Posted on May, 7, 2025 at 02:19 am
In a significant move to bolster transparency and support informed decision-making within the grain industry, the U.S. Department of Agriculture's Agricultural Marketing Service (AMS) has implemented a comprehensive update to its Grain Transportation Report (GTR). Effective May 1, 2025, this update nearly doubles the number of published rail tariff rates for corn, soybeans, and wheat, expanding from 38 to 70 origin-destination-railroad combinations.
Enhancing Stakeholder Decision-Making
Rail tariff rates, encompassing base freight charges, fuel surcharges, and secondary freight costs, are pivotal in determining the total cost of shipping grain by rail. The enhanced dataset provides stakeholders—including farmers, shippers, and grain receivers—with detailed insights into these costs, facilitating more informed decisions regarding shipment timing, destinations, and volumes.
"Available, accurate data on rail tariff rates for grain shipments fulfill a crucial need," the AMS stated in the May 1 GTR. "The information helps farmers, shippers, receivers, and other stakeholders to understand their costs and make decisions on where, when, and how much to ship."
Regional Variations and Market Dynamics
The updated GTR highlights regional differences in grain transportation practices. Western Class I railroads—such as BNSF Railway, Union Pacific Railroad, and Canadian Pacific Kansas City—primarily utilize tariff rates for domestic grain movements. In contrast, eastern railroads like Canadian National Railway, CSX Transportation, and Norfolk Southern Railway more commonly employ contract rates, especially for shipments to grain receivers like livestock companies.
The report also underscores the impact of competition on shipping rates. For instance, in eastern Washington, rail rates closely align with barge shipment costs along the Columbia-Snake River System, reflecting competitive pressures in that corridor.
Detailed Tariff Rates Across Commodities
The expanded GTR includes 31 rates for wheat shipments, 24 for corn, and 15 for soybeans, offering a more granular view of the grain transportation landscape. These rates are presented in GTR tables 6 and 7, detailing tariff rates, applicable fuel surcharges, and total freight rates on a per-bushel and per-metric-ton basis. For example, the tariff rate for shipping wheat from Wichita, Kansas, to Los Angeles, California, is listed at $7,020 per car, with an additional fuel surcharge of $107, totaling $70.78 per metric ton or $1.93 per bushel.
Implications for the Grain Industry
The USDA's expansion of the GTR's rail tariff data is poised to enhance market transparency and efficiency in the grain industry. By providing a more comprehensive view of transportation costs, the report aims to support stakeholders in making strategic decisions that optimize supply chain operations and competitiveness.
The full dataset, including additional routes, calculations, and shipment characteristics, is accessible through the USDA's AgTransport platform. Stakeholders are encouraged to utilize this resource to gain deeper insights into grain transportation costs and market dynamics.
Source: Grain JournaL