasn’t the pipeline already been built?