Contents
xv 

Contents 

Preface ............................................................................................................................................. i

Acknowledgements ..................................................................................................................... ii

Chapter Authors and Other Contributors .................................................................................. iii

Executive Summary .......................................................................................................................... v

Transportation Issues Affecting Agricultural Shippers ............................................................... v

Transportation Supports Rural America .................................................................................... vi

Transporting Biofuels ................................................................................................................ vii

Transporting Coal ...................................................................................................................... vii

Rail Competition and Agriculture ............................................................................................. viii

Rail Rates .................................................................................................................................... ix

Rail Service ................................................................................................................................. ix

Rail Capacity ................................................................................................................................ x

Rail Investment ........................................................................................................................... x

Rail Rate Relief ........................................................................................................................... xi

Barge Transportation ................................................................................................................. xi

Truck Transportation ................................................................................................................. xii

Ocean Transportation .............................................................................................................. xiii

Multimodal Issues .................................................................................................................... xiii

Contents ......................................................................................................................................... xv

Figures ............................................................................................................................................ xx

Tables ......................................................................................................................................... xxvii

Chapter 1: Introduction and Overview ........................................................................................... 1

Agriculture Requires Transportation ......................................................................................... 1

Agriculture, Trade, and the Economy ........................................................................................ 3

Railroads ..................................................................................................................................... 4

Barge Transportation ................................................................................................................. 8

Ocean Transportation .............................................................................................................. 11

Truck Transportation ................................................................................................................ 15

Conclusions .............................................................................................................................. 18

Chapter 2: The Importance of Freight Transportation to Agriculture .......................................... 19

How Agriculture Uses Transportation ..................................................................................... 20

Relative Modal Importance ..................................................................................................... 22

Moving Agricultural Commodities to Market .......................................................................... 27

Grains and Oilseeds Profile ...................................................................................................... 27

Corn Profile .............................................................................................................................. 34

Soybean Profile ........................................................................................................................ 40

Wheat Profile ........................................................................................................................... 44

Rice Profile ............................................................................................................................... 49

Livestock and Livestock Products Profile ................................................................................. 54

Meat and Poultry Exports Outlook .......................................................................................... 60

Cattle and Beef Profile ............................................................................................................. 63
xvi 

Hogs and Pork Profile ............................................................................................................... 67

Poultry Profile .......................................................................................................................... 70

Dairy Profile .............................................................................................................................. 73

Fruit and Vegetables Profile ..................................................................................................... 79

Apple, Lettuce, and Potato Profiles ......................................................................................... 89

Apple Profile ............................................................................................................................. 90

Lettuce Profile .......................................................................................................................... 92

Potato Profile ........................................................................................................................... 95

Trends in Fruit and Vegetable Consumption ........................................................................... 98

Fertilizer Profile ...................................................................................................................... 102

Conclusions ............................................................................................................................ 113

Chapter 3: How Freight Transportation Supports Rural America .............................................. 115

Rural America ......................................................................................................................... 116

Rural Vitality ........................................................................................................................... 122

Rural Manufacturing .............................................................................................................. 123

Conclusions ............................................................................................................................ 129

Appendix 3-1 .......................................................................................................................... 130

Chapter 4: Biofuels Transportation ............................................................................................ 131

The Current Distribution System ........................................................................................... 132

EPA’s Biofuel Distribution Analysis ........................................................................................ 138

Ethanol and Co-product Transportation ................................................................................ 142

Potential Phases of Biofuels Expansion from the Transportation Demand Perspective ....... 147

Market Uncertainty and its Implications for Infrastructure Investment ............................... 148

Conclusions ............................................................................................................................ 151

Chapter 5: Coal Transportation .................................................................................................. 153

Production .............................................................................................................................. 155

Demand and Utilization ......................................................................................................... 160

Transportation Flows ............................................................................................................. 170

Rail Rates ................................................................................................................................ 173

Service .................................................................................................................................... 177

Paper Barriers......................................................................................................................... 184

Bottleneck Rates .................................................................................................................... 186

Recent Decision by STB in Favor of Coal Shippers ................................................................. 189

Conclusions ............................................................................................................................ 189

Chapter 6: Rail Competition and its Importance to Agriculture ................................................. 191

U.S. Agriculture Depends on Rail Transportation .................................................................. 191

Government Promotion and Regulation of Railroads ........................................................... 193

Rail Competition in an Era of Deregulation ........................................................................... 197

Rail-to-Rail Competition ......................................................................................................... 203

Geographic and Product Competition ................................................................................... 205

Railroad Concentration and Market Shares ........................................................................... 210

Inverse Herfindahl-Hirschman Analysis of Rail-to-Rail Competition ..................................... 213

Comparison of Rail-to-Rail Competition and Distance-to-Water Transportation by State .. 225

Conclusions ............................................................................................................................ 230
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Appendix 6-1: Maps of Inverse Herfindahl Index for Rail Shipments .................................... 232

Appendix 6-2: HHIs and R/VCs for Commodity Groups Analyzed by Number of CRD .......... 237

Appendix 6-3: Waybill Calculation Methodology .................................................................. 238

Chapter 7: Rail Rates ................................................................................................................... 239

Importance of Reasonable Rail Rates .................................................................................... 239

Rates and Railroad Deregulation ........................................................................................... 241

Recent Rail Rate Levels .......................................................................................................... 243

Railroad Revenue Adequacy .................................................................................................. 261

