Canadian Pacific rail cars lined up last week to receive grain at the Farmers Union elevator in Wilton, N.D. Jerry Hagstrom

Some farmers are facing a crisis this harvest season because trains aren't keeping up with transport demand.

FARGO, N.D.—Deregulation has been a popular theme in U.S. politics for decades, but a Surface Transportation Board hearing here last week on railcar shortages and service delays provided an example of how dependent rural America still is on a federal regulatory agency to push the railroads to provide vital services.

The BNSF Railway Company and the Canadian Pacific Railway Company move commodities from the northern tier of states stretching from Minnesota through the Dakotas and Montana to the ports in Washington state and to processing facilities elsewhere. But if the carriers do not provide cars to ship wheat, corn, soybeans, and other commodities this fall, farmers and agribusiness risk losing billions of dollars and the U.S. reputation as a reliable supplier of agricultural products will be tarnished, a wide range of witnesses testified at Thursday's hearing.

Citing a study showing that North Dakotans have already lost almost $67 million due to rail delays and could lose another $95.4 million, North Dakota Republican Gov. Jack Dalrymple told the board the situation "is about the individual elevators and farmers out there who have no place to go—they have no power, no influence over the situation except for you."

The problems began last winter when BNSF (formerly the Burlington Northern Santa Fe) and Canadian Pacific fell way behind schedule in providing railcars to ship the 2013 crop and there were fears that the rails would not provide fertilizer before spring planting. The railroad executives have blamed last winter's severe weather and congestion at rail yards in Minneapolis-St. Paul and Chicago, but the farm leaders say the railroads are favoring the growing energy industry in the Bakken area of western North Dakota or at least have made more promises of service than they can deliver.

On April 15, the STB ordered the two railroads to report within three days their plans to ensure the delivery of fertilizer and to provide weekly status reports on those deliveries. On June 20, amid continuing complaints about negative effects from backlogged grain-car orders and delayed shipments of loaded grain cars, the STB gave the railroads one week to submit plans to resolve their service problems and ordered them to provide weekly reports on the outstanding grain-car orders and the average number of days late for all outstanding orders until each carrier resolves its backlog.

The reports showed that the fertilizer did arrive when it was needed and that there has been some progress in reducing the backlogs of grain-car orders, but with analysts predicting a huge crop this year, the STB decided to hold the field hearing. The board required rail executives to testify and to stay through the day to listen to the agriculture industry and public officials explain the economic impact of elevators running out of storage capacity, risks of stored grain spoiling, and penalties incurred by farmers and other shippers for products that are not delivered on time.

The STB's actions occurred amid considerable pressure from Sens. Heidi Heitkamp, D-N.D., John Hoeven, R-N.D., and John Thune, R-S.D., and Rep. Kevin Cramer, R-N.D., who have been impressing on the railroad officials the gravity of the situation. The role has been an odd one for the legislators because they have not proposed legislation. Heitkamp explained in an interview on the sidelines of the hearing that "legislation wouldn't happen fast enough" and that the only place to which the ag community could turn is the STB, the agency that was established in 1995 when the old Interstate Commerce Commission was terminated. The ICC's heavy regulatory hand didn't work but there is still a role for government to help "captive shippers"—people and companies with few or no transportation alternatives—when they have complaints, Heitkamp said.

STB Chairman Daniel Elliott, a former transportation union lawyer appointed by President Obama, had obviously gotten the message.

"Ag in the Upper Plains is in dire straits," Elliott said in an opening statement.

He and the other commissioners—Deb Miller, a Democrat and former Kansas transportation secretary, and Ann Begeman, a former Republican congressional aide who noted she came from a farm background in South Dakota—proved to be aggressive questioners, especially of Canadian Pacific, which lawmakers and the STB have previously criticized for being particularly lax in making plans to improve service.

At the end of the nine-hour hearing, BNSF and Canadian Pacific officials promised to provide more cars and speedier service, but it was unclear whether the STB would take any further action. Elliott noted that the STB has broad powers to act in the case of emergency, but said he does not want to take actions that could make the situation worse. He said in a brief interview that the STB will continue to require the reports on commodity rail shipments and the backlog "until we get significant improvement."

Heitkamp, a lawyer and former North Dakota attorney general, said she has been discussing Elliott's powers with him and that she believes that "some things can be tweaked" at the STB to force the railroads to improve.

The harvest months should determine whether the combination of congressional pressure and regulatory action can indeed force the railroads to move the commodities to ports and processing—or whether the hearing was only an opportunity for the farmers and others to get their complaints off their chests.

This post originally appeared on National Journal, an Atlantic partner site. 


Is Sweet Green the Ultimate Millennial Brand?

What It's Like to Be a Black Cop in St. Louis County

On Immigration, Obama in a Box of His Own Making



About the Author

Most Popular

  1. Coronavirus

    The Post-Pandemic Urban Future Is Already Here

    The coronavirus crisis stands to dramatically reshape cities around the world. But the biggest revolutions in urban space may have begun before the pandemic.

  2. A pedestrian wearing a protective face mask walks past a boarded up building in San Francisco, California, U.S., on Tuesday, March 24, 2020. Governors from coast to coast Friday told Americans not to leave home except for dire circumstances and ordered nonessential business to shut their doors.

    The Geography of Coronavirus

    What do we know so far about the types of places that are more susceptible to the spread of Covid-19? In the U.S., density is just the beginning of the story.

  3. Traffic-free Times Square in New York City

    Mapping How Cities Are Reclaiming Street Space

    To help get essential workers around, cities are revising traffic patterns, suspending public transit fares, and making more room for bikes and pedestrians.

  4. Perspective

    Coronavirus Reveals Transit’s True Mission

    Now more than ever, public transportation is not just about ridership. Buses, trains, and subways make urban civilization possible.

  5. photo: A lone tourist in Barcelona, one of several global cities that have seen a massive crash in Airbnb bookings.

    Can Airbnb Survive Coronavirus?

    The short-term rental market is reeling from the coronavirus-driven tourism collapse. Can the industry’s dominant player stage a comeback after lockdowns lift?