ND Port Services In Training

When Greg Johnson started North Dakota Port Services in 2007 with the goal of making regional rail transportation more efficient, oil and gas operations in the Bakken weren't part of the business plan.
By Patrick C. Miller | January 16, 2015

When Greg Johnson started North Dakota Port Services in 2007 with the goal of making regional rail transportation more efficient, oil and gas operations in the Bakken weren’t part of the business model.

“We started it as an intermodal facility to service our value-added agriculture customers across the region,” says Johnson, CEO of one of two privately owned rail ports in the U.S. “The explosion of development in the Bakken wasn’t really in anybody’s vision.”

But that began to change in 2008 when the Bakken began to boom.

Located next to the BNSF Gavin Yard at Minot, NDPS is a transloading, intermodal and warehousing facility serving a 250-mile area around Minot—including eastern Montana, northern South Dakota, northwestern Minnesota, southern Manitoba, and southeastern Saskatchewan. NDPS can handle a full intermodal unit train along with approximately 80 manifest rail cars.

“When the Bakken began drawing attention, we started being asked if we could service different areas, mainly from transloading services for operators trying to get product in and then eventually the crude oil and LNG going back out,” Johnson recalls.

NDPS serves as a regional distribution hub for the upper Midwest and lower Canadian provinces. Examples of import products shipped to the oil and gas industry include heavy equipment, building supplies, pipe, proppants, diesel fuel, gasoline, crane mats and other well completion materials.

As originally planned, truck containers with products from Asia being shipped by rail to markets in the eastern U.S. would be loaded with agricultural products at NDPS rather than being sent back empty overseas.

“We discovered that a lot of that inbound freight to the Bakken was coming from Asia across the water via container,” Johnson explains. “We made a proposal to our ocean carriers and the operators to utilize that container box by getting it off the train, off-loaded, inspected, cleaned up, reloaded with our ag products and sent back.”

Importing loaded containers and sending them back full is a two-way, freight-paying move that’s “about as efficient as you can get in a rail industry and trucking industry or in the freight industry,” Johnson says. “You really utilize that movement on the rail to its fullest when you do that.”

Located on a 120-acre site, NDPS is serviced by BNSF's Northern Tier Intermodal Line, adjacent to the railroad’s main-line switchyard with daily service and four-lane highway access. The BNSF route traverses northern Montana and comes through Williston and Minot where it splits to go south to Fargo or east to Grand Forks. From Grand Forks, trains can travel south to Fargo or north to Winnipeg.

Johnson believes the NDPS facility’s proximity to the Bakken and its strategic location in relation to other major rail shipping hubs in Seattle, Minneapolis, Chicago and Omaha make it ideally suited to serve the increased demand for products coming into and leaving the region.

“It’s actually their most convenient route for the Chicago market,” Johnson says of the northern tier route. “Minot is halfway between Chicago and Seattle, roughly at that thousand-mile intersection. Minot has fueling, crew change, train inspection and car repair. It’s a natural stopping point for all trains.”

The process of inbound trains being split up to service different parts of the region and then being reassembled outbound to carry various loads is slow, inefficient and needs to change, Johnson says. He envisions NDPS as the point where trains can be pulled off the tracks, unloaded, serviced and reassembled to transport agricultural and energy products in a timely manner.

“Reliable and timely service into this marketplace is very critical to the success of all shipping communities,” he says. “You don’t survive if you can’t ship timely and deliver to your customers.”

To illustrate the point, Johnson compares the Bakken’s distribution network to a spider web.

“Why would you build a big distribution hub in the middle of a spider web?” he asks. “It’s easier to distribute into the spider web than it is to bring everything in, try to distribute it and then get it back out.”

For the railroad, not having to service so many different stops along the main line would greatly improve service, according to Johnson.

“The main line has to have trains roaring at 50 miles per hour,” he says. “When that train is slowing down and stopping and having to change cars, it affects every train on that chain all the way back to the West Coast or Chicago. You can’t keep trains moving when there’s one in the way.”

Last October, BNSF asked NDPS to host a meeting of ocean carriers and shippers to assess the opportunity to improve intermodal shipping in the region. Currently, the nearest intermodal transportation facilities are in Seattle and Minneapolis.

Although they had just two weeks to organize the event, Johnson said the meeting was well-attended by regional shippers. Three international carriers also attended and three others continue to express strong interest.

However, Johnson says nothing has been heard from BNSF since then.
“All we need BNSF to do is provide a rate,” says Johnson. “They need to provide a rate that makes economic sense to the shipping community because everybody has to be profitable for it to work. Provide that rate to the shipping community and bring the trains in. That’s all we ask.”

NDPS currently occupies a 120-acre site, but has plans to expand by up to 3,000 acres to become the intermodal shipping hub that Johnson says is needed. But until BNSF makes a decision, NDPS’ expansion plans remain in limbo.

“There’s a lot of parcels here available for small, large, medium shippers to locate facilities,” Johnson says. “We would service their spur for the offload, whether it’s a fertilizer car to unload, an ag hopper to get loaded or a crude oil car to get loaded or a diesel car to get emptied.”

If Johnson’s plan comes to fruition, NDPS will become a distribution center for the upper Great Plains.

“I’m focused on building the future, not just for North Dakota Port Services,” Johnson says. “I like to look at it as a vision for our region in the transportation sector for our children, grandchildren, great grandchildren and, hopefully, generations to come.”

Author: Patrick C. Miller
Staff Writer, The Bakken magazine
701-738-4923
pmiller@bbiinternational.com