ST. PAUL - A soybean farmers from southwestern Minnesota and an official of a taconite mine in the northeast, and more than a dozen others, came to the same conclusion: Significant railroad delays throughout the Upper Midwest are hurting nearly everyone.
Bill Gordon, who farms near Worthington, told a joint Tuesday meeting of five Minnesota legislative committees that the state should consider allowing heavier trucks on Minnesota roads and shippers should make more use of the Duluth harbor to ease a crush on railroads.
U.S. Steel official Larry Sutherland said hundreds of thousands of tons of taconite, used to make steel, are sitting on the ground on the Iron Range because of delays in trains needed to pick it up.
Power plant operators testified that coal was not being delivered quickly enough, farmers said they are struggling to get crops to markets, an Amtrak official said freight traffic is delaying his trains by hours and propane suppliers said that while things look better than a year ago, they still worry about getting heating fuel to Minnesotans when cold weather arrives.
More than 40 state legislators attended the meeting to hear about the impact of railroad congestion.
“Welcome to America,” state Agriculture Commissioner Dave Frederickson said. “It’s a supply-and-demand situation.”
The committees took no action, but bills are expected to be considered to relieve the rail delay problem when the Legislature convenes on Jan. 6.
Tuesday’s meeting, which lasted four and a half hours, brought testifiers from across the state and beyond who told of growing problems with widespread impacts. Railroad officials said they are working on the issue, while at the same time admitting the situation has been ugly.
“We recognize that we need to do more and we need to do it better,” said Brian Sweeney of BNSF Railway Co.
While Minnesota legislators repeatedly have blamed BNSF’s delays on the railroad placing priority on transporting western North Dakota oil across Minnesota, Sweeney strongly denied that.
“There is a perception out there that we are prioritizing oil,” Sweeney said. “That is not at all true. ... Everyone’s service has suffered.”
Sweeney said that oil companies are not happy with BNSF because their shipments are being delayed, like those of other shippers.
The railroad official said that all types of shipping are up.
BNSF is adding 350 employees in Minnesota and buying locomotives this year. In the next three years, he said, the railroad is undertaking billions of dollars’ worth of projects including adding a second track in much of the state.
However, he said that just as helpful is adding track in places like North Dakota, where the country’s largest oil boom is demanding more railcars.
“All of the solutions are several years out,” Dave Christianson of the Minnesota Department of Transportation said
While Republicans say pipelines are the answer to rail issues, Christianson said they take time to build and even if all the proposed pipelines would be built, the same number of oil trains would travel through Minnesota as North Dakota’s Oil Patch is not expected to reach peak production for a decade.
Christianson said coal-fired power plants may be affected the most by delays.
Power plant operators told legislators that options other than coal are expensive and limited, and consumers would pay the cost.
Amtrak official Derrick James blamed delays on BNSF and Canadian Pacific in Minnesota, which tracks the passenger trains use.
The Empire Builder, which goes through Minnesota and North Dakota as it travels between Chicago and the northwest, has been seriously affected by heavy freight traffic, he said.
“The state of affairs is unsustainable,” he said, adding that hours-long delays mean fewer are using Amtrak and the rail organization is losing money. “The capacity of the (rail) network is not out there to provide the needed capacity.”
Before Tuesday’s meeting, delays farmers experience were the prime talking point. But bad news for farmers could be good news for railroads.
Lower prices farmers are getting for crops this year, he said, probably means more crops will be stored on farms and in elevators until prices rise again. That could ease agriculture demand for trains for the time being.
Also cutting the demand could be sky-high costs of leasing rail cars. Rep. Patti Fritz, D-Faribault, said her farmers say rail cars that used to go for $750 have soared to $4,000 in recent months. Others said cars can go for up to $6,000.
Grain elevators have suffered, Bob Zelenka of the Minnesota Grain and Feed Association said. “We have elevators that have lost hundreds of thousands of dollars.”
Gordon said that farmers need quick shipping to get their products to international markets on time. He said that shipping on the Great Lakes through Duluth would be one solution.
He also suggested that the state allow heavier trucks on the roads, as do many nearby states. However, House Transportation Finance Chairman Frank Hornstein, D-Minneapolis, said that heavier trucks would lead to more road and bridge damage.
Sutherland said one of U.S. Steel’s two taconite plants is in good shape because its product needs just a short lift to Two Harbors or Duluth. But the other plant ships taconite to Illinois and Alabama, which are delayed by congestion.
With 250,000 tons on the ground at the one plant alone, the situation “is a great concern,” he said.
And it is not just shipping the taconite. His plants use more electricity than the entire city of Duluth, so coal Minnesota Power needs to generate electricity must be delivered on time.
Sutherland said railroad delays have cost his company millions of dollars. Al Rudeck of Minnesota Power said his company’s customers, mostly large firms, have paid $16 million more because of slow rail service.
