Moving Grain: Effects of Covid-19 on America’s Infrastructure

    Grain barges on the Columbia River. ©Creative Commons - Linda

    ASCE Releases Report on the Effects of Covid-19 on America’s Infrastructure

    The American Society of Civil Engineers (ASCE) released a status report on the pandemic’s effects on the Nation’s bridges, dams, inland waterways, ports, and roads. ASCE projects a 30-percent revenue decline in the next 18 months for State Departments of Transportation (DOTs) because of declining gas tax revenue.

    To maintain bridges, roads, and transit systems as safe and reliable and aid the Nation’s long-term economic recovery, ASCE recommends Congress provide $50 billion in immediate, short-term relief for State DOTs.

    ASCE’s recommendations to Congress include quickly enacting various other long-term infrastructure-enhancing measures as well. The 2021 ASCE Infrastructure Report Card will be released in February 2021.

    STB Announces Final Rule on Railroad Market Dominance

    The Surface Transportation Board (STB) issued its a final rule on evaluating market dominance in rate reasonableness proceedings. Per the final rule, a complainant must demonstrate these seven conditions to have a prima facie showing of market dominance:

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    1. the movement has a revenue-to-variable cost ratio of 180 percent or greater;
    2. the movement would exceed 500 highway miles between origin and destination;
    3. there is no intramodal competition from other railroads;
    4. there is no barge competition;
    5. there is no pipeline competition;
    6. the complainant has used trucks for 10 percent or less of its volume (by tonnage), subject to the rate at issue over a 5-year period; and
    7. the complainant has no practical build-out alternative (regardless of transportation mode), because of physical, regulatory, financial, or other issues (or combination of issues).

    Complainants who cannot demonstrate the presence of these seven conditions still retain the option of making a traditional market dominance case, which involves a more thorough qualitative analysis of whether there are any feasible transportation alternatives sufficient to constrain the railroad’s rates.

    Either approach provides opportunity to defendant railroads to rebut a complainant’s evidence. The final rule will be effective on September 5, 2020

    Organizations Urge Governor To Address California’s Declining Port Market Share

    A broad coalition of trade associations sent a letter urging Governor Newsom and the California Legislature to take action to prevent continued loss of California’s port market share. The group notes the West Coast ports’ market share has declined 19.4 percent since 2006.

    To address the major causes of the market share loss, the letter proposes promoting California ports, meeting the challenge from East and Gulf Coast States’ ports, evaluating current State and regional regulations, and reconciling State laws encouraging environmental and efficiency mandates with the need to retrain workers.

    Snapshots by Sector

    Export Sales

    For the week ending July 23, unshipped balances of wheat, corn, and soybeans totaled 18.8 million metric tons (mmt). This represented a 12-percent increase in outstanding sales from the same time last year.

    Net corn export sales were −0.029 mmt, down significantly from last week. Net soybean export sales were 0.258 mmt, up 21 percent from the previous week. Net wheat export sales were 0.677 mmt, up 10 percent from the previous week.

    Rail

    U.S. Class I railroads originated 20,509 grain carloads during the week ending July 25. This was an 8-percent decrease from the previous week, 8 percent less than last year, and 8 percent lower than the 3-year average.

    Average August shuttle secondary railcar bids/offers (per car) were $556 above tariff for the week ending July 30. This was $284 more than last week and $760 more than this week last year. There were no non-shuttle bids/offers this week.

    Barge

    For the week ending August 1, barge grain movements totaled 890,050 tons. This was 6 percent more than the previous week and 31 percent more than the same period last year.

    For the week ending August 1, 557 grain barges moved down river—32 more barges than the previous week. There were 616 grain barges unloaded in New Orleans, 15 percent more than the previous week.

    Ocean

    For the week ending July 30, 25 oceangoing grain vessels were loaded in the U.S. Gulf—27 percent fewer than the same period last year. Within the next 10 days (starting July 31), 35 vessels were expected to be loaded—31 percent fewer than the same period last year.

    As of July 30, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $41.50. This was unchanged from the previous week. The rate from the Pacific Northwest to Japan was $21.75 per mt, 5 percent more than the previous week.

    Fuel

    For the week ending August 3, the U.S. average diesel fuel price decreased 0.3 cents from the previous week to $2.424 per gallon, 60.8 cents below the same week last year.

    Full report.




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