STC continues to monitor rail service for 2014 harvest

The Soy Transportation Coalition (STC) is working with the University of Minnesota on a research project, “2014 Harvest: Attaching a Garden Hose to a Fire Hydrant.” The results from the third survey period of December 5 - December 19 were released on December 22nd.

Summary: December 22nd Rail Service Results

“Railroads are continuing to demonstrate quality service in handling the 2014 harvest,” explains Mike Steenhoek, executive director of the Soy Transportation Coalition. “Responses from survey participants highlight that rail performance is not only superior to last year, but has even improved over the past couple months.”

As reported in the most recent update, 78 percent of participating grain handling facilities report that cycle times for railroads are faster than a year ago - an increase from 67 percent in the first survey and 70 percent in the second survey. 54 percent recorded no rail orders as past due - an increase from 33 percent in the first survey and 48 percent in the second survey. Once again no respondents reported “much more” storage pressure at their facilities; and only 3 percent reported “more” pressure on storage. 97 percent responded that storage pressure was “the same,” “less,” or “much less.” Moreover, fewer rail customers are reporting service delays.

While fewer rail customers are reporting past due orders, the average number of days past due for those that are experiencing delays increased from 13.4 days to 30 days.

As highlighted in the December 8th update, the overall favorable performance of the railroads in the analyzed area of the country can be attributed to the following:

• An elongated harvest season. Given how the 2014 harvest occurred over a more elongated period of time, railroads were better able to adjust to the volumes produced by farmers. Historically, when the harvest occurs over a more condensed period of time, railroads are more challenged to accommodate demand for service.
• Railroads have responded to demand. In the most recent survey period, one of the participants stated, “BNSF is performing very well. We have no complaints.”
• Farmers storing grain. Due to the recent retreat in commodity prices, farmers have elected to store more of their soybeans and grain. This has mitigated some pressure thus far on rail demand.
• Favorable weather. While there has been some significant snowfall and cold temperatures over the past couple months, the weather overall has been favorable for transporting soybeans and grain in the surveyed areas. The STC analysis will continue to survey grain receiving locations into March of 2015 in order to monitor how railroads continue to serve agriculture if and when severe winter weather occurs.
• More modest harvest volumes than anticipated. 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.”

The fourth bi-weekly survey will be disseminated following the holidays on January 2. The results will be made available on Monday, January 19.