The nation’s top agriculture official is raising alarms about the looming shortage of rail cars to carry grain from Midwestern fields to market.
U.S. Ag Secretary Tom Vilsack says railroad officials should have anticipated the coming bumper harvest and been ready with sufficient cars for delivery.
Vilsack says, “The reality is that we’re behind, the rail industry is behind, and they need to catch up.”
Two of the biggest railroads claim they’re investing in more staff and equipment, but Vilsack says, the moves aren’t coming quickly enough as farmers are already beginning to harvest crops.
“The National Surface Transportation Board has received comments from USDA in a letter that was recently sent on behalf of farmers encouraging them to continue putting pressure on the Burlington Northern and Canadian Pacific rail lines to ensure they have adequate number of cars, adequate number of locomotives, more personnel and continue to improve track.”
Vilsack says railroads should be penalized for poor service and they shouldn’t be allowed to increase their freight rates when there’s a backlog and bumper crops.
“There may be some opportunities for the National Surface Transportation Board to change their system so that rail companies are not rewarded for substandard service,” Vilsack says. “It doesn’t seem to me that they ought to be able to charge extra when there’s a backlog and a large harvest. They ought to be anticipating that.”
Vilsack says another possible solution includes the use of arbitration.
Vilsack says, “We’ve also suggested that there might be additional ways in which decisions concerning whether or not they’ve stepped up adequately can be put into a mediation or arbitration system that might be less time-consuming and less expensive for producers.”
Legislation is being introduced in the U.S. Senate to address the problem, while lawmakers from South Dakota and Minnesota are calling on the USDA to conduct an economic analysis of rail service challenges facing agricultural shippers.
Crude oil production is bounding in the U-S. Five years ago, rail cars hauled 11,000 loads of crude oil, while last year, it was 400,000 rail car loads of crude.
Supporters of the stalled Keystone XL oil pipeline say if the project were greenlighted, it could be carrying huge quantities of crude, freeing up more trains to haul grain.