Panama Canal Makes Way for Larger Vessels
As of May 21, the maximum allowable length for vessels transiting the Panama Canal’s Neopanamax Locks has increased from 367.28 meters (1,205 feet) to 370.33 meters (1,215 feet). With this increase, 96.8 percent of the world’s container fleet can now transit the Canal, thereby shortening routes and benefiting economies around the world.
The Panama Canal Authority also increased the maximum allowable draft to 15.24 meters (50 feet). By offering larger capacity along with shorter travel distances, the Canal reduces vessels’ fuel consumption and emissions and helps reduce global greenhouse gases.
The changes in allowable vessel length and draft were made in anticipation of the fifth anniversary of the Canal’s expansion, on June 26. The Panama Canal is an important outlet for containerized grain shipped from the U.S. East and Gulf Coasts destined for China and other Asian countries.
Minnesota Approves Over $800 Million for Road Projects
Minnesota State lawmakers recently approved a transportation budget bill to provide over $800 million for State roads and bridges. As part of the budget, the State’s trunk highway system will receive $413 million in trunk highway bonds, including $200 million for the Corridors of Commerce program, $100 million for general State road construction, and $113 million for State road construction projects under the Minnesota Department of Transportation’s Regional and Community Investment planning category.
As a major producer of corn and soybeans, Minnesota depends on the condition and performance of its roads for grain transportation. As of 2019, 4.7 percent (13,346) of bridges in Minnesota were structurally deficient, and in 2018, 16 percent of roads in the State were in poor condition—according to the American Society of Civil Engineers.
The new funding is expected to boost highway capacity and improve freight movement statewide, which can benefit grain transportation.
STB Asks Class I Railroads To Provide Information on Container Congestion
On July 22, the Surface Transportation Board (STB) asked Class I railroads to provide information on congestion at key container terminals. STB also requested the railroads’ policies and practices for assessing storage charges. These requests come in response to concerns over persistent intermodal congestion and significant container storage fees some shippers must pay to receive their containers.
Grain News on AgFax
STB hopes to better understand the magnitude of container congestion, the purpose and effect of storage fees, and whether there is relief for receivers who cannot facilitate the release of their containers. Tracking just one of several affected grain commodities, the Soybean Transportation Coalition expects “supply chain issues for exporters to continue for the foreseeable future, including the container squeeze and rail availability, as well as the nationwide shortage of truck drivers.”
Soybeans are the largest U.S. containerized grain export, representing more than 40 percent of the market on average.
Snapshots by Sector
For the week ending July 15, unshipped balances of wheat, corn, and soybeans totaled 17.4 million metric tons (mmt). This was 6 percent lower than last week and 13 percent lower than the same time last year.
Net corn export sales were −0.089 mmt, significantly lower than the past week. Net soybean export sales were 0.062 mmt, significantly higher from the previous week. Net weekly wheat export sales were 0.473 mmt, up 11 percent from last week.
U.S. Class I railroads originated 20,964 grain carloads during the week ending July 17. This was a 22-percent increase from the previous week, 6 percent fewer than last year, and 10 percent fewer than the 3-year average.
Average August shuttle secondary railcar bids/offers (per car) were $117 below tariff for the week ending July 22. This was $108 more than last week and $389 lower than this week last year. There were no non-shuttle bids/offers this week.
For the week ending July 24, barged grain movements totaled 511,872 tons. This was 32 percent less than the previous week and 31 percent less than the same period last year.
For the week ending July 24, 322 grain barges moved down river—177 fewer barges than the previous week. There were 701 grain barges unloaded in New Orleans, 30 percent more than the previous week.
For the week ending July 22, 26 oceangoing grain vessels were loaded in the Gulf—unchanged from the same period last year. Within the next 10 days (starting July 23), 49 vessels were expected to be loaded—36 percent more than the same period last year.
As of July 22, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $81.00. This was 4 percent less than the previous week. The rate from the Pacific Northwest to Japan was $44.00 per mt, 2 percent less than the previous week.
For the week ending July 26, the U.S. average diesel fuel price decreased .2 cents from the previous week to $3.342 per gallon, 91.5 cents above the same week last year. This is the first time in 13 weeks that the national average diesel price has decreased.