Transportation costs are a fact of life that, for most people, begins and ends at the gas station with today’s posted price of gasoline or diesel.
But for farmers, getting agricultural products to market the fastest and at the lowest cost possible is quite a bit more. You might say it requires the luck of a gambler, the timing of a tennis player and, increasingly, a keen understanding of global economics and logistics – and as always, an eye on the weather.
By the time most crops get to the dinner table, they will have been transported by several different modes over a period of hours, days or weeks. Most every agricultural product begins and ends its journey on a truck – some will move via short-line or mainline freight rail service; some will move by river barge; some are destined for ocean-going vessels if exported.
The shipping rule of thumb is that time is money: The lower-value the product, the more likely it is to travel by rail; the highest-value goods are shipped air freight, with trucks taking the next higher-value goods and the bulk of the general shipping market.
While these modes are all different, one thing they share is that they are all powered by diesel engines, so the price of diesel fuel for both on- and off-road uses is a key factor influencing the cost to ship goods.
The good news here is: All new diesel engines are more efficient than ever. New locomotive engines are also more powerful and fuel-efficient, but locomotive engines can be rebuilt a number of times over their long lives, and the overwhelming majority of the rail locomotive fleet is using older-technology diesel engines.
In terms of efficiency measured by time, trucks carry 70 percent of all freight transported in the U.S. and are generally the fastest and most direct means of getting goods to market.
Trucks are not constrained to running just where the rail lines run along with dozens of other shipments. For agricultural products, they are dedicated contract carriers with a single customer in mind and an unlimited road network to make their way to the final destination.
Trucks are getting more efficient as a result of new clean air regulations that reduce emissions of soot (particulate matter) and nitrogen oxides by greater than 95 percent on all trucks made since 2010.
These new-technology diesel engines are about 500 horsepower and make up about 20 percent of all commercial trucks on the road today and, although are costing more, are achieving 3 to 5 percent gain in fuel efficiency.
How they do that is by shifting more emissions reduction burden to the advanced emissions control system and tuning the engine more for fuel economy. For comparison, trains have larger diesel engines – about 4,400 horsepower.
But are trains the most efficient? The relationships between truckers and railroaders has often resembled the iconic feuding Hatfields and McCoys – in constant disagreement about who is best, most reliable, most efficient. That’s changed more in recent times increasingly to one of more cooperation, with many trucking companies establishing intermodal relationships to streamline the shipping process for their customers.
But at the end of the day, there is still a very competitive nature between truck and rail. Nowhere is this more evident than the age-old battle over truck size and weight.
Some trucking groups want the government to allow larger and heavier trucks on the road or longer combination vehicles. Railroads and public interest groups have been successful in opposing these changes over the years, based largely on safety.
On paper, looking at one truck tire and one rail wheel, rail is hard to beat. Asking how much energy it takes to move 1 ton of freight 1 mile yields some interesting answers. A freight train can move a single ton of freight more than 470 miles on a single gallon of diesel fuel. That means you can ship 1 ton from Sioux Falls (South Dakota) to Milwaukee (Wisconsin) and only use 1 gallon of diesel.
How can that be? It’s all about friction. Steel wheels on a steel rail have a friction value of 0.001. Trucks, whose rubber tires contacting pavement friction values are 0.006 to 0.010, have more friction to overcome (i.e., fuel burning) by a full order of magnitude. According to the Association of American Railroads, that means freight rail is four times more fuel-efficient than trucks.
Train efficiency is also enhanced by the close proximity of railcars, reducing overall aerodynamic drag, which is why many truck manufacturers will soon be deploying platooning technology.
This combines safety and speed sensors and telecommunications that would allow two tractor trailers to follow each other very closely at highway speeds, all for the sake of being more aerodynamic and improving efficiency.
Road capacities in the U.S. federal highway system limit tractor trailers to 80,000 pounds gross vehicle weight rating. Some exceptions are made for emergency basis, temporarily allowing heavier trucks up to 120,000 pounds gross vehicle weight rating, and special permit loads can go well beyond that.
These road weight limits, along with a patchwork of state and sometimes local requirements, generally make it impossible for trucks to be more competitive with rail through larger or heavier vehicles, so they must work to beat rail on service and efficiency.
For many shipments of goods, the nation’s rail network is not door-to-door service, requiring that at some point the shipments be transferred to truck to be loaded on and off the rail to reach their final destinations, adding additional transport costs for that truck leg as well.
And agricultural products are not the only product vying for rail car space. In recent years, farm commodities have been competing more with crude oil than coal as railroads seek to make up declining car loadings for coal as more power plants switch to natural gas.
This has created delays and logjams at freight car loading and staging facilities and has driven farm goods transport costs up and driven rail service’s reliability down in recent years, all coinciding with peak crop production nonetheless, making shifting more grain and corn shipments to trucks a no-brainer and, in some cases, the only option.
Some of this railcar competition is reflected in recent reports looking at all grain movements (import/export and domestic) from 1998 to 2013. Here, rail’s share has declined from 33 to 24 percent, while barge has declined from 17 to 12 percent.
Truck share, on the other hand, has grown from 50 to 64 percent. Just looking at domestic movements, rail share has fallen from 31 percent to 21, barge share has dropped from 2 to just 1 percent, and truck share has risen from 67 to 78 percent.
The weekly U.S. Department of Transportation Grain Transportation report provides regular insights into what’s moving by top commodities and by weight and value.
More grain is moving by rail and barge alike than in previous years. U.S. Class I railroads originated 22,325 grain carloads for the week ending March 5, up 4 percent from the previous week, up 7 percent from last year and up 13 percent from the three-year average.
Moving by barge, for the week ending March 12, barge grain movements totaled 489,350 tons, 12 percent higher than the previous week and up 35 percent from the same period last year. For the week ending March 12, 301 grain barges moved down river, up 13 percent from the previous week; 530 grain barges were unloaded in New Orleans, down 33 percent from the previous week.
Efficiency is improving all around. According to the latest data available from the U.S. Department of Transportation, on a British thermal unit basis, trucks have reduced their energy consumption by about 4.5 percent from 1980 to 2006; Class I rail reduced its consumption by 44.7 percent during the same period.
We expect that, factoring in the new technology engine acquisitions since 2010, the truck fuel consumption reduction should easily be in double digits as of 2015.
And with diesel fuel prices hovering right around $2 a gallon nationwide, average fuel costs are about half the cost and are projected to stay relatively lower compared to previous years.
That should be good news for moving goods by any mode, and should lower at least one part of the transportation costs for everyone. Time is money and fuel is money, by whatever means the haul is being made. PD
ILLUSTRATION: By the time most crops get to the dinner table, they will have been transported by several different modes over a period of hours, days or weeks. Illustration by Corey Lewis.
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Allen Schaeffer
- Diesel Technology Forum
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