Bottleneck Rates and Rules .................................................................................................... 269

Conclusions ............................................................................................................................ 271

Appendix 7-1: Rail Revenues for Agricultural Products ......................................................... 273

Chapter 8: Rail Service Performance .......................................................................................... 277

Concerns from the Agricultural Industry ............................................................................... 279

On-time Delivery .................................................................................................................... 281

Lane Closures ......................................................................................................................... 288

Effects of Increased Shuttle-Train Movements ..................................................................... 288

The Shift to Larger Railcars .................................................................................................... 291

Rail Line Abandonment .......................................................................................................... 293

Paper Barriers......................................................................................................................... 294

Consumer Complaints ............................................................................................................ 299

Conclusions ............................................................................................................................ 302

Chapter 9: Rail Capacity .............................................................................................................. 305

Demand and Transportation Capacity ................................................................................... 306

Agricultural Demand and System Usage ................................................................................ 309

Factors Influencing Rail Performance .................................................................................... 310

Train Speed ............................................................................................................................ 311

Dwell Times in Terminals ....................................................................................................... 320

Miles of Track ......................................................................................................................... 325

Analysis of Rail Equipment Statistics ..................................................................................... 327

Conclusions ............................................................................................................................ 332

Chapter 10: Rail Investment ....................................................................................................... 333

Demand for Rail Freight Movements ..................................................................................... 334

Railroad Investments and Service .......................................................................................... 339

Investment Needs .................................................................................................................. 344

Investment Sources ................................................................................................................ 345

Conclusions ............................................................................................................................ 348

Chapter 11: Rail Rate Relief Processes for Shippers .................................................................. 351

Regulating Railroads .............................................................................................................. 351

STB’s Rate Regulation ............................................................................................................ 354

Rate Reasonableness Complaints—Finding Market Dominance .......................................... 356

Types of Cases ........................................................................................................................ 356

Standard Guidelines for Assessing Rate Reasonableness— Coal Rate Guidelines ................ 357

New Simplified Guidelines for Assessing Reasonableness—Non-Coal Rate Guidelines ....... 360

Conclusions ............................................................................................................................ 366
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Chapter 12: Barge Transportation .............................................................................................. 369

Barge Traffic ........................................................................................................................... 371

Today’s Barge Industry ........................................................................................................... 373

U.S. Grain and Tank Barge Fleet ............................................................................................ 374

Barge Rates ............................................................................................................................ 376

Condition of the Nation’s Inland Waterways ........................................................................ 383

Environmental and Economic Uses of the Missouri River ..................................................... 391

The Columbia-Snake River System ......................................................................................... 394

Inland Waterways Funding .................................................................................................... 397

Conclusions ............................................................................................................................ 401

Appendix 12-1 ........................................................................................................................ 402

Chapter 13: Truck Transportation............................................................................................... 403

Importance of Trucking to Agriculture .................................................................................. 403

Trucking Capacity and Service ............................................................................................... 406

Issues Affecting Capacity of the Roads .................................................................................. 420

Economic Regulation and Rates ............................................................................................. 424

Conclusions ............................................................................................................................ 432

Appendix 13-1: Commercial Motor Vehicle Definitions ........................................................ 434

Appendix 13-2: Commercial Drivers’ License Classifications ................................................. 435

Appendix 13-3: Excerpts from the Surface Transportation Authorization Act of 2009 ........ 436

Chapter 14: Ocean Transportation ............................................................................................. 439

Today’s Ocean Transportation Industry ................................................................................ 439

Characteristics of the Ocean Shipping Industry ..................................................................... 441

Bulk Shipping .......................................................................................................................... 442

Container Shipping ................................................................................................................. 447

Government Oversight ........................................................................................................... 451

Intermodal Facilities ............................................................................................................... 454

Transload Facilities ................................................................................................................. 455

Containerized Transportation of Agricultural Products ......................................................... 456

Ocean Ports ............................................................................................................................ 459

Importance of Ocean Ports to Agricultural Movements ....................................................... 459

Port Capacity Constraints ....................................................................................................... 467

Rates, Competition, and Service ............................................................................................ 476

Foreign Trade Regulations ..................................................................................................... 484

Conclusions ............................................................................................................................ 486

Appendix 14-1: FMC Complaint Resolution Process .............................................................. 488

Appendix 14-2: Port Expansion Plans .................................................................................... 491

Appendix 14-3: Foreign Trade Regulations: Carrier Responsibility ....................................... 495

Chapter 15: Multimodal Issues ................................................................................................... 497

Freight Transportation Modes and Multimodal Issues ......................................................... 497

Freight Rates and Fuel Costs Help Determine Transportation Choices ................................. 499

Transportation Capacity and Service ..................................................................................... 505

Investment and Funding ........................................................................................................ 509

Transportation Issues Affecting Agricultural Shippers .......................................................... 516
xix 

Conclusions ............................................................................................................................ 522

Abbreviations .............................................................................................................................. 523

Glossary ....................................................................................................................................... 527

Index ............................................................................................................................................ 535

Notes ........................................................................................................................................... 541
xx 

Figures 

Figure 1-1: U.S. agricultural supply chain for raw and processed products ............................. 1 

Figure 1-2: Refrigerated trucks enable the trucking industry to provide special services ....... 2 

Figure 1-3: A unit train has more than 50 cars, all of which are shipped from the same 

origin to the same destination ................................................................................ 7 

