An Update on the Health of the Soy Transportation Supply Chain

By Tom Hance

Soybeans from farms in Ohio and across soybean country are transported to end customers through an extensive network of trucks, trains, barges, and ships. While the U.S. has not made substantial investments in much of our transportation infrastructure for decades, overall it is still the most efficient in the world and provides a competitive advantage for U.S. farmers. However, that advantage may be slipping as other countries are investing in their infrastructure and closing the gap. Meanwhile, much of the U.S. transportation infrastructure is ageing or insufficient and investments are constrained by funding shortages, increasing costs, regulatory burdens, and political gridlock. Here’s a brief look at the status of the soybean supply chain, including highway, rail, and waterways issues.

Rail

Rail congestion and freight car availability continues to be an issue, less in Ohio, but more in the northern and western growing regions of the Dakotas and Minnesota. While the U.S. railroads are privately owned and operated and companies such as BNSF have pledged to invest billions over the next few years to expand capacity, the soybean industry continues to communicate to Congress and the Surface Transportation Board (STB) on the impact that service disruptions are having on soybean farmers. American Soybean Association (ASA) Directors from Minnesota and North Dakota have testified before the STB several times on the issue of rail service, and in early October, the STB announced that it will require expanded reporting of rail service metrics on a weekly basis – including for the first time for nonagricultural products – and extend the reporting requirement to all Class I railroads. Additionally, ASA supports a bipartisan Senate bill that would reauthorize the STB, give them the authority to initiate investigations, establish an arbitration process for rail disputes, and establish firm timeframes for rail rate disputes to be considered.

Waterways

Following successful enactment of the Water Resources Reform & Development Act (WRRDA) earlier this year, ASA is now actively working on implementation of priority waterways infrastructure programs and the policies that were included in the WRRDA. ASA has submitted comments to the U.S. Army Corps of Engineers and led a coalition of farm groups in a letter to the White House urging funding in fiscal year 2015 and in the fiscal year 2016 budget for the Navigation Ecosystem Sustainability Program (NESP) on the Upper Mississippi River System. A funded NESP will allow the Corps to undertake navigation efficiency improvements and upgrades to locks, including design and construction of new and larger locks on the Upper Mississippi River System.

Highways

Reauthorization of the Surface Transportation bill (also known as the highway bill) will be on the Congressional agenda in 2015, and ASA continues to advocate for provisions to increase truck weight limits on interstates to 97,000 lbs. with the addition of a sixth axle. This will enable farmers in Ohio and nationwide to move more grain per truckload without sacrificing on-road safety. Congress temporarily extended the current surface transportation programs and work will not resume on a new bill until the next Congress.

As you can see, there are plenty of transportation issues that need attention and input from Ohio’s soybean farmers will be essential to ensuring that policymakers recognize the importance of investing to maintain a long-held competitive advantage in the global market.

Tom Hance is a Washington Representative for the American Soybean Association. Hance focuses on energy, transportation and climate policy.

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