Moving Grain: Inspections Down, Rail Deliveries to Port Remain Strong

    Photo by Ken Hammond, USDA

    Grain Inspections Down but Rail Deliveries to Port Remain Strong

    For the week ending October 15, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 3.38 million metric tons (mmt). Total grain inspections were down 12 percent from the previous week, up 31 percent from last year, and up 39 percent from the 3-year average.

    Inspections were down 53 percent from the previous week for wheat; up 9 percent for corn; and down 10 percent for soybeans. For the same period, Pacific Northwest (PNW) grain inspections increased 6 percent, and Mississippi Gulf decreased by 22 percent. Despite the drop in grain inspections, weekly rail of grain to all ports remained strong, reaching the highest since late October 2016.

    Increased Asian demand for grain (especially soybeans) in last few weeks have boosted rail deliveries considerably. Compared to the same period in 2019, over the last 4 weeks, total deliveries to each of the major port areas during the last 4 weeks have been much higher. Likewise, deliveries from all ports during the last 4 weeks were up 131 percent from the same period last year.

    U.S. DOL Proposes Independent Contractor Rule

    On September 25, the U.S. Department of Labor (DOL) announced a proposed rule to clarify the distinction between “employee” and “independent contractor” under the Fair Labor Standards Act (FLSA) for consistent public policy definitions. Regarding California’s Assembly Bill 5 (AB-5) enacted earlier this year, DOL’s proposal would not immediately affect how AB-5 is applied to owner-operators or motor carriers.

    A preliminary injunction has so far exempted trucking companies from AB-5. AB-5 prohibits companies from using independent contractors unless their work is “outside the usual course of the hiring entity’s business.” This notice of proposed rulemaking (NPRM) is available for review and public comment until October 26, 2020.

    FMCSA Approves Performance-Based Chassis Inspection Training

    The Federal Motor Carrier Safety Administration (FMSCA) granted a request by the Intermodal Association of North America (IANA) for a 5-year limited exemption to the agency’s time-based approach to the chassis inspection training.

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    The exemption will permit IANA to more efficiently qualify container chassis mechanics as equipment or brake inspectors, using a “performance-based” approach. Although FMCSA did not specify how IANA was to deliver training in chassis inspections, the agency did specify IANA must require a qualifying individual to receive at least 480 hours of training (notably less than the 1 year required without FMCSA exemption).

    Further, one-third of the training must be classroom-based, and two-thirds must be hands-on instruction.

    Snapshots by Sector

    Export Sales

    For the week ending October 8, unshipped balances of wheat, corn, and soybeans totaled 61.3 million metric tons (mmt). This represented a significant increase in outstanding sales from the same time last year.

    Net corn export sales were 0.655 mmt, down 47 percent from the past week. Net soybean export sales were 2.6 mmt, up 2 percent from the previous week. Net weekly wheat export sales were 0.528 mmt, unchanged from the previous week.

    Rail

    U.S. Class I railroads originated 27,434 grain carloads during the week ending October 10. This was a 3-percent increase from the
    previous week, 31 percent more than last year, and 22 percent more than the 3-year average.

    Average November shuttle secondary railcar bids/offers (per car) were $752 above tariff for the week ending October 15. This was $277 more than last week and $658 more than this week last year. There were no non-shuttle bids/offers this week.

    Barge

    For the week ending October 17, barge grain movements totaled 1,115,684 tons. This was 48 percent more than the previous week and 260 percent more than the same period last year.

    For the week ending October 17, 699 grain barges moved down river—224 barges more than the previous week. There were 933 grain barges unloaded in New Orleans, 23 percent higher than the previous week.

    Ocean

    For the week ending October 15, 33 oceangoing grain vessels were loaded in the Gulf—3 percent fewer than the same period last year. Within the next 10 days (starting October 16), 65 vessels were expected to be loaded—23 percent more than the same period last year.

    As of October 15, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $43.00. This was1 percent less than the previous week. The rate from the Pacific Northwest (PNW) to Japan was $23.75 per mt, unchanged from the previous week.

    Fuel

    For the week ending October 19, the U.S. average diesel fuel price decreased 0.7 cent from the previous week to $2.388 per gallon, 66.2 cents below the same week last year.

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