Rail Delays Hitting Home for Ethanol, Grain Shippers

Surface Transportation Board will hold hearing on rail issue this week

Published on: Apr 8, 2014

"All of this is due to the turmoil on the rails—dislocated railcars and locomotives, increased terminal dwell times, slower train speeds, an insufficient number of crews, and a shortage of spare railcars and locomotives," Dineen wrote.

The production decreases have amounted to 80,000 barrels per day between December, 2013, and March, 2014, Dineen said. He also dismissed the idea that winter weather is the main driver of rail car shortages.

Related: BNSF Promises To Fix Rail Shipping Delays

"The railroads have attributed this lackluster performance and inefficiency to winter weather. But they seem to have forgotten that winter comes every year!" the letter said. "Indeed, a more plausible explanation for the severity of the current epidemic is the explosive growth in railcar shipments of Bakken and Canadian crude oil."

In his letter, Dineen went on to pose several questions to AAR, including a request for more information on when railways expect to recover from the shortage and if slower train speeds will be a "new normal" in light of increased crude oil shipments. A copy of his entire letter can be read on the Renewable Fuels Association website.

Questions from lawmakers
Sen. John Thune, R-S.D., has posed additional questions to CP and BNSF in a Wednesday statement, underscoring a need to improve railway service as farmers move into planting season.

"While the extended winter throughout the region has made it difficult to keep up with the demand from farmers, ethanol producers, and shippers that rely on freight railroads to do business, it is imperative that both railroads do more to address the backlog of rail cars to ensure that shippers can start moving their products to market as we move into planting season," he said.

In response, the rail companies say they have tried to ease congestion and improve service; BNSF recently hired 1,000 more employees, purchased additional locomotives and train cars, and has spent $350 million on track maintenance.