Business is booming for railroads handling Wisconsin’s shipping needs, but complaints are emerging that include serious safety and reliability issues because of rail congestion and labor issues as well as the frigid conditions of this past winter, a state official said.
Trains have been stopped while crossing important roads used by emergency vehicles and school buses at sites around the state because their crews are required by federal law to stop working after 8- or 12-hour shifts and the railroads don’t have the manpower to replace all of them, state railroad commissioner Jeff Plale said.
A train was stopped across a road for 27 hours near Sheldon in Rusk County recently and forced an ambulance on an emergency call to take a detour, Plale said. He added that his office has also received complaints of trains from various railroads stopped and blocking roads in Caledonia, Oshkosh, Weyauwega, Solon Springs, Chippewa Falls, Auburndale and Marshfield among many others.
“It has become a real issue,” Plale said. “At some point it’s going to become detrimental. If an ambulance can’t get through or a fire truck can’t get through, that’s not a good scenario.”
Plale blamed it on the growing pains suffered by the rail industry that is playing a big role in improving economies nationally and in Wisconsin because it’s cheaper and more efficient than other modes like trucking when it’s working right.
Statistics from the rail industry claim 400 trucks are needed to carry the equivalent amount of grain carried by one train pulling 100 cars. “You can move a ton of freight 400 miles on a gallon of diesel on a train,” Plale said. “You can never meet that margin on a truck.”
Canadian National has invested about $68 million improving or building infrastructure, including rail lines in central and northern Wisconsin, to help it handle the burgeoning frac sand industry that shipped sand in 50,000 rail cars in 2013, according to spokesman Patrick Waldron.
The state is also a crossroad for CN, Canadian Pacific, Union Pacific and BNSF (Burlington Northern and Santa Fe) sending trains from harbors in British Columbia carrying products from Asia to Chicago as well as trains carrying crude oil from North Dakota to refineries in Indiana, Pennsylvania and points south, Plale said.
There also are four regional railroads, including Wisconsin & Southern, which runs on state-owned tracks and has a yard in Madison.
“There are two epicenters of rail activity in this country. North Dakota is one because of all the oil. Wisconsin is the other,” Plale said. “Rail activity is way, way up in Wisconsin. But with that comes some problems.”
For instance, two area companies have seen profit margins for products they ship in or out disappear at times because they never know how long it’s going to take a railroad to deliver cars after they call for them.
“Reliability has always been an issue with the railroads but it’s been the worst recently that it has been in a long time,” said Doug Cropp, the grain manager for Cottage Grove-based Landmark Service Cooperative.
Vita Plus, a Madison-based livestock feed service, buys canola meal that it uses in its animal feed from Canada and ships it by rail to a train yard in Watertown. After the company makes a call to Canadian National or Canadian Pacific for a train, it’s supposed to arrive two weeks later, but they have been arriving as much as a month later and that stretches the company’s resources, said Matt Jorgensen, the assistant general manager of Vita Plus’ Loyal plant in Clark County.
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“When it comes in two weeks one month and it comes in a month the next, that’s when we get in a pickle because cows have to eat every day and we have to make sure they get the feed they need and what our customers expect,” Jorgensen said.
“We have contingency plans and we’ve had to act on those plans a lot lately,” he added. “It has been painful from a business perspective, but we’re not going to let somebody completely run out of product.”
Railroad spokesmen from CP and Wisconsin & Southern blamed any reliability issues this winter on congestion at the Chicago yard, which is the hub of the U.S. rail industry, and the frigid weather that cracked tracks, froze switches and forced increased safety measures such as running trains with fewer cars.
Both problems are affecting the entire country. Prices for ethanol for delivery have risen 40 percent since late January because trains can’t get it out of the Midwest and to the coasts, where it is refined or exported, according to the Wall Street Journal.
“We’re still moving shipments, but this winter has been a challenging one,” said CP spokesman Ed Greenburg.
Making matters worse, the cold temperatures froze the Illinois River, which is usually open most winters for barge traffic carrying grain headed south to New Orleans and fertilizers headed north for farmers in Wisconsin and elsewhere to buy in the spring, Cropp said. There aren’t enough trains to cover for the drop in barge traffic because so many have been diverted to North Dakota and northern Wisconsin, where profit margins are higher for the railroads, he added.
The consequence for farmers and other consumers is a price hike for fertilizers this spring because of the increase in shipping costs companies are paying to get it here in time, Cropp said. “I hear folks in the rail industry saying they are going to get their problems cleaned up in a year. I think it’s going to take a lot longer than that,” he added. “We need more cars, locomotives and rail improvements. We’re trying to jam in too much at one time.”
The demand keeps growing, too. Wisconsin & Southern’s customer base has grown 5 percent in Dane County, according to spokesman Ken Lucht. Most of the inbound shipments are agriculture related or aggregate like gravel for construction problems while grain dominates outbound shipments, he added.
Landmark has increased its use of rail to ship grain by 20 percent over the past five years and is opening a new facility in Fall River that will accommodate 100-car trains to make grain shipping more efficient, Cropp said. Vita Plus wasn’t using rail five years ago and is now paying for 60 to 70 rail cars a month to haul ingredients for its animal feed, Jorgensen said.
“When it works right it’s a great deal for our customers, for us and keeps some truck traffic off the roads, too,” Jorgensen added.
But nobody knows when it’s going to work right consistently. Plale said he’s just hoping the railroads hire enough new employees to move the trains that suddenly stop in Wisconsin cities and don’t move again for hours.
“If you’ve ever wanted to work for a railroad,” he added, “now is the time.”