Rail Car Deliveries Still Lagging


Shippers worry that upcoming harvest will but railroads further behind.

by Mary Kennedy, DTN Basis Analyst

OMAHA (DTN) — Deliveries of past-due rail cars are still lagging in parts of the U.S. and Canada, and grain shippers worry the upcoming harvest will put railroads even further behind schedule.

A North Dakota Canadian Pacific Railway shipper told DTN he just loaded a wheat train that was ordered for March 3 and his next train that comes will have a March 6 want date. He said he is “…dumping old crop daily and it seems to be coming out of (the) woodwork.”

In their weekly service report to the Surface Transportation Board, CP reported it has “Cumulative Open Requests (unconstrained)” car orders of 24,280 in North Dakota and 7,888 in Minnesota and is 10 weeks behind. “Grain hoppers online in the U.S. are at 3,649 and their grain hoppers offline in the U.S. are at 4,513,” CP stated.

“Demand remains stable for Eastern milling markets, and we continue to fill all Pacific Northwest (PNW) demand presented. The demand for movements west through the PNW continues to be weak. Despite the fact that we have nearly 13,000 open PNW requests, actual go-forward demand on the PNW at present is between 600 to 800 cars per week,” CP reported. Here is the link to the full July 14 CP service report to the STB: http://goo.gl/…

A BNSF shuttle loader in eastern North Dakota said he has one more corn shuttle to load and hopes to be cleaned out by mid-August and ready for harvest. A non-shuttle station operator in western North Dakota said he is currently loading cars he had ordered for early June. “There is a lot of old crop left to move and the situation is not looking good. On top of that, secondary freight costs have risen and last week singles went for $2,000 per car to $2,300 per car. This week, secondary freight is trading at $3,000 per car with shuttle offers at $3,500 per car,” he said.

On July 11, the BNSF updated the STB on their service and car placements. According to the July 11 podcast, there were on average, 6,720 cars owed vs. 7,388 the prior week and days late were at 27.1 vs. 26.6 the prior week. North Dakota is still owed the most cars with 4,243 cars owed vs. 4,696 the week prior and has been waiting 29 days vs. 28.5 days the prior week. Montana is owed 1,212 cars, Minnesota is owed 613 cars and South Dakota is owed 229 cars.

John Miller, vice president of BNSF ag products, said, “Despite the impact of localized flooding along the Mississippi River, the overall network performance experienced areas of good improvements.”

Miller said, “For the week ending July 8, overall on-time performance increased 13 percentage points compared to the prior week and is 35 percentage points better than our baseline week in early February. System velocity, which is defined as miles per day (MPD), slowed to 173.5 MPD for the week ending July 8 compared to 177.5 the prior week, but is still nearly 2{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} better that our baseline week in early February when we were at 170.8 MPD.” Here is the link to the BNSF July 11 filing to the STB: http://goo.gl/…


The CN railroad reported an average weekly car-spot (cars placed on tracks at an elevator siding) of 5,544 in June, 2,311 cars per week above the five-year average of 3,233 cars,” said DTN Canadian Grains Analyst Cliff Jamieson. “Canadian Grain Commission data for week 49, or the week ending July 13, indicates 919,000 metric tons of all grains were shipped from the primary elevator system on the Prairies, which is just slightly higher than the 10-week average.”

Jamieson continued, “CP Rail's announcement of a record quarter is being heralded by the media as the company's turnaround continues, with the company's second quarter profits up 48{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} at $371 million. Revenues from grain rose 32{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from the previous year in Canada while achieving a 26{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} increase in the United States. The company reports that oil by rail movement could increase to one train per day by the company's fourth quarter.”


Ingram Marine barge company reported July 17 on their website that, “Upper Mississippi River locks have all reopened. The river is still closed at the Louisiana railroad bridge, forecast to reopen to navigation sometime Thursday, July 17, 2014.”

The Louisiana Railroad Bridge crosses the Mississippi River between Louisiana, Mo., and Pike County, Ill. While rail traffic on the bridge is operating normally, the USDA's Grain Transportation Report said, “Additional work is needed to allow barge traffic to pass through the swing bridge portion. Assuming river levels continue to fall, and the bridge is cleaned and maintained, barge traffic will be able to travel the entire navigable portion of the Mississippi River by July 17 or July 18.”

With the Mississippi and Illinois Rivers now open as waters recede, barge freight rates have begun to rise as terminals unable to move grain the past three weeks are looking for empty barges. USDA reported as of July 15, barge rates for the Twin Cities to New Orleans were $31.45 per ton, 18{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} higher than before the flood began three weeks ago. On the lower Illinois River, barge rates were $18.79 per ton, a 17{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} increase over last week.

USDA's Grain Transportation Report from Thursday stated, “During the week ending July 12, barge grain movements totaled 491,048 tons — 29.2{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} lower than the previous week and 19.6{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} lower than the same period last year. During the week ending July 12, 322 grain barges moved down river, down 22.8{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from last week; 600 grain barges were unloaded in New Orleans, up 4.3{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from the previous week.”


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Posted with DTN Permission by Haylie Shipp


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