Figure 1-4: A 1,200-foot barge tow—a common length—passes through a 600-foot lock 

in two stages ......................................................................................................... 10 

Figure 1-5: The Estelle Maersk has a capacity of 11,000 TEUs ............................................... 13 

Figure 1-6: Highways are vital to the trucking industry .......................................................... 15 

Figure 2-1: Peas being harvested directly into a field truck ................................................... 19 

Figure 2-2: Agricultural and total freight moving on U.S. interstate system, 2002 ................ 20 

Figure 2-3: Agricultural and total freight moving on U.S. rail lines, 2006............................... 21 

Figure 2-4: Agricultural and total freight moving on U.S. waterways .................................... 22 

Figure 2-5: Grain movements by type of movement, 1978 to 2006 ...................................... 31 

Figure 2-6: Grain movements by mode, 1978 to 2006 ........................................................... 31 

Figure 2-7: Location of elevator storage capacity, with rail and barge systems .................... 33 

Figure 2-8: Grain and oilseed milling facilities, 2000 .............................................................. 34 

Figure 2-9: Corn surplus/deficit map with the transportation system ................................... 36 

Figure 2-10: Modal shares of corn exports, 2000-2006 ............................................................ 39 

Figure 2-11: Corn export inspections by port region, 2007 ...................................................... 39 

Figure 2-12: Soybean surplus/deficit map with transportation system ................................... 41 

Figure 2-13: Modal shares of soybean exports, 2000-2006 ..................................................... 42 

Figure 2-14: Soybean exports by port region ............................................................................ 44 

Figure 2-15: Wheat surplus/deficit map with a transportation system overlay ...................... 46 

Figure 2-16: Modal shares of wheat exports, 2000-2006 ......................................................... 47 

Figure 2-17: Wheat exports by port region............................................................................... 49 

Figure 2-18: Rice being harvested into a bankout truck ........................................................... 50 

Figure 2-19: Rice surplus/deficit map with transportation system overlay ............................. 53 

Figure 2-20: 2007 waterborne rice exports by port region ...................................................... 54 

Figure 2-21: Estimated grain-consuming animal units per county ........................................... 55 

Figure 2-22: Livestock processing facilities, 2002 ..................................................................... 56 

Figure 2-23: U.S. per-capita meat consumption ....................................................................... 58 

Figure 2-24: U.S. meat exports .................................................................................................. 59 

Figure 2-25: U.S. red meat and poultry production .................................................................. 59 

Figure 2-26: Long-term projections of U.S. meat and poultry exports ..................................... 61 

Figure 2-27: U.S. red meat surplus-deficit ................................................................................ 64 

Figure 2-28: Port regions moving beef exports, 2007 .............................................................. 66 

Figure 2-29: Port regions moving pork exports, 2007 .............................................................. 69 

Figure 2-30: U.S. poultry meat surplus-deficit .......................................................................... 71 

Figure 2-31: Top ten ports moving poultry exports, 2007 ........................................................ 72 

Figure 2-32: Dairy farms have been getting larger, driven by economies of scale .................. 74 

Figure 2-33: U.S. dairy surplus-deficit, U.S. highway system .................................................... 75 
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Figure 2-34: U.S. port regions used to move dairy exports, 2007 ............................................ 76 

Figure 2-35: Loading oranges in California ................................................................................ 80 

Figure 2-36: Fruit and vegetable processors per State ............................................................. 83 

Figure 2-37: U.S. ports used to export vegetables, 2007 .......................................................... 87 

Figure 2-38: U.S. ports used to import vegetables, 2007 ......................................................... 87 

Figure 2-39: U.S. ports used to export fruit, 2007 .................................................................... 88 

Figure 2-40: U.S. ports used to import fruit, 2007 .................................................................... 88 

Figure 2-41: U.S. apple surplus/deficit map with transportation overlay ............................... 90 

Figure 2-42: Ports used to export U.S. apples, 2007 ................................................................. 91 

Figure 2-43: Ports used to import U.S. apples, 2007 ................................................................ 92 

Figure 2-44: U.S. lettuce surplus/deficit map with transportation network ............................ 93 

Figure 2-45: Ports used to export U.S. lettuce, 2007 ................................................................ 94 

Figure 2-46: Ports used to import U.S. lettuce, 2007 ............................................................... 95 

Figure 2-47: U.S. potato surplus/deficit map with transportation overlay .............................. 96 

Figure 2-48: U.S. ports used to export potatoes, 2007 ............................................................. 97 

Figure 2-49: Ports used to import U.S. potatoes, 2007 ............................................................ 98 

Figure 2-50: Value of horticulture trade ................................................................................... 99 

Figure 2-51: Fertilizer use from 1960 to 2007 ........................................................................ 104 

Figure 2-52: Fertilizer production facilities ............................................................................. 106 

Figure 2-53: Nitrogen fertilizer use, top 10 States .................................................................. 107 

Figure 2-54: Phosphate fertilizer use, top 10 States ............................................................... 108 

Figure 2-55: Potash fertilizer use, top 10 States ..................................................................... 108 

Figure 2-56: U.S. international fertilizer trade – 10-year history ............................................ 109 

Figure 2-57: U.S. fertilizer imports, top 10 supplying countries, 2008 ................................... 110 

Figure 2-58: U.S. fertilizer export customers, top 10 countries, 2008. ................................... 110 

