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Grain Movement by Rail Improving Slowly

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Grain Movement by Rail Improving Slowly

 

As the very large harvest has progressed, the shortage of rail cars and locomotives has caused massive delays and backups across the country.  Under pressure from the federal government, the rail industry has made some major investment to address the situation.  Jon Miller, with the Burlington Northern Santa Fe, says they have invested over $5 billion in buying more rail cars and improving their infrastructure. He said their grain shipment turnaround times have improved in recent weeks, “Frankly we are moving more soybeans this harvest than we did last year, and we have seen improved shipments over the past 7 weeks.”

 

 

 

The Federal government has mandated that the railroads issue weekly reports on grain movement, something Miller says is being done, “We understand that shippers need to have a better idea of what to expect from us so they can make their plans and better serve their farmers. We get that, we understand that, and have been doing it for the last several months.”  The railroad’s most recent (October 3) report to the Federal Surface Transportation Board, shows that grain car orders more than three days past the date ordered by a shipper have hit 4,119, a 41% jump over the previous week. “This is fairly normal, but what is different is that we want to make sure we’re communicating to customers as the delays increase,” Miller said.

 

 

The situation is worse in the Dakotas and Minnesota, and some elevators report the delays are still long and freight rates high.  Mike Silver, with Kokomo Grain, says things are not that bad here in the Eastern Corn Belt, “Things are better here in the east, but the backup in the west backs up the whole system.” Silver says commercial elevators have had to turn to trucks to move grain.  North Dakota State University ag economist Frayne Olson has estimated the costs of rail delays to his state’s farmers at $66 million from an abnormally wide basis on corn, soybeans, and wheat during four of the worst months of delays from January through April of this year.