Milling & Baking News - June 14, 2011 - 26

Transportation and Distribution 
Cost of shipping corn from Minneapolis
per tonnes America’s 1.6 million rail cars are owned by leasing companies. Trucks take brunt of high fuel prices Unlike railroads, truckers do not have a fuel surcharge “system” but rather apply fuel surcharges on a company-by-company or even individual operator basis, which makes for a wide variation. But diesel prices also have by far the greatest impact on trucks, which moved an estimated 67% of all U.S. tonnage in 2010, because of the small loads hauled compared with rail or barge. Each 1c per gallon increase in retail diesel fuel costs the trucking industry $356 million a year, Bill Graves, president and chief executive officer of the A.T.A., told Congress earlier this year when diesel prices had not yet peaked and were below current levels. The American Trucking Associations’ latest monthly Truck Tonnage Index declined in April but remained well above year-ago levels. The seasonally adjusted index was 114.9 (2000=100) To Japan through the U.S. Gulf Per cent 4Q 2010 1Q 2011 change $8.94 $11.34 26.85% $41.85 $35.94 -14.12% $56.35 $54.79 -2.77% $107.14 $102.07 -4.73% To Japan through the U.S. PNW Per cent 4Q 2010 1Q 2011 change $8.94 $11.34 26.85% $47.94 $48.33 0.81% $31.34 $31.92 1.85% $88.22 $91.59 3.82%

Truck Barge Ocean Total

Source: U.S. Department of Agriculture

association’s survey showed turnover for linehaul drivers at large fleets bottomed at a record low 39% in the first quarter of 2010 but rebounded to 69% in the fourth quarter, the highest since the second quarter of 2008. “Fleets are clearly hiring more drivers as demand for freight hauling increases,” Mr. Costello said. He also noted rising demand for drivers will heighten the industry’s ongoing struggle with driver shortages. But the impact of high fuel prices cannot be stressed enough, according to the A.T.A., which said more trucking companies, often small or independent operators, tend to go out of business during times of high fuel prices because the increases are not always able to be passed on. The cost of about $1,200 to fill the fuel tanks of a semi-tractor trailer rig, which averages five or so miles per gallon, is especially burdensome on independent truckers. Barge trafﬁc declining In addition to higher fuel costs this spring, barge and ocean shippers also had to contend with record high water levels and intermittent closures on the Mississippi river, which is the largest conduit for U.S. grain and oilseed exports. Current flooding on the Missouri river is expected to have minimal effect since little grain is shipped by barge on that river. But once the high waters of the Missouri reach St. Louis and the Mississippi river, an impact may be felt, one merchandiser said. “Since mid-April, when flooding closed sections of the upper Mississippi river and slowed barge movements on the lower Mississippi river, barge rates have risen about 17% for grain shipped from St. Louis to New Orleans,” the U.S.D.A. said in its June 2 Grain Transportation

in April, down 1.7% from March but up 4.8% from April 2010. In March the index was 115.6, up 1.9% from February and up 6.5% from last year. “The drop in April is not a concern,” Mr. Costello said. “Since freight volumes are so volatile truck tonnage is unlikely to grow every month. I expect economic activity, and with it truck freight levels, to grow at a moderate pace in the coming months and quarters.” In its quarterly trucking activity report, the A.T.A. said both hiring and turnover rate for linehaul truckload drivers increased in the fourth quarter of 2010, indicating increased demand as the economy recovers. The
26 / June 14, 2011 Milling & Baking News

Report. “Rates did increase this week at the same time as New Orleans corn bids strengthened, indicating more supplies of grain are needed at the port because of delayed barge movements.” St. Louis barge shipment rates increased to about $13.97 per ton the week ended May 31, up from $13.21 a week earlier and up 34% from $10.43 a year ago, the U.S.D.A. said. Although export shipments for the three major commodities (wheat, corn, soybeans) at 1.74 million tonnes in the week ended May 28 were up 13.4% from the same week a year earlier, movement by barge for the week was 682,570 tons, down 9% from a week earlier and down 24% from a year ago, according to U.S.D.A. data. Barge shipments in the four weeks ended May 28 were down 33% from the same period in 2010. Grain loading for export also had slowed with 33 ocean going vessels loading at the Gulf the week ended May 26, down 23% from a year earlier, the U.S.D.A. said. Also lingering as a threat was the forecast for an active tropical storm season (June 1 to November 1) in the Atlantic region, which includes the Gulf and its offshore rigs and onshore refineries. The National Oceanic and Atmospheric Administration forecast an “above average” number of named storms this season. While the forecast called for slightly fewer storms than in 2010, when no named hurricanes hit the U.S. mainland, the odds of such good fortune were unlikely two consecutive years. Not only could a major hurricane disrupt shipping activity in the Gulf, but it also could affect oil refinery operations, which tend to cause a temporary spike in crude oil and product prices. Adrian, the first named storm of the season, formed last week in the Pacific off Mexico’s west coast, but did not pose a threat to Gulf shipping or refinery operations. MBN
— Ron Sterk
bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - June 14, 2011

Table of Contents for the Digital Edition of Milling & Baking News - June 14, 2011