Weather

    Moving Grain: West Coast Longshore Union May Face Bankruptcy

    West Coast Longshore Union May Face Bankruptcy

    The International Longshore and Warehouse Union (ILWU) has stated it may file for Chapter 11 bankruptcy protection. The announcement follows a Federal jury award of $94 million in a lawsuit against ILWU—a sum far exceeding the union’s $20 million in declared assets.

    In a February 14 hearing, ILWU attorneys will try to convince U.S. District Judge Michael Simon to reduce the award. Currently, ILWU workers handle every shipping container crossing West Coast docks. As a result of this financial burden, employers hope ILWU will consider the implications of future work slowdowns and other transportation-disrupting tactics.

    In early January, SM Lines restored service to the Port of Portland where container movements have been dormant for 4 years. Approximately 63 percent U.S. containerized grain exports move through West Coast ports.

    Norfolk Southern Customers Add or Expand Rail-Served Facilities

    On January 30, Norfolk Southern Railway (NS) announced it worked with 77 businesses across 16 States to open new or expand facilities on its rail lines in 2019.

    According to NS, these businesses invested nearly $2 billion to develop 54 new rail-served commercial projects and expand 23 existing ones. NS estimates all of this activity will generate more than 1,160 customer jobs and more than 62,300 carloads of new rail traffic annually. A fertilizer facility in Aurora, NC, was among the largest development projects.

    In the past 10 years, NS has participated in locating or expanding 974 industrial facilities, which represent nearly $62 billion in private investment.

    President Signs United States-Mexico-Canada Trade Agreement

    Signed by President Trump on January 29, the United States-Mexico-Canada Trade Agreement (USMCA) allows preferential market access for U.S. agricultural products, while reducing trade-distorting policies, increasing transparency, and ensuring nondiscriminatory treatment. Part of the agreement eliminates all tariffs on U.S. wheat exports to Mexico, one of the top U.S. export markets.

    The end of these tariffs should provide an opportunity for wheat exports to grow. In addition, U.S. wheat exports to Canada will receive reciprocal grading treatment and will not require a “country of origin” certificate on their quality grade or inspection certificate.

    This change will enhance the competitiveness of U.S. wheat growers along the U.S.-Canada border. The agreement could boost the demand for U.S. grain in both countries and consequently increase cross-border movements and rail deliveries to ports.

    Snapshots by Sector

    Export Sales

    For the week ending January 23, unshipped balances of wheat, corn, and soybeans totaled 22.5 million metric tons (mmt). This represented a 28-percent decrease in outstanding sales, compared to the same time last year. Net corn export sales reached 1.235 mmt, up 23 percent from the past week. Net soybean export sales were 0.470 mmt, down 41 percent from the previous week. Net weekly wheat export sales reached 0.646 mmt, down 7 percent from the previous week.

    Rail

    U.S. Class I railroads originated 21,723 grain carloads during the week ending January 25. This was a 12-percent increase from the previous week, 1 percent more than last year, and 2 percent lower than the 3-year average.

    Average February shuttle secondary railcar bids/offers (per car) were $138 below tariff for the week ending January 30. This was $229 less than last week and $367 lower than this week last year. There were no non-shuttle bids/offers this week.

    Barge

    For the week ending February 1, barge grain movements totaled 546,702 tons. This was a 16.4-percent increase from the previous week and 54 percent more than the same period last year.

    For the week ending February 1, 335 grain barges moved down river—49 barges more than the previous week. There were 582 grain barges unloaded in New Orleans, 17 percent fewer than the previous week.

    Ocean

    For the week ending January 30, 29 oceangoing grain vessels were loaded in the Gulf—14.7 percent fewer than same period last year. Within the next 10 days (starting January 31), 43 vessels were expected to be loaded—17.3 percent fewer than the same period last year.

    As of January 30, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $45.00. This was 1 percent less than the previous week. The rate from the Pacific Northwest to Japan was $24.25 per mt, 2 percent less than the previous week.

    Fuel

    For the week ending February 3, the U.S. average diesel fuel price decreased 5.4 cents from the previous week to $2.956 per gallon, 1.0 cent below the same week last year.

    Full report.




    The Latest


    Send press releases to Ernst@Agfax.com.

    View All Events


    Send press releases to Ernst@Agfax.com.

    View All Events

    Weather