Moving Grain: Modernizing Shortline, Regional Railroad Infrastructure

    Photo by Ken Hammond, USDA

    DOT Expands Loan Pilot Program For Modernizing Shortline and Regional Railroad Infrastructure

    The U.S. Department of Transportation (DOT) issued a notice of funding opportunity to expand eligibility and access to the Railroad Rehabilitation and Improvement Financing Express (RRIF Express) pilot program.

    RRIF Express aims to reduce the time and costs required to secure long-term, low-cost loans for modernizing older short line and regional freight and commuter rail infrastructure. The program can provide loans of up to $150 million for qualified borrowers.

    The notice of funding opportunity increases loan amounts from $50 million to $150 million; makes more projects eligible for loans; raises the portion of a loan eligible for refinancing from 40 percent to 75 percent; and allows consideration of new categories of environmental review. Additionally, the notice raises Credit Risk Premium assistance from 5 percent to up to 10 percent of the loan value, capped at $5 million per application.

    Applications will be accepted until all available financing is exhausted.

    AGTC and TradeLanes Survey Shippers on Effects of “Earliest Return Date” Changes

    According to shippers, shipping lines often poorly communicate changes to “earliest return dates” (ERDs), creating additional costs for shippers. In a recent survey by the Agriculture Transportation Coalition (AgTC) and supply chain technology firm TradeLanes, 92 percent of shipper-respondents wanted to pursue industry action on ERD issues.

    Over 75 percent of respondents said their carrier bookings did not always have a listed ERD, and 78 percent reported their shipments have incurred extra costs as a result of ERD changes. Most respondents reported more than 25 percent of their shipments had had an ERD change since the start of the COVID-19 pandemic.

    Grain Inspections Recede but Remain Above Average

    For the week ending October 29, total inspections of grain (corn, wheat, and soybeans) for export from all major U.S. export regions totaled 3.2 million metric tons (mmt). Total grain inspections were down 21 percent from the previous week, up 50 percent from last year, and up 19 percent from the 3-year average.

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    The drop in inspections was driven by a 28-percent decrease in wheat inspections, destined primarily to Latin America, and a 26-percent decrease in soybean inspections, destined mainly to Asia. Corn inspections, however, increased 6 percent from week to week. Despite the week-to-week drop in grain inspections, inspections during the last 4 weeks were 56 percent above last year and 36 percent above the 3-year average.

    Grain inspections decreased 20 percent from the previous week in the Pacific Northwest (PNW) and decreased 28 percent in the Mississippi Gulf. Year to year, total year to date inspections are up 9 percent.

    Snapshots by Sector

    Export Sales

    For the week ending October 22, unshipped balances of wheat, corn, and soybeans totaled 62.8 million metric tons (mmt). This surpassed last week’s previous record high for outstanding sales.

    Net corn export sales were 2.244 mmt, up 23 percent from the past week. Net soybean export sales were 1.621 mmt, down 27 percent from the previous week. Net weekly wheat export sales were 0.743 mmt, up significantly from the previous week.

    Rail

    U.S. Class I railroads originated 26,044 grain carloads during the week ending October 24. This was a 2-percent increase from the previous week, 23 percent more than last year, and 14 percent more than the 3-year average.

    Average November shuttle secondary railcar bids/offers (per car) were $488 above tariff for the week ending October 29. This was $50 more than last week and $275 more than this week last year. There were no non-shuttle bids/offers this week.

    Barge

    For the week ending October 31, barge grain movements totaled 960,442 tons. This was 19 percent less than the previous week and 45 percent more than the same period last year.

    For the week ending October 31, 594 grain barges moved down river—163 barges fewer than the previous week. There were 718 grain barges unloaded in New Orleans, 27 percent lower than the previous week.

    Ocean

    For the week ending October 29, 36 oceangoing grain vessels were loaded in the Gulf—64 percent more than the same period last year. Within the next 10 days (starting October 30), 59 vessels were expected to be loaded—48 percent more than the same period last year.

    As of October 29, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $42.50. This was unchanged from the previous week. The rate from the Pacific Northwest (PNW) to Japan was $23.50 per mt, 1 percent less than the previous week.

    Fuel

    For the week ending November 2, the U.S. average diesel fuel price decreased 1.3 cents from the previous week to $2.372 per gallon, 69.0 cents below the same week last year.

    Full report.




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