BISMARCK, N.D. – Farm commodity rail shipments are running nearly three weeks behind in North Dakota, but BNSF Railway Co. has promised to get caught up before summer, the state’s U.S. senators said Wednesday.
Republican Sen. John Hoeven and Sen. Heidi Heitkamp, a Democrat, said they met with BNSF CEO Carl Ice on Tuesday to express concerns about delays in agricultural shipments and overall rail safety. The state’s congressional delegation, including GOP Rep. Kevin Cramer, have for months pushed the railroad to improve its service in North Dakota, where shipping delays have caused big backlogs and added costs for agriculture shippers, including grain elevators and sugar co-operatives.
Increased crude oil and freight shipments largely have been blamed for causing the rail delays. But BNSF has said rail service has been hurt by bad winter weather.
Heitkamp believes there is competition between oil tankers and railcars hauling agriculture products, which is contributing to shipping delays for the latter.
“I think somebody would have to prove to me that’s not correct,” she said.
Whatever the cause of BNSF’s shipping delays, Hoeven said, “they have got to keep up with ag and there is no question they need to increase capacity. That’s the point we’re making very forcefully.”
“We recognize the severe impact that our reduced network velocity is having on our customers and their business,” Ice said in a statement released through Hoeven’s office. “BNSF is committed to restoring service levels in North Dakota as quickly as possible.”
BNSF is based in Fort Worth, Texas, and is part of Warren Buffett’s Berkshire Hathaway Inc., based in Omaha, Neb. The railroad, which was purchased by Berkshire in 2010, is the biggest player in the rich oil fields of North Dakota and Montana, hauling the bulk of the crude out of the region and the inbound freight that supports oil drilling.
North Dakota’s oil production is nearing 1 million barrels of oil daily and about 75 per cent of it is being shipped by rail. Railed oil shipments in North Dakota began in 2008 due to lack of pipelines to move it to market.
BNSF last month promised to add more locomotives and crews in an effort to address agriculture shipping delays in North Dakota. BNSF also has said it plans to invest $5 billion in its railroad this year, including $900 million to expand capacity in North Dakota and other locations where crude oil shipments are surging.
The 40,000-member North Dakota Farmers Union has said the lack of railcars in the state has delayed shipping of agricultural products by as much as 40 days in recent months.
North Dakota’s senators said BNSF indicated commodity shipments are running 19 days behind in North Dakota, which mirrors the railroad’s backlog of shipments nationwide.
“For our agricultural business, we have been working hard to work down our past dues in North Dakota and believe we will continue to make progress through spring and will see a return to more typical service by June, barring additional weather issues,” the railroad said in a statement.
Heitkamp said even with the railroad’s pledge to cut its backlog by late spring, “the schedule is not going to satisfy” everyone. She said delays continue to cause big increases in shipping costs for farm products and some in the agriculture industry will continue to be forced to hire trucks to meet customer obligations.