Rail Tariff Rates for Grain by Shipment Size and Distance Shipped

Abstract

For most commodities examined in this paper, (grain and oilseeds, fertilizer, food products, grain mill products, and soymeal), inflation-adjusted rail rates (in 2011 dollars) increased from 2004 through 2011, although to different extents, depending on shipment characteristics. Shipments of some commodities had consistently higher rail rates, measured in cents per ton-mile, throughout the period. While rail rates for the various shipment sizes fluctuated differently over the period, rates for many of the shipment distances began rising between 2002 and 2004. In general, smaller shipments have noticeably higher rates than large shipments. Likewise, shipments moving longer distances normally have lower rates per ton-mile than shipments moving over shorter distances. However, agricultural commodity movements vary by shipment size and distance traveled. For instance, most grain mill products move in smaller shipments (less than 50 cars), with occasional large shipments. Grain and oilseeds, on the other hand, consistently move in shipments of all sizes and travel a large variety of distances.