Union Pacific and other main freight railroads are now required to join BNSF Railway in filing detailed weekly reports on shipping delays, as federal regulators attempt to cope with complaints from farmers and coal-burning utility plants who say crude oil gets top priority.
The Surface Transportation Board said in a ruling this week that all seven Class 1 railroads with U.S. operations are required to submit weekly information on average train speeds and the amount of time trains spend waiting in terminals, along with a description of operating conditions in Chicago. That city, one of the nation’s busiest rail interchanges, is often cited as a choke point.
This year, Berkshire Hathaway-owned BNSF and Canadian Pacific Railway were required to submit such reports after delays mounted in their northern operating areas from weather-related backups and demand from shippers of Bakken crude oil produced in North Dakota.
Now Omaha-based Union Pacific and the other major freight carriers are being subjected to the same scrutiny. The Surface Transportation Board about a month ago held hearings in Fargo, North Dakota, where farmers and utility companies lambasted rail service.
“Shippers expressed concerns about the lack of publicly available rail service metrics and requested access to certain performance data,” the Surface Transportation Board said in a decision released Wednesday. “There is a need for broader standardized performance data from the railroad industry.”
BNSF, with about 5,000 Nebraska employees, and Union Pacific, with about 8,000, referred questions about the Surface Transportation Board to their trade group, the Association of American Railroads.
“It is unclear how the increased reporting requirements in today’s order will in any way lead to improved service,” the association said in a statement. “Railroads are investing and hiring at an accelerated pace to provide the capacity needed to meet growing demand as traffic continues to rebound to pre-recession levels.”
The most recent filings on shipping delays by BNSF and Canadian Pacific show performance is worsening. BNSF said in the Oct. 3 report that past-due rail cars expected by grain shippers rose 41 percent, to 4,119 cars. More than half were in North Dakota, with 76 late cars in Nebraska and one in Iowa. Canadian Pacific reported 2,589 late cars, with the majority in North Dakota.
The first reports from the new filers are due Oct. 22, the Surface Transportation Board said.
The pressure is on the railroads right now as record corn and soybean crops are being harvested, said Joseph Schwieterman, a transportation professor at Chicago’s DePaul University.
“This is the situation we have been warned about, with rail traffic growing faster than expected,” he said. “Now, you also get a double whammy, with crude oil and intermodal shipments both up all at once.”
Intermodal traffic, or the shipment of goods in one container via truck and train, rose about 5 percent last year, while crude shipments have skyrocketed. New oil production technologies such as hydraulic pressure, chemical injection and horizontal drilling have led to a boom in North Dakota oil production, which now tops 1 million barrels a day. BNSF, the leader in crude-by-rail, now runs about eight 100-car oil trains a day, up from less than one a day in 2010.
Railroads have said repeatedly that no commodity is given shipping preference over others.
The very nature of the railroad business accounts for some of the snags, Schwieterman said.
“There is some double-tracking construction going on, but the days of new rail routes through virgin territory are long gone,” he said.
Rail delays began mounting early last year, after record snowfalls and low temperatures, including in main interchanges Chicago and Minneapolis. Spring floods limited mitigation efforts, which have in turn been followed by record grain harvests.
Jason Kuehn, a transportation analyst for New York consultant Oliver Wyman, said shippers — from automakers to coal-burning electric utilities — are screaming for railcars to move their goods.
“The reality is that the economy is expanding and the railroads can’t handle it,” said Kuehn, whose firm includes all major railroads as clients. “The railroads shipped 5.7 percent more ton-miles in the second quarter than they did in the first, and demand continues to rise.”
The Omaha World-Herald Co. is owned by Berkshire Hathaway Inc.
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