Moving Grains: Floods Restrict River Traffic; U.S. Rail Regulations Outdated

High Water Continues on Portions of the Inland Waterways

According to preliminary information from the National Climatic Data Center, the Lower 48 States had the wettest May (and month) since records began in 1895 when rainfall averaged 4.36 inches (150 percent of normal). Flood levels on the Arkansas River have been the highest in 25 years, halting almost all barge operations as no down bound grain traffic has been reported since May 10.

High water on the Mississippi River has required the Coast Guard to restrict traffic in the St. Louis area to day time only for barge tows greater than 600 feet in length. Elsewhere on the Mississippi River, flooding is occurring at Chester, IL, Cape Girardeau, MO, and Thebes, IL. Flooding is also reported at Beardstown, IL, on the Illinois River.

Despite the less-than-ideal navigation conditions, year-to-date grain tonnages on the locking portions of the Arkansas, Ohio, and Mississippi Rivers are 13 percent higher than the 5-year average.

National Academies’ Report Finds U.S. Rail Regulations Outdated, Recommends Modernizing

On June 10, the Transportation Research Board (TRB) of the National Academies released the report, Modernizing Freight Rail Regulation, and provided testimony on the report before the Surface Transportation Board (STB) in the proceeding Rail Transportation of Grain, Rate Regulation Review.

The TRB study found current policies designed to protect rail shippers from excessive rail rates are not working for shippers of most commodities, including grain. The study recommends the lengthy and costly STB rail rate appeal procedures be replaced by arbitration, a faster and more economical process.

According to the study, arbitration is a more accessible process to shippers but does not threaten the earnings railroads need to pay for their capital-intensive networks. The study also recommends reciprocal switching be used as a remedy for unreasonable rail rates.

AMS Posts Comparative Study on Ocean Grain Freight Rates

On June 3, AMS released a summary of a study by Kansas State University’s International Grains Program Institute United States-South America Ocean Grain Freight Spreads, which examines different cost structures for shipping grains and oilseeds via ocean to Asia and Europe from Argentina, Brazil, and the United States.

The study shows that ocean freight rates for grain cargoes from South America to Asia are often less expensive than from the U.S. Gulf because of dry-bulk vessel route patterns, lower cost port charges, higher Panama Canal tolls, and less burdensome navigation restrictions. Relatively small differences in seaborne transportation costs can make South American grain exports more competitive than those of the United States, diverting exports to Brazil or Argentina.

Grain Inspections Down but Soybeans Rebound

For the week ending June 4, total inspections of grain (corn, wheat, and soybeans) from all major export regions reached 1.26 million metric tons (mmt), down 12 percent from the past week, 31 percent below last year, and 14 percent below the 3-year average.

Although soybean inspections jumped almost 200 percent from the previous week, the increase could not offset the drop in wheat and corn inspections. Wheat and corn inspections decreased 17 and 26 percent from the past week. Grain inspections decreased 3 percent in the Pacific Northwest, but they decreased 19 percent in the Mississippi Gulf as corn dropped to the lowest level since late March.

Snapshots by Sector

Export Sales

During the week ending May 28, unshipped balances of wheat, corn, and soybeans totaled 16.7 mmt, 3 percent lower than at the same time last year. Corn export sales reached 0.465 mmt, down 29 percent from the previous week. Wheat export sales had net sales reductions of .002 mmt from the previous week. Soybean export sales of 0.13 mmt were 60 percent lower than the prior week.


U.S. railroads originated 18,464 carloads of grain during the week ending May 30, down 6 percent from last week, 6 percent from last year, and 3 percent from the 3-year average.

During the week ending June 4, average June shuttle secondary railcar bids/offers per car were $342 below tariff, up $38 from last week and $767 lower than last year. Non-shuttle secondary railcar bids/offers were $19 below tariff, up $14 from last week and $19 lower than last year.


During the week ending June 6, barge grain movements totaled 813,543 tons–about 22 percent higher than the previous week and 3 percent lower than the same period last year.

During the week ending June 6, 526 grain barges moved down river, up 18 percent from last week; 440 grain barges were unloaded in New Orleans, up 4 percent from the previous week.


During the week ending June 4, 28 ocean-going grain vessels were loaded in the Gulf, 24 percent less than the same period last year. Forty-three vessels are expected to be loaded within the next 10 days, 2 percent less than the same period last year.

During the week ending June 5, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $30 per metric ton (mt), unchanged from the previous week. The cost of shipping from the PNW to Japan was $16.75 per mt, up 2 percent from the previous week.


During the week ending June 8, U.S. average diesel fuel prices decreased 0.3 cents from the previous week to $2.88 per gallon–down $1.01 from the same week last year.

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