KANSAS CITY, MISSOURI, US — Millers, merchandisers, and traders this week said railroad performance was steady from the previous week. Prices were edging higher for grain transportation by rail and truck.
Millers and brokers who participate in cash wheat markets said behind-schedule delivery of empty rail cars at country origins was a lingering problem. The issue was most prevalent in the west where some car placements by Class 1 railroads were running 10 days to two weeks behind schedule.
“It still feels like in the west, railroads continue to slip,” a Midwest miller said. “Obviously, we had the long weekend in there, where it can feel like pulling teeth, even beyond the recent lag, to get service.”
In the week ended March 25, the average railcar bids-offers for an April shuttle were $18 above tariff per car in the secondary market. That was down $199 from the previous week and $7 lower than the same week in 2020. There were no non-shuttle bids-offers, the USDA said.
Merchandisers said trucks were available but more challenging to find as drivers were offered more lucrative temporary gigs.
“This is a very seasonal situation,” an Upper Midwest merchandiser said. “Once we’re into planting season for corn and soybeans, which is happening in the Southwest region, drivers get paid more for seasonal, monthlong-type jobs. That pulls more truckers out of hauling grain such as midds.”
The American Association of Railroads on April 7 released statistics for carloads, containers and trailers originated by US railroads for the first quarter of 2021, March 2021, and the week ended April 3.
In accompanying comments, the AAR said, “for some rail traffic categories, percentage changes for the current month compared with the same month in 2020 are inflated because of the widespread shutdowns — and subsequent large reduction in rail volumes — that impacted many economic sectors last year at this time.”
Total US carload traffic in the first quarter was 2,911,097 carloads, down 3%, or 77,267 carloads, from the same period last year. Intermodal units totaled 3,619,546, up 13%, or 421,513 containers and trailers, compared to last year. Total combined US traffic for January-March 2021 was 6,530,643 carloads and intermodal units, up 6% from 2020.
Grain carloads originated in the first quarter totaled 329,137, averaging 25,318 carloads per month, a 26% increase over the same period in 2020.
For March, US railroads originated 1,156,158 carloads, up 4%, or 45,504 carloads, from the same month last year, and originated 1,430,331 containers and trailers, up 24%, or 276,781 units, from March 2020. Combined US carload and intermodal originations in March 2021 were 2,586,489, up 14% from March 2020.
Eleven of the 20 carload commodity categories saw year-over-year carload gains in March 2020. Among them was grain, up 23,144 carloads, or 22%.
For the week ended April 3, total North American rail volume on 12 reporting US, Canadian and Mexican railroads totaled 324,672 carloads, up 8% compared with the same week last year. Grain carloads totaled 38,549, up 15% from the same week in 2020.
US railroads reported 229,814 carloads for the week, up 9% from the same week a year ago. US grain carloads totaled 25,679, up 23% from the same week a year ago.
Canadian railroads reported 77,646 carloads for the week, up 5% compared with the same week in 2020. Canadian grain carloads in the week totaled 11,930, up 16% from the same week a year earlier.
Mexican railroads reported 17,212 carloads for the week, up 16% compared with the same week last year. Mexican grain carloads totaled 940 for the week, down 59% year-over-year.
The USDA’s Agricultural Marketing Service in its latest Grain Transportation Report said the 2021 Upper Mississippi River navigation season began March 19. However, capacity was limited until March 22, when the US Army Corps of Engineers completed repairs and maintenance and reopened Lock and Dam 25 adjacent to Winfield, Mo.
Meanwhile, high water and flooding continued to challenge navigation on the Lower Mississippi River, delaying grain shipments and raising operation costs since last week. The industry expected grain barge movements and loading operation delays in the Gulf.
In the week ended March 27, total downbound grain movements reached 851,302 tons, the highest level since early February. That total was 18% higher than the previous week and 91% higher than the same period last year. In the same week, 526 grain barges moved down river, 63 barges more than the previous week. At the same time, barges unloaded in New Orleans totaled 627, down 19% from the previous week and the lowest weekly number thus far in 2021.
The Suez Canal Authority said the canal was fully reopened, operating around the clock with navigation in both directions by April 1. The canal had been blocked for six days after the enormous container vessel Ever Given ran aground March 23. Hundreds of vessels lined up to navigate the canal during the blockage.
Some grain originating in the Black Sea region ships through the Suez, but most US grain destined for Asia passes through the Panama Canal, the USDA said.
In the week ended March 25, 33 oceangoing grain vessels were loaded in the Gulf, 3% more than the same period in 2020. In the 10 days starting March 26, 48 vessels were expected to be loaded, 23% more than the same period last year, the USDA said.
The rate for shipping one tonne of grain from the US Gulf to Japan was $61.50 on March 25, 2% higher than the previous week. The rate from the Pacific Northwest to Japan was $36 a tonne, 3% more than the previous week.
For the week ended March 29, the US average diesel fuel price decreased 3.3¢ from the previous week to $3.161 per gallon, 57.5¢ above the same week last year, the US Department of Energy said.
By region, the lowest average on-highway diesel fuel price was $2.93455 per gallon on the Gulf Coast. The highest was California at $3.982 per gallon. The Midwest average price was $3.104 and the East Coast as a whole was $3.161.