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Crops Transportation Industry Analysis

Transportation is vital to the flow and cost of goods domestically and internationally. It is the backbone of domestic and global growth. Infrastructure plays a key role in transportation cost. Supply chains give companies and countries competitive advantages to deliver foods and goods to the masses.

Key facts about the crops transportation market
  • The US trucking industry is $796.7 billion in gross freight revenues (primary shipments only), representing 80.3% of the US nation’s freight bill in 2018. 1.49 billion tons of freight (primary shipments only) transported by trucks in 2018, representing 71.4% of total domestic tonnage shipped.
  • Together, freight railroads operating in the US form an integrated, nearly 140,000-mile system that earned close to $74 billion in revenue in 2017 and that provides the world’s safest, most productive, and lowest-cost freight rail service.
  • Barge transportation comprises an extensive network, ideal for carrying seaborne cargo to inland destinations and exports alike. Responsible, in part, for the worldwide trade of bulk transport, the industry is of great significance to the agricultural sector. In North America, the Army Corps of Engineers maintains and operates over 12,000 miles of canals, rivers, and inland waterways. The Illinois Waterway and Mississippi River are the major waterways in the region that are responsible for moving agricultural and farm products through barges.
  • The extensive use of inland waterways by various farm belts for the transportation of agricultural chemicals and farm products will further propel the demand and growth of transportation.

Key themes affecting the crops transportation market

Barge grain traffic in 2020 continues its normal, seasonal pattern. Although barge traffic is transiting the typical seasonal lull, volume generally has been in line with the cumulative five-year average. Barge rates have rolled over to multi-year lows as navigation has been less efficient with winter weather, ice, fog and highwater conditions. Secondary rail rates are dormant with rail carload capacity abundant. With the signing of the US-China Phase One trade deal, the anticipated demand catalyst for soybeans, corn and wheat is now real. China is forecast to continue expanding its counter-seasonal purchases of US soybeans during the second half of the 2019/20 marketing year with a significant increase in US soybean exports to China. There is ample capacity in the current supply chain network in the US (barge, rail, truck, containers and ports) to support this increase in exports. However, it would comeat a price (higher transportation costs) and there would need to be a window for staging assets (re-positioning railcars, barges, etc.).

US Barge Freight rates and Grain Movements by state
Barge Freight rates$ per tonGrain Movements(1,000 tons)
Illinois$14.24Arkansas25
Ohio$8.48Mississippi221
Memphis/Cairo$7.92Ohio203
St. Louis$7.66total449

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