Rail customers decry poor service

They say crude oil displacing shipment of commodities

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WASHINGTON — Grain producers, manufacturers and coal shippers told federal regulators Thursday that rail service has deteriorated drastically in the nation's midsection in recent months, leaving crops in piles on the ground and fuel stocks low at electric power plants as resources go undelivered.

Railroad representatives told the federal Surface Transportation Board that a brutal winter, combined with a record grain harvest, was to blame for the delays, but the industry's critics charge that their shipments are taking a back seat to crude oil.

Railroads moved virtually no crude oil just a few years ago, but a surge in production in North Dakota's Bakken shale region has strained rail capacity in the Midwest.

It's putting the squeeze on farmers who rely on rail to turn their crops into cash and delaying passengers on Amtrak's Empire Builder between Chicago and the Pacific Northwest, several witnesses testified.

"The extreme delays to Amtrak and other users of the network are a symptom of a fragile network that is strained and struggling to react," Federal Railroad Administrator Joseph Szabo told the board, which mediates disputes between railroads and their customers.

Bob Wisness, the president of the North Dakota Grain Growers Association, said the rail snarls had put his state's farmers in jeopardy. Millions of bushels of wheat, barley and corn are "unmarketable" because of rail deliveries that are weeks and months late.

"We have had big crops before," he testified, "but we have never had service this poor from the railroads."

Despite reassurances from BNSF, the railroad that supplies the coal from Wyoming's Powder River Basin, Kahn said, some Texas plants only have a 10-day supply and could run out by the summer, when electricity demand reaches its peak in the state.

"They keep saying, 'Don't worry, you're not going to run out of coal,'?" he testified. "We don't see it getting any better."

"I make more money hauling grain than I do hauling crude," said Keith Creel, the president and operating chief at Canadian Pacific Railway.

BNSF in cross hairs

Much of the shippers' ire was directed at BNSF. The railroad, based in Fort Worth, Texas, has become the nation's largest hauler of crude oil in trains, mostly from North Dakota.

BNSF said that it alone had absorbed half the growth in U.S. rail volumes last year. Traffic spiked late last year amid a record grain harvest, the railroad said, and the onset of one of the worst winters in memory.

The railroad said it was hiring thousands of new workers, ordering new locomotives and expanding track capacity.

"We're not 100 percent there yet, and it's something we continue to work on week by week," testified Stevan Bobb, the executive vice president and marketing chief for BNSF.