Grain shippers report much-improved railroad service

Grain shippers report much-improved railroad service

Longer harvest, more storage, improvement by railroads all cited as reasons for improved rail service

Railroads are doing a much better job of moving the latest U.S. grain harvest, compared with a year ago, according to respondents in a recent industry survey.

The improvement from last year's well-publicized shipping delays has been attributed to the longer 2014 harvest, investments by railroads in equipment and staff, a milder winter, and farmers storing more of their grain.

Longer harvest, more storage, improvement by railroads all cited as reasons for improved rail service. (Photo by Spencer Platt/Getty Images)

"Last year, there was widespread frustration and exasperation throughout agriculture. This year, rail service – especially in the western parts of the corn and soybean belt – is much more reliable and responsive. Railroads need to be commended for their performance thus far. We hope to see this continue," Mike Steenhoek, executive director of the Soy Transportation Coalition, said in a statement.

Much of last year's railroad issues related to the unusually cold winter, which forced railroads to run shorter trains at slower speeds.

"We've had a handful of short term opportunities (1 to 2 weeks) over the past six years where rail has allowed us to be competitive, but we're approaching a consecutive four-month string where rail bids are arguably the best choice available," said Todd Tesdal, grain operations manager at the GrainCo elevator in Mazon, Ill.

Lower crude oil prices this year may have had a role in the better rail service, as it likely made more rail equipment available for grain, he said.

Related: Senators Request USDA Economic Report on Rail Service Shortfalls

The Coalition and the University of Minnesota have been surveying grain shippers since the fall 2014 harvest to monitor rail service. The latest results are based on responses collected during the latter half of January.

• 100% of participating grain handling facilities report that cycle times for railroads are faster than a year ago – an increase from 67% in the first survey and from 91% in the fourth survey.

• 69% recorded no rail orders as past due – an increase from 33% in the first survey and 61% from the fourth survey.

• No respondents reported "much more" storage pressure at their facilities; and only 10% reported "more" pressure on storage. 90% responded that storage pressure was "the same," "less," or "much less."

• The number of round trip "turns per month" continues to increase – from 2.2 turns per month in the initial survey to 2.33 turns per month in the most recent survey.

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