Railway backlogs helping to shift traffic to Canada from US

3 Nov 2014
Calgary Herald
PETER ROBISON AND THOMAS BLACK
BLOOMBERG
U. S. harbours try to reverse loss
Railway backlogs helping to shift traffic to Canada
SEATTLE — Seattle and Tacoma are being stymied in their push to regain market share from Canada as rail cars destined for the harbours sit idle on tracks across the U. S. Pacific Northwest.
Even as the ports, on Washington’s Puget Sound, agreed to consolidate some operations after a century of competition, 40- fold growth in shipments of crude from the Bakken oilfields is straining the region’s main railroad company, BNSF Railway, causing delays that have helped shift traffic to less congested harbours in Canada. In September, as many as 150 grain cars piled up in nearby rail yards, said Dale Frazier, manager of Seattle Bulk Shipping.
“We were turning away business,” Frazier said. His company transfers grains, peas and lentils from hopper rail cars into containers for export. His customers racked up $ 170,000 in extra storage bills in September, up from $ 30,000 in July, he said.
The jams, part of nationwide bottlenecks that have led to complaints from farmers and scrutiny from federal regulators, are complicating the ports’ efforts to reverse losses in market share to Canadian harbours that have developed more modern infrastructure for rail shipments.
In the U. S., shippers of grain, coal and other commodities have told regulators of poor service from BNSF, owned by Warren Buffett’s Berkshire Hathaway. The U. S. Surface Transportation Board in June ordered railroads to report plans for resolving the backlogs.
Customers “are experiencing gradual improvements” and “have our continued commitment that we will add the resources necessary to handle all of our customers’ business,” A BNSF spokeswoman, Courtney Wallace, said. This year, BNSF plans a record $ 5 billion in capital spending, about $ 1 billion of it to improve and expand lines between the Northwest and Chicago, she said. Projects include adding two new staging tracks near Everett, Wash., and improving a rail yard in south Seattle, Wallace said.
BNSF’s investments may ease the bottlenecks for the ports, said Tony Hatch, a New York- based transportation analyst at ABH Consulting.
“As much as they’re griping about it, everybody assumes that by next spring they’ll be back to normal,” he said. While containerized cargo volumes moving through North American West Coast ports have almost doubled since 2000, the Puget Sound’s market share has dropped to nine per cent from 15 per cent, according to the Port of Tacoma.
Seattle and Tacoma said they will combine planning, operations and marketing of their cargo terminals. Together, they would have trailed only ports in Los Angeles, Houston, Newark and Long Beach last year, with $ 77 billion in total vessel trade. The aim is to halt a loss of port calls by international shippers that’s especially damaged the Port of Seattle, causing a 26 per cent drop in container volume from 2010 to 2013.
By combining, the two say they can stop undercutting each other on rates, spread capital investments between them and reduce costs.
“There is a short list of components of what the focus is: And it is infrastructure, and it is growing the cargo volume through here, which includes a lot of the marketing and customer relationships,” said Linda Styrk, seaport managing director of the Port of Seattle.
Asian- made goods increasingly are bypassing the Puget Sound for Canada’s Prince Rupert, 36 hours’ sail closer to Shanghai. It has a wharf deep enough for some of the biggest vessels and a cargo terminal that can whisk containers directly to rail lines for the U. S. Midwest. The British Columbia town of 15,000 people in 2007 opened the Fairview Terminal, the first dedicated ship- to- rail container terminal in North America. Prince Rupert’s volume jumped 14 per cent in the year through September, to 457,131 standard containers, or 20- foot equivalent units. Volume in Seattle and Tacoma was almost unchanged at 2.6 million in the same period, the ports say.
Port Metro Vancouver, which consolidated the operations of three regional ports in 2008, saw volume increase 4.7 per cent to almost 2.2 million TEUs in the year through September.
“Fundamentally, we’ve got some good advantages, but it takes the collaboration between all the modes of shipping — the carriers, the terminal operators and the railway to make it all work,” Shaun Stevenson, the Prince Rupert Port Authority’s vice- president of trade development and public affairs, said.

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on November 3, 2014, in miscellaneous. Bookmark the permalink. Leave a comment.

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