Figure 2-59: Fertilizer modal share ......................................................................................... 111 

Figure 3-1: People often choose to live in rural areas for a more relaxed quality of life and 

closeness to nature ............................................................................................. 115 

Figure 3-2: Rural and metropolitan counties ........................................................................ 116 

Figure 3-3: Rural America depends on trucks to move its products..................................... 117 

Figure 3-4: Composition of rural employment ..................................................................... 118 

Figure 3-5: Per-capita income gap ........................................................................................ 122 

Figure 4-1: Ethanol being loaded into rail tank cars ............................................................. 132 

Figure 4-2: U.S. ethanol production, 1981-2008 .................................................................. 133 

Figure 4-3: The U.S. ethanol market landscape in 2007 ....................................................... 134 

Figure 4-4: Ethanol Distribution ............................................................................................ 135 

Figure 4-5: The Petroleum Administration for Defense Districts (PADD) and their typical 

share of consumption of all U.S. motor gasoline consumption ......................... 136 

Figure 4-6: Corn stover being gathered for ethanol production .......................................... 137 

Figure 4-7: Projected U.S. cellulosic ethanol facilities .......................................................... 138 

Figure 4-8: Energy Independence and Security Act 2007, Renewable Fuel Standard 

(RFS-2) ................................................................................................................. 139 

Figure 4-9: Key rail corridors for shipping ethanol and DDGS .............................................. 141 

Figure 4-10: Ethanol modal shares in 2006 ............................................................................. 143 
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Figure 4-11: Quarterly carloads of alcohol and co-products terminated by major railroads 

in the United States, 4th quarter 2003-1st quarter 2009 ..................................... 144 

Figure 4-12: Loading a truck with DDGS in South Dakota ....................................................... 145 

Figure 4-13: U.S. exports of DDGS, Jan 2006–Feb 2009 ......................................................... 146 

Figure 4-14: Major destinations of U.S. DDGS exports, Jan–Feb, 2009 .................................. 146 

Figure 4-15: DOE’s estimate of intermediate saturation points ............................................. 150 

Figure 5-1: U.S. electric power industry net generation, 2007 ............................................. 153 

Figure 5-2: U.S. coal production by region, 1949-2007 ........................................................ 155 

Figure 5-3: Coal production by region, 2008, million tons and percent change from 2007 156 

Figure 5-4: Coal trains passing in Wyoming .......................................................................... 157 

Figure 5-5: Number of coal mines per state ......................................................................... 158 

Figure 5-6: Value of coal shipments per state ...................................................................... 159 

Figure 5-7: U.S. coal consumption by sector, 1987-2006 ..................................................... 160 

Figure 5-8: Share of electric power sector net generation by energy source, 2007 and 

2008 .................................................................................................................... 161 

Figure 5-9: U.S. electric industry net generation by State, 2007 .......................................... 162 

Figure 5-10: Electric power sector coal consumption by census region, 2008 ...................... 163 

Figure 5-11: Proportion of electricity capacity from coal, 1990 ............................................. 164 

Figure 5-12: Proportion of total electricity capacity from coal, 2007..................................... 164 

Figure 5-13: Number of electricity producers per State, 1990 ............................................... 165 

Figure 5-14: Number of electricity producers per State, 2007 ............................................... 166 

Figure 5-15: America’s electric cooperative network ............................................................. 169 

Figure 5-16: Total annual up-bound waterborne coal shipments, 2007 ................................ 170 

Figure 5-17: Total annual down-bound waterborne coal shipments, 2007 ........................... 171 

Figure 5-18: Density of coal shipments by rail ........................................................................ 171 

Figure 5-19: Annual rail shipments of coal in 1987-2006 by real revenue, tonnage .............. 172 

Figure 5-20: STB rail rate index, 1985 to 2007 ........................................................................ 173 

Figure 5-21: Coal rates and car ownership ............................................................................. 174 

Figure 5-22: Coal rates and shipment distance ....................................................................... 175 

Figure 5-23: Changes in average speed by railroad and train type, 1999-2005 ..................... 178 

Figure 5-24: Year-end coal stocks, 1999-2008 ........................................................................ 181 

Figure 5-25: On-time delivery index for coal shipments, 1997-2008 ..................................... 182 

Figure 5-26: On-time average for rail shipments: grain and coal ........................................... 183 

Figure 5-27: Captive vs. competitive freight rail rates ............................................................ 184 

Figure 6-1: Railroad shipment/grain production ratio, average 2004-2007 marketing 

years .................................................................................................................... 193 

Figure 6-2: Railroad grain origination market shares, 2007 ................................................. 196 

Figure 6-3: Railroad grain origination market shares, 1980 ................................................. 197 

Figure 6-4: Railroad wheat origination market shares, 2007 ............................................... 200 

Figure 6-5: Railroad wheat origination market shares, 1994 ............................................... 205 

Figure 6-6: Inverse HHI for grain and oilseed shipments by rail, 2003-2007........................ 211 

Figure 6-7: Inverse HHI for grain and oilseed shipments by rail, 1985-1992........................ 211 

Figure 6-8: Change in inverse HHI for grain and oilseed shipments by rail, 1985-199 ......... 212 
xxiii 

Figure 6-9: Change in R/VC for grain and oilseed shipments by rail, 1985-1992 

compared to 2003-2007 ..................................................................................... 213 

Figure 6-10: Grain and oilseeds: nominal rail revenues per ton for States with less 

transportation competition, by year .................................................................. 221 

