Report says railroads improving service from last year's struggles

WASHINGTON, Dec. 23, 2014 – A report shows railroads are demonstrating improvement in handling grain cargo, easing concerns that the struggles experienced with the 2013 grain harvest may carry over to this year’s crop.

The report, an update of the study from the Soy Transportation Coalition (STC) with the University of Minnesota, shows that 78 percent of participating grain handling facilities report that cycle times are faster than a year ago. STC Executive Director Mike Steenhoek said the rail companies “are continuing to demonstrate quality service in handling the 2014 harvest.”

This is the third update of the research project, officially entitled “2014 Harvest: Attaching a Garden Hose to a Fire Hydrant.” The first two reports showed progress, but this update – which covers the period from Dec. 5 through Dec. 19 – also showed 54 percent of respondents reported having no past due orders. The research project is working to monitor and document rail service in the upper Midwest, specifically North Dakota, South Dakota, Minnesota and Nebraska.

Some other key statistics from the report:

• The 78 percent of customers saying service was faster than last year is up from 67 percent when the surveys began Nov. 7.
• While there was a 54 percent response indicating no past due orders, those with past due orders saw their delay increase from 13.4 days beginning Nov. 21 to 30 days in the current time period.
• Only 3 percent of respondents reported feeling “more” pressure on their storage systems. The report credited some of this to farmers storing more of their own grain and waiting for commodity prices to improve.
• While the 2014 harvest will be regarded as significant and perhaps historic, a number of the surveyed areas have reported more modest volumes than earlier anticipated.  Survey respondents mentioned “poorer crops” in certain areas and the harvest not “as expected.” 
• Fewer respondents reported storing grain in grain piles – 55 percent – in the most recent report. This is down from 67 percent in the first update. Bunkers are used in storage at 47 percent of responding elevators and 17 of respondents reported using bags.
• 41 percent of participants reported still experiencing rail service delays and diminishing storage capacity, down from 60 percent in the second set of results.
• The average price of freight has plummeted in recent months. The first set of data noted a cost of $784 per railcar, but the most recent results show that cost has dropped to $140 per railcar.

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