Sunday, May 2, 2010

US Freight Transport Study Into Multi Modal Rural Freight Movements Released

Agricultural and Bulk Transport Methods Under the Microscope
Shipping News Feature

US - The findings of a study released last week make interesting reading for anyone concerned with supply chain efficiency in the field of bulk carriage of products, particularly perishables. The report, commissioned in 2008 by Congress, reviews transportation and its effect on rural communities, with an emphasis on agricultural requirements. It looks in depth into each of the four major modes of transportation commonly used by agriculture in the United States: trucking, railroads, barges, and ocean vessels, examining each in the light of its ability to meet rural America’s transportation needs now and in the future. It identifies some broad matters that merit attention from policy makers and was ordered in response to Section 6206 of the Food, Conservation, and Energy Act of 2008 (PL 110-246), which directs the Secretaries of Agriculture and Transportation jointly to conduct a study of rural transportation issues.

The decline of rail freight, generally accepted as the cheapest option for many of the case studies, is explored in some depth and charts reasons for the downturn including capacity restraints, infrastructure changes and changing route priorities. The American Trucking Associations (ATA) this week took the view that the study shows trucks to provide America’s agriculture producers with the best service for transporting time-sensitive products from supplier to farm and farm to market. Trucking is of course involved at some stage in virtually every movement and indeed accounts for over 83% of the total transportation costs for freight in the US but the report concludes the method is self regulating, with so many different companies vying to provide services at competitive rates.

Russell Laird, Executive Director of the ATA’s Agricultural & Food Transporters Conference commented, “The USDA study provides the first holistic examination of agricultural transportation and highlights the essentiality of trucking to our modern agricultural production system.”

The study itself blames railroad policies for an increase in transport costs and wear and tear to the country’s highway system. It states that many shippers have concluded that, in a successful bid to increase their own efficiency, and presumably long term profitability, rail freight carriers have paid less heed to the needs of their customers, a penalty also of reduced inter rail competition.

Waterborne freight is studied in even greater depth charting both the history of US commercial barge traffic whilst explaining how the surplus and shortage of suitable available vessels affects the viability of the method with regard to tonnage costs. A microcosm in fact of what we have seen happening with deep sea container and bulk carrier markets world wide recently in terms of overcapacity. Unlike their deep sea cousins however the past few years have seen many inland barges retire after reaching the end of their useful lives and this has caused a rise in freight rates for goods such as coal and bulk grains which form the normal consignment profiles for the method.

The review of agricultural product via ocean freight takes up a further 59 pages of the report which also covers multi modal issues for the industry. All in all this is a worthwhile read for any industry professional wishing to increase or bolster this sector of the US transport industry, even those unconnected directly with the agricultural market.