Figure 6-11: Grain and oilseeds: nominal rail revenues per ton for States with more 

transportation competition, by year .................................................................. 222 

Figure 6-12: Grain and oilseeds: rail R/VC ratios for States with less transportation 

competition, by year ........................................................................................... 223 

Figure 6-13: Grain and oilseeds: rail R/VC Ratios for States with more transportation 

competition, by year ........................................................................................... 224 

Figure 6-14: Grain and oilseeds: nominal rail (tariff only) revenues per ton for States 

with less transportation competition, by year ................................................... 228 

Figure 6-15: Grain and oilseeds: nominal rail (tariff only) revenues per ton for States 

with more transportation competition, by year ................................................. 228 

Figure 6-16: Grain and oilseeds: rail R/VC ratios (tariff) for States with less transportation 

competition, by year ........................................................................................... 229 

Figure 6-17: Grain and oilseeds: rail R/VC Ratios (tariff only) for States with more 

transportation competition, by year .................................................................. 229 

Figure 6-18: Inverse Herfindahl Index for rail shipments: grain products for 2003 to 2007 .. 232 

Figure 6-19: Inverse Herfindahl Index for rail shipments: grain products for 1985 to 1992 .. 232 

Figure 6-20: Inverse Herfindahl Index for rail shipments: grain products period 1 to 

period 3 ............................................................................................................... 233 

Figure 6-21: Inverse Herfindahl Index for rail shipments: grain products period 1 to 

period 3 ............................................................................................................... 233 

Figure 6-22: Inverse Herfindahl Index for rail shipments: food products 2003 to 2007 ........ 234 

Figure 6-23: Inverse Herfindahl Index for rail shipments: food products 1985 to 1992 ........ 234 

Figure 6-24: Change in Inverse Herfindahl Index for rail shipments: food products 

period 1 to period 3 ............................................................................................ 235 

Figure 6-25: Change in revenue to variable cost for rail shipments: food products 

period 1 to period 3 ............................................................................................ 235 

Figure 6-26: Change in Inverse Herfindahl Index for rail shipments: fertilizer products 

period 1 to period 3 ............................................................................................ 236 

Figure 6-27: Change in revenue to variable costs for rail shipments: fertilizer products 

period 1 to period 3 ............................................................................................ 236 

Figure 7-1: Wheat—average rail tariff compared to average farm price ............................. 239 

Figure 7-2: STB rail rate index ............................................................................................... 242 

Figure 7-3: Tonnage traveling at rates over 300 percent R/VC, 1985-2005 ......................... 244 

Figure 7-4: Percent of grain and oilseed tons moved at R/VC over 300 percent ................. 245 

Figure 7-5: Selected States with higher percentages of grain and oilseeds moving at R/V . 246 

Figure 7-6: Miscellaneous revenue in waybill sample, 2000-2005 ....................................... 246 

Figure 7-7: Rate changes for coal, grain, mixed shipments, and motor vehicles ................. 247 

Figure 7-8: Average freight revenue per grains and oilseeds carload .................................. 248 

Figure 7-9: Railroad fuel surcharges ..................................................................................... 249 

Figure 7-10: Average quarterly revenue per railcar for wheat ............................................... 249 
xxiv 

Figure 7-11: Grain rates and car ownership ............................................................................ 250 

Figure 7-12: Grain and oilseeds tariff revenue (current $’s) per ton-mile by shipment size . 251 

Figure 7-13: Grains and oilseeds revenue (current $’s) per ton-mile by shipment distance . 253 

Figure 7-14: U.S. grain hopper car fleet capacity .................................................................... 254 

Figure 7-15: U.S. covered hopper car fleet ............................................................................. 256 

Figure 7-16: Railroad fuel surcharges for grain by quarter ..................................................... 258 

Figure 7-17: Comparison of grain fuel surcharges to railroad fuel costs ................................ 260 

Figure 7-18: Class I railroad cost of capital and return on net investment, 1997-2007 ......... 261 

Figure 7-19: Class I railroad profitability, 1998-2007 .............................................................. 265 

Figure 7-20: Railroad industry average cost, variable cost, and fixed cost in dollars per 

ton-mile ............................................................................................................... 266 

Figure 7-21: Railroad industry average revenue and marginal costs ..................................... 267 

Figure 7-22: Grain products revenue (current $) per ton-mile by shipment size ................... 269 

Figure 7-23: Grain products revenue (current $) per ton-mile by shipment distance ........... 273 

Figure 7-24: Food products revenue (current $) per ton-mile by shipment size ................... 273 

Figure 7-25: Food products revenue (current $) per ton-mile by shipment distance ............ 274 

Figure 7-26: Fertilizer revenue (current $) per ton-mile by shipment size ............................. 274 

Figure 7-27: Fertilizer revenue (current $) per ton-mile by shipment distance ..................... 275 

Figure 7-28: Fertilizer revenue (current $) per ton mile by shipment distance ..................... 275 

Figure 8-1: Average on-time delivery index for all Class I Railroads for grain ...................... 278 

Figure 8-2: Customer service index for Class I Railroads for grain ....................................... 281 

Figure 8-3: Average on-time delivery index for grain—BNSF & UP ...................................... 281 

Figure 8-4: Customer service index for grain—BNSF & UP ................................................... 283 

Figure 8-5: Average on-time delivery index for grain – CSXT & Norfolk Southern ............... 283 

