1 / 21

GRAIN LOGISTICS

GRAIN LOGISTICS. September 17,2002. INTRODUCTION. Grain transportation is changing for many reasons consolidation of railroad industry and branch line abandonment--from comprehensive web to connecting major shipping nodes

laurel
Télécharger la présentation

GRAIN LOGISTICS

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. GRAIN LOGISTICS September 17,2002

  2. INTRODUCTION • Grain transportation is changing for many reasons • consolidation of railroad industry and branch line abandonment--from comprehensive web to connecting major shipping nodes • more farmers have tractor-trailer (semi) truck with which to haul their grain and can and will transport longer distances when profitable • more grain used off-farm, but also more grain consumed within the larger region • Decline in grain exports

  3. Railroad Efficiency Drive • Changes from 1980 to 1996 • employment from 532,000 to 256,000  48%) • trackage: from 179,000 to 147,000 miles 82% • freight cars: from 1.7 million to 1.2 million 70% • locomotives: from 28,000 to 19,000  68% • output: from 22.2 to 24.2 million cars  109% • intermodal units: from 3.1 to 8.2 million cars  264% • revenue ton miles: from 919 to 1,356 billion ton miles  148%

  4. How did Railroads  ton-miles? • Handle shipments over longer distances • at greater velocity • fewer node to service • result of economics • motor carriers more economical for small traffic areas

  5. Efficiency gains • Revenue-per-ton-mile  • Loss and damage claims  • result of better track and equipment--maintenance on this smaller system.

  6. Downside • System pretty much at capacity--no excess capacity • Capacity highly sensitive to slight downturn in velocity—e.g. situation after UP SP merger • Today’s rail system is less compatible with traditional grain movement methods • seasonality of grain movement • year-to-year variability in grain volume to be moved depending on crop size and export demand

  7. Railroads profit driven (as any business) •  Rate of return on assets •  Asset utilization • RRs promoting arrangements that contribute to higher profitability, e.g., • shuttle trains • discourage co-loading • COTS/PERX to ration cars • High value shipments receive higher priority

  8. From Transportation to Logistics • Substitute cheaper information for more costly physical assets • Adoption information technology--EDI • More emphasis on continuous flow, less on seasonal • less transactional and more relationship oriented • trust relationships • Dakota desk • Advance notice of arrival of train

  9. Implications for Grain Marketing • Less rail transportation on demand • Long-term arrangements for large shipments, long distances (pool) • between shipper and carrier • more advanced planning of grain movement • New farm marketing plans may emerge

  10. Shipper concerns • Demanding higher railroad responsibility • BNSF’s Dakota desk is an outcome • Negotiation on co-loading

  11. NGFA-Rail Industry Agreement1998- OCT 2002

  12. NGFA-Rail Industry Agreement(1998- OCT 2002) Arbitration areas General car distribution rules that govern “regular tariff” service Special car-ordering and or equipment rules Rental rates and liability terms of railroad land leased to an agricultural facility http://www.ngfa.org/

  13. Subjects to arbitrationcontinued • Demurrage rules or terms • Misrouting of loaded cars or locomotives • Loss and damage and bill of lading claims • Transportation contracts • Mishandling of private cars or locomotives

  14. “Optimal” Feedgrain Movementon the High Plains, 1998 Based on Least Cost Transportation Network Modeling

  15. Grain transportation on the High Plains • Railroad companies operating on the High Plains • Union Pacific • Burlington Northern Santa Fe • Trucking

  16. Feedgrain Movement Oct-Dec

  17. Feedgrain Movement Jan-Mar

  18. Feedgrain Movement Apr-Jun

  19. Feedgrain Movement Jul-Sep

  20. Applicability of Model • While this is based on least Transportation cost it is consistent with arbitrage opportunities, i.e., basis differentials among locations.

  21. Summary and Implications • Kansas feed grains heavily trucked • look for new grain marketing plans and opportunities (these plans may be more complex and more difficult to evaluate)

More Related