By TIM ALEXANDER
Illinois Correspondent

ANKENY, Iowa — Whether infrastructure upgrade costs would be recovered by the increased efficiency of heavier, longer and faster freight trains is key to whether increasing the mass and speed of railcars and locomotives would cut shipping costs for grain and other agricultural products moved by rail, according to Mike Steenhoek.

The question was posed to Steenhoek, executive director of the Soy Transportation Coalition (STC), following a recent rail industry “webinar” hosted by Milwaukee-based Progressive Railroading. It examined the feasibility of an industry-wide conversion to heavier and longer trains in order to bolster profits and meet demand (see the Aug. 11 Farm World for the original article).

“The rail industry is certainly trending toward heavier, longer and faster trains. Overall, this can be of benefit to agriculture and other shippers. It’s important, though, that shippers and other affected parties are provided sufficient notice when transitioning to this environment,” Steenhoek responded.

“For example, grain and oilseeds are increasingly hauled in ‘5750’ rail cars versus ‘4750’ rail cars. 5750 cars can haul 286,000 pounds, or 3,666 bushels. 4750 cars can haul 268,000 pounds, or 3,330 bushels. This obviously provides greater capacity, but there is a greater cost – in fuel and in infrastructure – in transitioning to heavier cars.”

As suggested by TTCI’s Al Reinschmidt during the webinar, thorough infrastructure studies must be completed before railroads can increase their payloads.

“Many shoreline railroads are not equipped to handle 5750 cars over their tracks. Before a corridor is upgraded to handle 5750 cars, one must do a cost benefit analysis to determine if the infrastructure upgrade costs will be recovered by the increased efficiency of the heavier cars,” said Steenhoek.

With an increase in infrastructure costs for railroads comes a proportionate increase in facility upgrades for grain elevators, he added. “It’s a similar story with longer trains. Over the past 10 to 15 years, many elevators have assumed significant expense in order to load the longer trains the rail companies are promoting,” he said.

“Having 110-car unit trains is a very efficient movement, but being able to receive, load and deploy them will cost an elevator or processor a lot of money,” Steenhoek cautioned.

”Rail companies are increasingly adopting a business model predicated on more limited points of origin, limited points of destination and longer trains. That makes the actual rail haul of ag products more efficient, but it also results in more truck hauls of grain and oilseeds in order to access a rail-loading facility.

“Years ago, there was rail service at every elevator 20 to 30 miles apart. That’s not the case today. Therefore, some of the efficiency gains and cost savings due to longer trains is mitigated by the cost of trucking grain and oilseeds to the rail-loading facility,” he concluded.