UP’s unit train to southern California bulk grain transload operation up and running

Union Pacific Railroad last week completed its second full unit train movement of grain products from a newly opened transload facility northeast of Los Angeles to container terminals at the ports of Los Angeles and Long Beach, the Journal of Commerce reports.

The transload facility is located in Yermo, Calif., about 130 miles from the port complex. UP will move distillers dried grain, a byproduct of ethanol production that is used in animal feed, as well as other grain products, in unit hopper-car trains from the Midwest to Yermo.

UP’s plant-to-port project will also shuttle empty containers from the harbor area to Yermo. The grain products will be transloaded from the hopper cars to the marine containers, and UP will carry the loaded containers to on-dock railyards at the ports for export to Asia.

Although the containerized export of grain is still quite small compared to total U.S. grain exports via bulk shipment, exporters in the Midwest have been telling the railroads and ports for years there is significant potential for containerized grain exports if there were more transloading operations close to the ports.

Grain exporters face a logistical problem in securing empty marine containers because empties are found in inland and coastal urban areas. The cost of positioning empty marine containers to grain facilities in the rural heartland can be so costly that it knocks the grain producers out of the export market.

However, the movement of grain products in unit trains of rail hopper cars 2,000 miles to Southern California and transloading the grain into marine containers near the ports, which always have a surplus of empties, can be a cost-effective solution to the problem.

UP said its plant-to-port program will transport DDGs and other grain products from throughout the Midwest to the Yermo transload facility.

DDG exports have resumed the strong growth they were experiencing until last year when China threatened to initiate anti-dumping procedures against U.S. exporters of distillers dried grain. However, nothing came from the exercise and China quietly dropped the investigation this summer.

Source: Journal of Commerce Online