Union Rejects Tentative Agreement With Railroads
On Monday, October 11, the Brotherhood of Maintenance of Way Employees Division (BMWED) rejected its tentative agreement with the railroads—an action which reintroduces the possibility of a freight rail workers strike.
Fifty-six percent of BMWED membership voted against making the agreement permanent. According to BMWED, the rejection of the agreement has resulted in a period of “status quo” (i.e., pre-agreement) conditions, forestalling a strike by the union until after November 19.
Class I railroads have reduced their workforce significantly in recent years and now face a labor shortage. The lack of available labor is the primary factor behind the ongoing rail service problems impacting grain and other shippers.
Port of New York and New Jersey Implements Container Dwell Fee
On August 1, the Port of New York and New Jersey requested comments on its proposed container-imbalance tariff to address empty containers left behind by ocean carriers. The new tariff—revised according to ocean carrier’s feedback—took effect October 1. The port authority will assess the new $100-per-container fee for each quarter in which an ocean carrier’s empty units exceed its import/export balance.
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Also, the new tariff will introduce phased increases to the portions of excess empty containers that carriers must clear. In first quarter 2023, carriers must clear 25 percent of their excess empties. With each subsequent quarter, the portion to be cleared will rise another 25 percent until, by the end of next year, all empty containers should be cleared.
To further enhance temporary storage of empties, the port authority has repurposed 12 acres in nearby ports. In 2020, the Port of New York and New Jersey handled 1.1 million metric tons (mmt) of containerized grain, 13 percent of the total of all U.S. ports.
BNSF Builds Southern California Facility for Intermodal Transloading
BNSF Railway (BNSF) plans to build a new $1.5 billion multiuse rail facility in Southern California to ease movement of inland containers from the West Coast ports. Encompassing approximately 4,500 acres, the Barstow International Gateway facility will include a rail yard, an intermodal facility, and warehousing—all of which will facilitate transloading from international containers to domestic containers.
From the ports of Los Angeles and Long Beach, BNSF will transport cargo to Barstow via the Alameda Corridor and the BNSF main line. BNSF expects the gateway to maximize rail and distribution efficiency while helping reduce truck traffic and highway congestion in the region.
Improvements in BNSF’s west-to-east intermodal service could mean better service for grain and feed shippers who rely on BNSF for service from the Midwest to California.
Snapshots by Sector
Export Sales
For the week ending September 29, unshipped balances of wheat, corn, and soybeans for marketing year 2022/23 totaled 39.81 million metric tons (mmt), down 22 percent from the same time last year and down 2 percent from last week.
Net corn export sales for marketing year 2022/23 were 0.227 mmt, down 56 percent from last week. Net soybean export sales were 0.777 mmt, down 23 percent from last week. Net weekly wheat export sales were 0.229 mmt, down 18 percent from last week.
Rail
U.S. Class I railroads originated 22,745 grain carloads during the week ending October 1. This was a 16-percent increase from the previous week, 12 percent less than last year, and 3 percent lower than the 3-year average.
Average October shuttle secondary railcar bids/offers (per car) were $2,000 above tariff for the week ending October 6. This was $254 more than last week and $1,941 more than this week last year.
Barge
For the week ending October 8, barged grain movements totaled 648,063 tons. This was 105 percent higher than the previous week and 10 percent higher than the same period last year.
For the week ending October 8, 427 grain barges moved down river—207 more barges than last week. There were 472 grain barges unloaded in the New Orleans region, 18 percent fewer than last week.
Ocean
For the week ending October 6, 23 oceangoing grain vessels were loaded in the Gulf—12 percent fewer than the same period last year. Within the next 10 days (starting October 7), 49 vessels were expected to be loaded—8 percent fewer than the same period last year.
As of October 6, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $61.25. This was relatively unchanged from the previous week. The rate from the Pacific Northwest to Japan was $36.00 per mt, unchanged from the previous week.
Fuel
For the week ending October 10, the U.S. average diesel fuel price increased 38.8 cents from the previous week to $5.224 per gallon, 163.8 cents above the same week last year.
