Photo courtesy of BNSF Railway.
|John Miller, BNSF Railway Co. group vice-president of agricultural products.|
“We are pressing every resource at getting better,” Miller said. “It’s ongoing, but there are signs of improvement daily. It probably will take customers a couple of weeks to feel that (improvement). Now it’s a matter of catching up.”
Those directly affected by the rail outages across the Northern Corridor may feel like it’s the winter of 2013-14, but the situations are much different. In 2013-14 there was a prolonged period of wintery weather (cold and snow) across a broad area but mainly the Upper Midwest, and rail capacity was taxed by strong demand from all sectors. The current situation is the result of a series of specific events, including ice storms, avalanches, heavy snows and floods, Miller noted.
“All these things are severe,” Miller said, adding that BNSF’s recovery ability also is improved from 2013-14.
While there was no specific date as to when shipments will be “caught up,” shippers should expect to see much improvement over the next several weeks, Miller said, although he noted that “winter is not over yet.”
The BNSF reported an average of 139.6 trains held system wide in the week ended Feb. 16, up 1% from a week earlier and up 282% from the same week last year. It had an average of 1,452 trains on the system for the week, up about 2% from the prior week. Locomotive velocity was about 284 miles per day, up 3% from a week earlier but down 5% from a year ago. Car velocity was 204 miles per day, up 3% for the week but down 10% from a year ago. Overall train velocity was 17.5 miles per hour, up about 1% for the week but down about 20% for the year. Total volume in the week ended Feb. 11 was 193,061 units, down 5% from the prior week. Terminal dwell time was 28.1 hours, down more than 5% from a week earlier but up 10% from a year ago.
Trade sources noted that secondary rail freight costs soared as a result of the problems across the Northern Corridor. The average rate in the secondary market for spot BNSF shuttle rail cars was around $2,000 above tariff per car in early February, up from $1,267 above tariff a month earlier and compared with $108 below tariff a year ago, according to U.S. Department of Agriculture data. Some private sources reported cars as high as $3,000 above tariff. There also were reports that some vessels were moved to other ports as the rail delays drug out two to three weeks in some cases.
BNSF did not raise its freight rates as the result of the weather issues and does not profit from the higher rates for rail cars sold on the secondary market, which is traded between shippers.
The weather disruptions came at a time of strong rail shipments, including spring wheat, corn and record high soybeans.
“Demand has been good to very good,” Miller said.
As of early last week, there appeared to be more problems along the West coast, from California to Washington, than along the Northern Corridor, mainly due to new storms that brought heavy rains to parts of California and heavy snowfall in the mountains. Freight movement up and down the coast is significant, and the Union Pacific Railroad, a major player in that region, also noted track outages. In a service announcement, Union Pacific noted 24 to 48 hour delays on some lines as it worked through a backlog of trains.
The Oroville Dam in northern California, which has seen multiple spillway failures recently, continues to be a major concern for both BNSF and Union Pacific.“It’s a big deal,” Miller said of the Oroville Dam situation.