By TIM ALEXANDER
Illinois Correspondent

WASHINGTON, D.C. — At a major ag transportation symposium hosted by the National Grain and Feed Assoc. (NGFA) in Kansas City, Mo., May 12-13, NGFA President Kendell W. Keith said speakers addressed issues ranging from challenges in shipping options concerning barge, rail and ocean-going vessel transport of agricultural products, to the future of public policy and transportation infrastructure.

“The symposium was directed at all forms of transportation for agriculture, although it was focused mostly on rail and waterways and ocean-going freight issues,” Keith said, reflecting on the conference.

“It was encouraging to me that you have producer groups that are actively looking at transportation issues. They are starting to realize they have a serious economic interest in transportation.”
He outlined major topics discussed in the symposium, including the structure of the private railcar marketplace.

“It’s a little depressing on the railcar front because there are probably 460,000 railcars that are parked today, out of about 1.7 million total in the U.S.-North American system,” he said. “Virtually all of the traffic right now has fallen off. On average, across the industry the volumes year over year are about 20 percent off.”
Panelists Jeff Lytle, senior vice president of CIT Rail in Chicago, Roger Wynkoop, chief commercial officer of Trinity Railcar in Dallas, and Darrell Wallace, president of the North American Freight Car Assoc., served as panelists for the discussion on issues confronting private railcars. Keith said they reported that slumping auto sales and coal deliveries have depressed the industry, while grain transportation was down only slightly.

“One of the more interesting topics covered was ocean freight,” a topic covered by Peter Sandler, director of ocean freight strategy and business development for the Louis Dreyfus Corp., Keith said. “Three years ago it cost around $180,000 per day to lease a standard ship to haul bulk freight, and the freight rate for that has now dropped below $10,000.”

Keith added as global economic conditions improve, freight rates will rise accordingly.

Dispute resolution forums concerning rail shipping were held during the NFGA’s transportation symposium. Formal and informal dispute resolution options through the U.S. Surface Transportation Board (STB) and an NFGA-endorsed alternative dispute resolution program were hot topics.

“The farmer pays the price for freight costs, ultimately, through the price of grain,” Keith said. “NFGA has (endorsed) a system for rail arbitration for about 10 years now. If a farmer thinks they’re paying too much for freight, they can go to their producer organizations and they would evaluate the claim for merit. The producer organization decides whether or not to take it forward for arbitration.”

Rick Calhoun, president of Cargo Carriers of Minneapolis, and John LaRandeau, manager of the Inland Navigation Program at the U.S. Army Corps of Engineers in Omaha, led a panel discussing the outlook for the barge industry and inland waterways system. Keith expressed frustration at delays in moving forward with lock-and-dam improvements on the upper Mississippi and Illinois rivers, as reflected in the speakers’ statements.

“We’re not making a lot of encouraging progress yet. We’ve got some projects authorized finally, but we’ve still got to get them funded. And the funding levels right now are really kind of disappointing,” he said.

The NFGA president was most encouraged by the statements of Frank Mulvey, acting STB chairman, who addressed the agency’s priorities in addressing rail and transportation infrastructure policy issues. Mulvey was asked by panelists what his priorities concerning agriculture transportation would be in the next three years.

“He wants to reevaluate and reformulate the uniform rail costing system, which hasn’t been looked at in a long, long time,” Keith said. “If costs are not regularly evaluated then someone is not going to get a fair deal. I was encouraged (Mulvey) understands the importance.”

Around 150 NFGA members and industry stakeholders attended the symposium, Keith said.