Dmitriev Mikhail | BIGSTOCK

Jul 28, 2022

Excessive Grain Rail Service Delays Call for Policy Action

Freight Rail Shipping Fair Market Act bill drafted to address poor rail performance

Unfilled grain car orders — the number of cars a shipper, like a grain elevator, ordered but did not receive — are up 231% between the second quarter of 2021 and second quarter of 2022, according to American Farm Bureau Federation Economist Daniel Munch.

Service for grain shippers has been inadequate since Munch’s first quarter Market Intel analysis, and consequences are rippling across the ag supply chain.

Shipping delays crisscross the nation

“Most order delays are lasting 11 days or more, putting grain mills or livestock operations reliant on a steady stream of raw materials and feed in limbo,” Munch wrote.

After months of contending with Union Pacific’s service failures on corn shipments of 100-car unit trains, Livingston, CA-based Foster Poultry Farms filed an emergency service order with the Surface Transportation Board to alleviate harm to its poultry flocks.

The STB ordered UP in June to deliver on its commitment to move the unit trains of corn from origins across the Midwest to California for Foster to process corn meal for poultry feed.

Earlier this summer, farmer-owned Landus Cooperative said in a letter to the STB that rail transit times have more than doubled. The cooperative buys grain from 7,000 farmers in Iowa and has been forced to turn away loads of corn and soybeans at country grain storage elevators while waiting 20 days for rail carriers to pick up loaded grain cars.

Proposed bill could level playing field for ag shippers

To bring back adequate, resilient freight rail service to agricultural stakeholders, Peter DeFazio (D-OR), House Transportation and Infrastructure Committee Chairman and Donald Payne, Jr. (D-NJ), Subcommittee Chairman, drafted a transportation bill aimed at improving freight rail service for agricultural shippers.

The Freight Rail Shipping Fair Market Act, supported by trade groups like the National Grain and Feed Association, would reauthorize the STB to create rules for shippers to charge demurrage on railroads, providing customers a way to incentivize the railroads’ performance the same way railroads incentivize their customers.

“The draft Freight Rail Shipping Fair Market Act includes sensible and necessary policy measures to level the playing field for agricultural shippers currently operating in a non-competitive system,” NGFA said in a statement.

If passed, the bill would enact policies to deter future rail service failures and further define the common carrier obligation for railroad performance to reach established minimum service standards.

NGFA urged its members to contact their Congressional representatives to support the bill and help address insufficient rail service across the agricultural supply chain.

Elise Schafer

Sponsored Items

Recently Added to Buyer's Guide

AgraStrip Pro GMO Rapid Test Kits

  • Independent, simultaneous testing of up to four samples
  • Limits of detection as low as 0.1%

Granulex 5

  • Up to 30% reduction in energy consumption per ton
  • Connects to Bühler Insights to enable 24/7/365 data-based decision making

Automated Extrusion Control Systems

  • Designed for increased efficiency, higher production rates, reduced waste
  • Consistent results and quality across production lines, shifts and plants

Catwalks & Towers

  • Includes handrail trusses, outrigger trusses, and walk-thru truss style catwalks with standard spans over 200 feet
  • Welded sections and panels allow for easy field assembly while maximizing freight

Market+ Merchandise

  • Bid Management to upload or enter bids, easily adjust basis and other details, and publish to originators and farmers
  • Competitive insights to see how bids compare to other nearby bids

Hydro-Mix XT-FS Sensor

  • Designed to measure moisture in flowing material where there is a food safety requirement
  • Installed in ducting, conveying and mixing systems in process control environments


Marketwatch: Dec, 06

US Corn Price Idx: ZCPAUS.CM

open: 6.5328
high: 6.55
low: 6.4408
close: 6.4673

US Soybean Price Idx: ZSPAUS.CM

open: 14.2059
high: 14.2809
low: 14.1255
close: 14.1516

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 8.3708
high: 8.3933
low: 8.0459
close: 8.0561

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 6.9245
high: 6.947
low: 6.6307
close: 6.6779