Railcar shortage sends freight costs to record highs
USDA’s Agricultural Marketing Service (AMS) says non-shuttle bids per covered hopper car nearly doubled in the past week, to $908 above tariff versus $492 above tariff the week before and no surcharge at all above tariff a year ago!
Multi-car shuttle train rates are even higher. These were $1,696 above tariff; up $596 from just a week ago and an astounding $1,938 higher than a year ago!
The prices reflect a railcar shortage, and if a company wants rail cars for shipping then they are going to pay a premium. But what’s behind the railcar shortage?
The Burlington Northern and Sante Fe (BNSF) reportedly is saying average train speeds are down due to upgrading of track to handle more capacity in the future, and that a huge crop in both the U.S. and Canada has strained railcar availabilities.
Officials in Canada report that despite record deliveries of empty railcars to terminals, demand is twice the supply for both the Canadian Pacific and Canadian National rail lines and empty ships are backing up in Pacific ports. This indicates especially strong export demand for Canadian commodities.
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