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Supply chain issues- we’ve heard those words far too often over the past couple of years. Unfortunately, some of those issues persist.
One of the main metrics for railway service quality is unfilled grain car orders, the number of cars a shipper ordered but didn’t receive. Danny Munch, American Farm Bureau Federation Economist, says the data shows shippers are waiting a long time to get the grain cars they need.
“So far in 2023, average weekly unfilled grain car orders one or more days overdue have numbered over 16,000 a week, that’s up 54 percent from last quarter and 54 percent the same magnitude from quarter one of last year. Of those record unfilled orders one or more days overdue, almost 75 percent remain 11 or more days overdue.”
Munch says winter weather is the biggest challenge currently.
“Most of the issues we’re seeing in unfilled orders are concentrated in the upper Midwest in states like North Dakota and Minnesota. The region has faced intense snowstorms in the first part of the year, which makes moving those cars more difficult. Those weather events are usually more short-term, and we hope those subside as spring comes along.”
Munch adds labor is another hurdle for railways.
“Most railroads are still below pre pandemic employment levels by about three to five percent, which makes it difficult for them to increase capacity. Luckily, though, those numbers are still getting better, still better than the ten percent below that they were about a year ago. And in order to improve service quality, they really need to be fully staffed and growing.”
In Munch’s report (that can be found on the Market Intel page at fb.org), he says despite the recent issues, confidence in railway efficiency appears to be increasing. Though labor numbers still lag behind, gains continue to be made, building a stronger foundation for future demand capacity.
His report also suggests that overall supply chain pressures are easing, sending a positive signal to farmers revving up for a new marketing year.
Source: NAFB News Service