Figure 8-6: Customer service index for grain—CSXT & Norfolk Southern ............................ 284 

Figure 8-7: Customer service index for grain—CN & C ......................................................... 284 

Figure 8-8: Customer service index for grain—CSXT, NS, CN, and CP .................................. 285 

Figure 8-9: Percentage of grain and oilseeds by type of movement .................................... 286 

Figure 8-10: Grain tonnages moved by type of covered hopper car ...................................... 290 

Figure 8-11: Percentage of grain moved by type of covered hopper car ............................... 291 

Figure 8-12: Schematic of a paper barrier .............................................................................. 292 

Figure 8-13: Schematic of a paper barrier .............................................................................. 295 

Figure 9-1: Change in rail tonnage and real gross domestic product, 2000 to 2007 ............ 306 

Figure 9-2: Estimated interstate capacity to 2010 ................................................................ 307 

Figure 9-3: Rail capacity in 2007 ........................................................................................... 308 

Figure 9-4: Rail commodity flow map of total vs. agricultural component .......................... 309 

Figure 9-5: Average train speed, all trains, 1999–2003 ........................................................ 312 

Figure 9-6: Average train speed for grains, 1999-2003 ........................................................ 313 

Figure 9-7: Average train speed (all trains) from 2004-2008 ................................................ 314 

Figure 9-8: Average train speed for grains, 2004-2008 ........................................................ 315 

Figure 9-9: Average BNSF Railway train speed (all trains), 2003-2008 ................................. 316 

Figure 9-10: Average BNSF Railway train speed for grain, 2003-2008 ................................... 317 

Figure 9-11: Average Union Pacific train speed (all trains), 2003-2008 ................................. 318 

Figure 9-12: Average Union Pacific train speed for grains, 2003-2008 .................................. 319 
xxv 

Figure 9-13: Average train dwell times, 2001-2004 ................................................................ 320 

Figure 9-14: Average train dwell times, 2005-2008 ................................................................ 321 

Figure 9-15: Average train dwell times for BNSF Railway, 2003-2008 ................................... 322 

Figure 9-16: Average train dwell times for Union Pacific, 2003-2008 .................................... 322 

Figure 9-17: Average train dwell times for Norfolk Southern, 2003-2008 ............................. 323 

Figure 9-18: Average train dwell times for CSX, 2003-2008 ................................................... 324 

Figure 9-19: Average train dwell times for CN, 2003-2008 .................................................... 325 

Figure 9-20: Miles of track of Class I Railroads, 1987-2006 .................................................... 326 

Figure 9-21: Percent of track miles owned and operated by Class I Railroads, 1987-2006 ... 326 

Figure 10-1: Railroads must invest in infrastructure to keep up with increasing 

transportation demand ....................................................................................... 333 

Figure 10-2: Class I Railroad capital expenditures .................................................................. 340 

Figure 10-3: A Norfolk Southern dispatch center. Railroads have been investing in new 

technology to increase efficiency ....................................................................... 343 

Figure 10-4: The Alameda Corridor moves freight quickly through Los Angeles to the 

Port of LA ............................................................................................................ 346 

Figure 12-1: Ohio packet boats in the early 19th Century ...................................................... 369 

Figure 12-2: Barge tonnage by commodity group, 2007 ........................................................ 371 

Figure 12-3: Agriculturally-significant waterways ................................................................... 372 

Figure 12-4: Barge Tow on the Mississippi River .................................................................... 373 

Figure 12-5: Grain barge being loaded .................................................................................... 376 

Figure 12-6: Quarterly barge rates from St. Louis to New Orleans, 2004-08 ......................... 379 

Figure 12-7: Weekly barge rates, St. Louis to New Orleans, 10-year average (1990-1999) ... 380 

Figure 12-8: Grain barge rates in 2008 above the 4-year average ......................................... 381 

Figure 12-9: Quarterly barge rates from St. Louis to New Orleans, 1994-2009 ..................... 381 

Figure 12-10: Spot barge rates, pre- & post-Katrina ................................................................. 382 

Figure 12-11: Katrina corn basis impact in 2005 ....................................................................... 382 

Figure 12-12: Upper Mississippi River and the Illinois Waterway ............................................ 384 

Figure 12-13: Building Olmsted locks and dam on the Ohio River. Construction work began 

in 1991 and originally was scheduled to be finished by 2006 ............................ 387 

Figure 12-14: Annual commercial tonnage and lockage numbers at Lock 25, 1989-2009 ....... 388 

Figure 12-15: A barge tow on the Mississippi river in St. Louis ................................................ 390 

Figure 12-16: Missouri River ..................................................................................................... 392 

Figure 12-17: Big Bend Dam on the Missouri River, South Dakota. One of the six reservoirs 

making up the Missouri River system ................................................................. 393 

Figure 12-18: Columbia-Snake River System ............................................................................ 394 

Figure 12-19: Barge tow on the Columbia River ....................................................................... 395 

Figure 13-1: Unloading a truck. Trucks are usually the first and last links in the supply 

chain .................................................................................................................... 403 

Figure 13-2: Half of all trucking operations are owner-operator companies ......................... 405 

Figure 13-3: Potato harvest being loaded into trucks ............................................................ 408 

Figure 13-4: Trucks in line to load during a wheat harvest. Many extra drivers are needed 

during the harvest season................................................................................... 417 
xxvi 

