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Rail News Home Shippers

3/6/2015



Rail News: Shippers

USDA report: Rail congestion impacted grain shipments, increased car premiums in Upper Midwest


Poor rail service left some major grain-producing states in the Upper Midwest with significant unshipped produce last year and into 2015, according to a newly released U.S. Department of Agriculture study requested by Sens. John Thune (R-S.D.) and Amy Klobuchar (D-Minn.).

The states were left with grain and oilseed stocks in storage up to 40 percent higher than in prior years, which led to less permanent storage available for this year's harvest, according to the study. Production and stocks exceeded permanent capacity by over 900 million bushels for the 2014-15 harvest.

"Reliable and affordable rail service is critical for providing Minnesota’s agriculture producers with access to markets beyond our state’s borders," Klobuchar said in a statement. "While service has improved in recent months, delays have caused lost sales, involuntary shutdowns at processing facilities and disruption to agriculture markets. This report underscores the importance of strong rail service to agricultural producers and will serve as a critical tool as we continue to improve rail service in Minnesota and across the country."

The study also found that shippers paid record-high rail-car premiums due to capacity and service issues, with some shelling out 28 to 150 percent above the average levels for 65 consecutive weeks.

"This report is an important resource for understanding future vulnerabilities," said Thune.



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