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STB holds hearing in Fargo to discuss rail shortage

A backlog in rail shipments in North Dakota has prompted the Federal Surface Transportation Board to host a hearing in Fargo.

Federal, state and local officials provided testimony to the STB to convey just how extensive the rail shortage has become.  Governor Jack Dalrymple says the North Dakota Mill and Elevator has been forced to shut down 25 times due to the backlog of rail orders - which only seems to get longer.

"BNSF has reported a total of 1,016 past due rail cars in North Dakota, averaging about ten days late.  There is great apprehension about how things will go this fall because it appears the last four months has been an extraordinary effort.  The Canadian Pacific reports a total of 7,535 open requests in North Dakota, averaging about thirteen weeks."

Dalrymple says BNSF has made great strides in its efforts to address the shortage, but Canadian Pacific Railway has yet to show improvement.  John Brooks is Vice President of Marketing and Sales with CP, and says a "perfect storm" of adverse weather, interchange congestion in Chicago and the Twin Cities, rail costs, and the sheer volume of product needing to be shipped among are just a few factors contributing to the extensive backlog.  He says CP is working to improve its communication with its customers, change its car request system and hire more employees.  He says the rumor that oil shipments receive priority over ag commodities is untrue.

"This is a growing business area, and we expect to continue to haul more of these products.  But I can assure you that CP is not favoring the shipment of one commodity over another.  We are committed to work with all of our customers, to try and move these in an efficient manner from our Upper Plains network."

North Dakota Agriculture Commissioner Doug Goehring says if the issues are not resolved soon, it could spell disaster for farmers.  He says when 82 percent of crops leave the state by rail, it is unacceptable that producers still holding onto their 2013 crop as the 2014 harvest begins are told to expand their storage capacity.  He says it is a great possibility that farmers could lose huge export customers if ag shipments are not given proper priority.

"Soybean shipments have a very small window to meet market demand in Asia and Southeast Asia. These products must be shipped between October and February, demonstrating the need for certainty in our rail service because, we can't store our way to prosperity. Planted acres in North Dakota for corn, soybeans and wheat are record breaking or near record breaking this year.  This should be good news.  Instead, it is increasing producer anxiety, because these products can become trapped in the system on farms or in elevators and not being moved."

The STB also heard testimony from officials in South Dakota and Minnesota, as well as various commodity and agriculture groups.

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