Figure 13-5: Colorado Department of Transportation is replacing bridges on I-76 with $11 

million in Federal stimulus funds ........................................................................ 420 

Figure 13-6: Correlation between average diesel fuel prices and truck rates for fruits and 

vegetables ........................................................................................................... 427 

Figure 13-7: Diesel fuel percentage of truck rates .................................................................. 428 

Figure 13-8: National average grain truck rates by trip distance ........................................... 429 

Figure 13-9: Index of current ease of hiring grain truck capacity ........................................... 430 

Figure 13-10: Grain truck demand index .................................................................................. 431 

Figure 14-1: Bulk shipping vessel ............................................................................................ 442 

Figure 14-2: Container Shipping Vessel .................................................................................. 448 

Figure 14-3: Container rates for trans-pacific trade lanes ...................................................... 450 

Figure 14-4: Intermodal Facilities, 2002.................................................................................. 454 

Figure 14-5: Waterborne agricultural container trade ........................................................... 456 

Figure 14-6: Ports moving agricultural imports, 2007 ............................................................ 460 

Figure 14-7: Ports moving agricultural exports, 2007 ............................................................. 460 

Figure 14-8: Top 20 container ports for exports and imports ................................................ 461 

Figure 14-9: Top 20 bulk ports for imports and exports ......................................................... 463 

Figure 14-10: Mississippi Gulf ports and export grain elevators .............................................. 465 

Figure 14-11: Texas gulf ports and export grain elevators ....................................................... 466 

Figure 14-12: Map of Alameda Corridor ................................................................................... 472 

Figure 14-13: Bulk grain ocean freight rates from U.S. to Japan .............................................. 478 

Figure 14-14: Container rates for trans-pacific trade lanes ...................................................... 479 

Figure 14-15: Containerized agricultural exports ..................................................................... 480 

Figure 14-16: Containerized grain exports to Asia .................................................................... 482 

Figure 14-17: Average ocean freight rates from U.S. West Coast to Japan .............................. 483 

Figure 14-18: Monthly movements of containerized agricultural exports ............................... 484 

Figure 15-1: Trucks, trains, and ships all work together to move America's goods ............... 498 

Figure 15-2: Modal costs related to distance and relative fuel efficiency .............................. 500 

Figure 15-3: Grain modal shares, 1978-2007 .......................................................................... 500 

Figure 15-4: Average quarterly diesel fuel prices ................................................................... 501 

Figure 15-5: Percent change in fuel prices and grain rates for container, rail, and truck ...... 503 

Figure 15-6: Percent change in fuel prices and grain rates for bulk ocean and barge ........... 503 

Figure 15-7: Highway under construction ............................................................................... 514 

Figure 15-8: Truck gate at the Port of Los Angeles ................................................................. 516 

Figure 15-9: A locomotive refueling ........................................................................................ 520 

 
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Tables 

Table 2-1: Transportation characteristics of agricultural commodities, 2002 and 2007 ........ 24 

Table 2-2: Modal transportation characteristics of agricultural commodities by 

volume, 2002 .......................................................................................................... 25 

Table 2-3: Modal transportation characteristics of agricultural commodities, 

by ton-miles, 2002 .................................................................................................. 26 

Table 2-4: Key Supply and Demand Indicators: U.S. Major eight Field Crops, (million 

metric tons) ............................................................................................................ 29 

Table 2-5: Corn usage by sector, percentage .......................................................................... 34 

Table 2-6: U.S. corn supply and use for various marketing years, million bushels ................. 35 

Table 2-7: Corn modal shares .................................................................................................. 38 

Table 2-8: U.S. soybean supply and use for various marketing years (in million bushels) ..... 40 

Table 2-9: Soybean modal shares, 2000-2006 ........................................................................ 43 

Table 2-10: U.S. wheat supply and use, (million bushels) ......................................................... 45 

Table 2-11: Wheat modal shares, 2000–2006 .......................................................................... 48 

Table 2-12: U.S. rough and milled rice (rough equivalent) supply and use (million 

hundredweights) .................................................................................................... 51 

Table 2-13: Share of private vs. for-hire truck activity, 2002 .................................................... 57 

Table 2-14: U.S. beef, pork, chicken, and turkey supply and use long-term projections ......... 62 

Table 2-15: Major U.S. cattle slaughter States, 2007 ................................................................ 63 

Table 2-16: U.S. beef supply and use, 1999-2009 ..................................................................... 65 

Table 2-17: Hogs and pigs inventory in major States on December 1, 1987-2007. .................. 67 

Table 2-18: U.S. pork supply and use, 2004-2008 ..................................................................... 68 

Table 2-19: Major U.S. chicken slaughter States, 2007 ............................................................. 70 

Table 2-20: U.S. poultry supply and use, 2007 .......................................................................... 72 

Table 2-21: Major milk producing States, 2007 ........................................................................ 75 

Table 2-22: U.S. dairy supply and use long-term projections ................................................... 78 

Table 2-23: Supply and demand of apples, lettuce, and potatoes ........................................... 89 

Table 2-24: Fruit and vegetable long-term supply and use projections ................................. 101 

Table 2-25: Chemical fertilizer movements for rail and barge ............................................... 112 

Table 3-1: Comparison of economic and demographic indicators in metropolitan and 

rural America ........................................................................................................ 119 

Table 3-2: Key economic and demographic indicators for nonmetropolitan America ......... 120 

