Grain backlog one source of delays to Twin Ports shipping

By KBJR News 1

June 25, 2014 Updated Jun 25, 2014 at 8:13 PM CDT

Duluth, MN (NNCNOW.com) -- Grain accounts for about five percent of the annual tonnage shipped out of the Twin Ports; but recent backlogs in the rail industry, specifically of grain, are holding up the rest of the shipping process and could be putting the Twin Ports at a disadvantage.

"Shippers can elect to take the grain from elsewhere. We just had a ship that was possibly coming to Duluth, but now it's going to Thunder Bay because of possible delays," said Stephen Sydow, Operations Manager at Daniel's Shipping.

"These are things that are part of the ramifications of having these delays, the ships can just go elsewhere and then our whole port is out," said Sydow.

The most recent example was the Federal Mattawa. She sat just outside the Duluth Port for nearly three weeks, in part because she was waiting to load grain, grain that wasn't there yet.

"The ship could have gone in, loaded, and went back to Europe and discharged and then have been back in the same amount of time that it sat here waiting," said Sydow.

One thing holding that grain up is oil, which is flowing at a steady pace from the Bakken Oil fields in North Dakota. U.S. Senator Al Franken says grain should also be a priority for rail companies.

"I've been hearing from grain elevators who have, um, you know grain from last year's crop that they haven't gotten trains to come and pick up," said Sen. Franken.

Sen. Franken has sent written testimony to the Surface Transportation Board which regulates the railroads requesting action. Now, rail companies like BNSF and Canadian Pacific have to report how they plan to get grain moving and provide updates on the status of the backlog.

"This isn't just a one time thing on the grain, and it is incredibly important to our farmers in Minnesota," said the Senator.

BNSF Railway released a statement saying; "We have steadily moved increasing volumes of grain and grain product over the last several months and are moving more year–to–date in 2014 than the same period in 2013. We have exceeded last year’s totals in ethanol, for example, by 9% in latest year-to-date totals. BNSF has reduced agricultural past dues by one-third -- approximately 5,000 cars -- since May 20."

Similarly, Canadian Pacific released the following statement:

"CP continues to closely look through the STB order as it reviews its grain plan and will be responding directly to the agency. This is a complex issue and we are working closely with our customers to address their shipping requirements as quickly as possible. CP is actively taking steps to address ongoing congestion issues in the Midwest and improve the velocity of our trains and effective utilization of our railcar fleet. CP remains focused on working with our customers across our U.S. network, which is an ongoing day-to-day process."

Both of the railway companies will report to the Surface Transportation Board by June 27 on how they plan to reduce the grain backlog.

Posted to the web by Kati Anderson.