Table 3-3: Population employed in manufacturing............................................................... 123 

Table 3-4: Rural population employed in manufacturing by State ....................................... 124 

Table 3-5: Rural manufacturing employment by sector in 1996 .......................................... 125 

Table 3-6: Major factors affecting rural manufacturers ....................................................... 127 

Table 4-1: EPA projected renewable fuel volumes (billion gallons) ...................................... 140 

Table 4-2: Summary of EPA-projected renewable fuel volumes (billion gallons) ................. 140 

Table 4-3: Ethanol capacity distribution, March 2008 .......................................................... 142 

Table 4-4: Renewable Fuels Standard-2 (as mandated by EISA 2007) and possible phases 148 

Table 5-1: Electric utility providers by type of ownership .................................................... 167 
xxviii 

Table 5-2: Sales by customer type and by type of ownership .............................................. 167 

Table 5-3: Changes in average speed by railroad and train type, 1999-2005 ...................... 177 

Table 5-4: Variability in average train speed by railroad and train type, measured by 

coefficients of variation ........................................................................................ 179 

Table 5-5: Summary of STB consumer complaint statistics, 2005-2008 .............................. 183 

Table 6-1: Number of two-party agreements required to collude ....................................... 208 

Table 6-2: Grain and oilseeds, changes in inverse HHI by number of CRD ........................... 218 

Table 6-3: Grain and oilseeds, changes in R/VC ratios by inverse HHIa .............................. 220 

Table 6-4: Grain and oilseeds, comparisons of nominal tariff rail revenue per ton and 

ton-mile and R/VC by State (in $/ton) .................................................................. 226 

Table 6-5: Summary of HHIs and R/VCs for four commodity groups analyzed by number 

of CRDs ................................................................................................................. 237 

Table 7-1: U.S. covered hopper car fleet ............................................................................... 257 

Table 7-2: Merger of Atchison, Topeka & Santa Fe with Burlington Northern .................... 262 

Table 7-3: Union Pacific purchase of Southern Pacific .......................................................... 263 

Table 7-4: Union Pacific Purchase of Chicago Northwestern (CNW) .................................... 263 

Table 8-1: On-time delivery and customer service indices by Class I railroads, 

June 2, 1997 through December 8, 2008 ............................................................. 287 

Table 8-2: Summary of UP/M&NA lease contract ................................................................ 297 

Table 8-3: Complaint cases by category and region, 2008 ................................................... 300 

Table 8-4: Complaint cases by category and region, 2006 ................................................... 301 

Table 8-5: Complaint cases by category and region, 2005 ................................................... 301 

Table 8-6: Complaint cases by commodity group, 2005, 2006, and 2008 ............................ 302 

Table 9-1: Percent of privately owned railcars on line, 1999–2007 .................................... 327 

Table 9-2: Freight railcar acquisitions, 1981–2007 .............................................................. 328 

Table 9-3: Selected railcar fleet statistics, 1976–2007 ......................................................... 329 

Table 9-4: Selected locomotive fleet statistics, 1992–2007.................................................. 330 

Table 9-5: Changes in annual expenditures for Class I Railroads, 1988–2006 ...................... 331 

Table 10-1: Eastern railroads, capital expenditures ($1,000) ................................................. 341 

Table 10-2: Western railroads, capital expenditures ($1,000) ................................................ 342 

Table 12-1: Covered barges on the Mississippi River system, by operator, 2008 ................ 375 

Table 12-2: Quarterly barge rates from St. Louis to New Orleans, 2004–2008 ...................... 378 

Table 12-3: Importance of Upper Mississippi River and Illinois Waterway to agriculture ..... 389 

Table 12-4: Up-bound and down-bound barge tonnage, by river, 1998–2007 ...................... 396 

Table 12-5: Current funding allocations for inland waterway projects .................................. 399 

Table 12-6: Up-bound and down-bound barge tonnage, by river, 1998–2007 ..................... 402 

Table 13-1: Commercial vehicle size limits.............................................................................. 413 

Table 14-1: Global dry bulk fleet, February 2010 .................................................................... 443 

Table 14-2: Global dry bulk orderbook, 2010-2015 ................................................................ 444 

Table 14-3: World oceangoing merchant fleet ...................................................................... 445 

Table 14-4: World merchant fleet by country of owner and type .......................................... 446 

Table 14-5: Global container ship fleet, February 2010 .......................................................... 449 

Table 14-6: Global container ship orderbook, 2010-2014 ...................................................... 449 

Table 14-7: Waterborne agricultural exports .......................................................................... 457 
xxix 

Table 14-8: Container shipping lines for agricultural exports ................................................. 458 

Table 14-9: Bulk waterborne agricultural exports .................................................................. 462 

Table 14-10: Major U.S. grain export ports ............................................................................... 464 

Table 14-11: Mississippi gulf ports and export grain elevators ................................................ 465 

Table 14-12: Texas gulf ports and export grain elevators ......................................................... 466 

Table 14-13: Comparison of port fees at Ports of Los Angeles and Long Beach ....................... 475 

Table 14-14: Fee scenarios for moving containers through Southern California ports ............ 476 

Table 14-15: Bulk grains ocean freight rates ............................................................................. 477 

Table 14-16: Comparisons of filing requirements by mode ...................................................... 485 

Table 15-1: Fuel price and freight rate changes by mode ....................................................... 502 

 
xxx