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Shipping Wheat: Truck or Barge? by Ken Casavant Transportation Characteristics of Wheat & Barley Shipments on Haul Roads to and from Elevators in Eastern Washington, March 1995

"Bulk rail rates are lower than truck-barge rates..."

Comparison of costs for Washington wheat counties
(cents per bushel)

	Train Options				Breakdown
County1	1-Car	3-Car	25/26-Car	Truck/Barge	Truck	Barge	Put-Thru Charge	Wheat Shipped (1000 bushels)	% shipped by Truck/Barge
Whitman	37.15	32.31	25.85	33.74	11.29	17.45	5.0	32,148	78.9
Walla Walla	36.95	30.78	24.36	28.59	9.30	14.29	5.0	17,756	80.8
Lincoln	42.10	38.75	33.83	41.51	21.50	15.01	5.0	13,101	19.8
Adams	36.52	33.32	28.21	33.47	13.41	15.06	5.0	10,634	65.4
Grant	40.84	37.64	32.51	40.23	20.81	14.42	5.0	8,822	35.2
Columbia	39.18	32.78	25.18	28.64	7.26	16.38	5.0	4,789	92.6
Garfield	41.30	33.30	25.70	28.81	6.50	17.31	5.0	4,270	83.5
Douglas	42.17	39.36	34.41	47.10	28.00	14.10	5.0	2,847	18.6
Spokane	39.31	34.20	28.36	42.18	20.31	16.87	5.0	1,359	2.9
Franklin	36.00	32.80	27.70	29.90	10.55	14.35	5.0	1,021	92.7
Yakima	31.50	28.30	25.70	35.60	16.50	14.10	5.0	907	22.1
Chelan	40.50	37.20	32.20	47.10	28.00	14.10	5.0	508	0
Benton	31.73	27.87	N/A2	29.93	10.83	14.10	5.0	410	69.5
Okanogan	47.50	44.30	39.20	47.10	28.00	14.10	5.0	334	0
Stevens	45.80	42.40	N/A2	46.36	26.00	15.36	5.0	325	6.2
Kittitas	31.50	28.30	N/A2		22.00			200	0
Average	38.75	34.60	29.48	37.65	17.52	15.13	5.0	99,431	Total

¹ Counties in bold border on the Lower Snake River.
² An omission of a rate means that mode was not offered in the corresponding county.
³ Yellow background denotes counties that prefer truck/barge.
⁴ Rates to Columbia river ocean elevators are used for comparison since nearly 80 percent of wheat from the 16 counties in the study area is shipped to those elevators.
⁵ Conversion: 36¾ bushels in a metric ton.

The county average truck-barge and 25/26-car rail rates are the primary competitors for grain movement to ocean elevators. Bulk rail rates are lower than truck-barge rates for all (Eastern Washington) counties except for those counties who did not use bulk rail. ²

In general, the closer a county is to the river system, the greater the differential between single car rail rates and 25/26-car rail rates. This suggests that truck-barge rates create a downward pressure on bulk rail rates. In Whitman, Garfield, Walla Walla, and Columbia counties, single-car retail rates for wheat shipment ranged from 43.7 percent higher than the 25/26-car rates in Whitman county to 60.7 percent higher in Garfield County. Spokane County single-car rates were 38.6 percent higher than the bulk rail rates, Franklin County single-car rates were 30 percent higher and the difference in the remaining counties ranged from 21.2 percent in Okanogan County to 25.8 percent in Chelan County.

In elevators that ship less than 20% of their wheat truck-barge, the 25/26-car rail rate for those elevators on the average is higher than if the elevator shipped more than 20% via truck-barge. The bulk rail rates seems to continue to decline as the percentage of wheat shipped via truck-barge increases, suggesting rail is attempting to react to the competitive environment between the two modes. It is difficult to make the inverse comparison between bulk rail and truck-barge because truck-barge rates are heavily influenced by the truck portion of the shipment and truck cost is heavily influenced by the distance trucks haul grain to the river elevators.

While most wheat and barley is received at elevators during harvest season, elevators with over 1 million bushels in capacity receive grain on a constant basis through the year. It is likely that most of these elevators are either rail sub-terminals or river terminal elevators. thus, it is the transshipment of grain that occurs throughout the rest of the year.

Elevator operators report that over 89 percent of all the farmers within a 10 mile radius of their elevators ship all or some of their grain to their elevator. Elevator operators also report that of their clients who use their elevator, over 88% are within 10 miles of their elevator. Both of these statistics confirm that most grain does not move very far at harvest time to an elevator.

Background

The initial demand for commercial grain production began in Eastern Washington in response to the influx of miners into the region during the 1850s. Grain was delivered by wagon from the farms to the mining camps. Over the next 125 years the transportation system was expanded into a complete multimodal system as rail lines were built, roads were paved and improved, and a 465 mile waterway was created by a series of locks and dams on the Snake and Columbia Rivers.

Multimodal shipments have been part of the Eastern Washington grain business since the 1850s. Grain was originally shipped from the Walla Walla region to the coastal regions using a combination of wagons and steamships. Portage railroads were built, at Celilo in 1859 and at Cascades in 1863, to move grain from steamboat to steamboat around the (rapids) at those locations.

In the late 1870s and 1880s, railroads rushed to build lines into the rich Palouse region as they competed to transport the agricultural products from the area. Steamboat traffic on the river ended in 1880; by 1882, Walla Walla was connected to Portland by railroad. Over 1,500 miles of rail line had been constructed in Washington by the end of the 1880s; interestingly, this is a little more than the 1,369 miles of rail lines abandoned in Washington between 1980 and 1991.

Water transportation on the Salmon (Snake) and Columbia river was reborn when the Bonneville Lock and Dam opened in 1937. Then by 1975 river traffic increased dramatically as the McNary, The Dalles, and John Day dams and locks were opened on the Columbia River and the Ice Harbor, Lower Monumental, Little Goose, and Lower Granite dams and locks were opened on the Snake River. The full 465 mile slack water system from Lewiston, Idaho to the Pacific Ocean became operational in 1975. By 1978, Columbia River ports received 87 percent of the total volume of grain shipped from Eastern Washington. Truck-barge moved 51 percent of the grain to the ocean ports in 197, rail shipped 36 percent and 13 percent went to Puget Sound ports.

Trucks originally were used as feeders for the rail system, bringing produce from production areas to the rail station. The miles of hard surface roads in Washington grew from 91 in 1910 to 4,200 in 1942. The number of roads grew substantively after World War II as federal aid for highways was increase. Many of the roads serving rural Washington were laid out during the 1920s and 1930 and later paved and hard surfaced during the 1940s and 1950s.

During the 1950s, trucks became an effective long haul competitor to rail carriage of grain as railroads were discouraged from setting competitive rail rates by the Interstate Commerce Commission regulatory process. Rail deregulation legislation passed in 1980 provided railroads the opportunity to price their services competitively and eased the restrictions on abandoning unprofitable lines.

Following rail deregulation in 1980, a rail rate structure was established which offered considerably lower rates for shipments shipped as bulk rail. Additionally, the railroads abandoned over 1,369 miles of branch lines over the next 11 years, leaving some country elevators without rail service. As a result of abandonment, rail shipment of grain became concentrated at elevators which could take advantage of the 25/26-car rail rates. these elevators had rail sidings that could handle 25 or 26 car units and had the high volume load out equipment to load the rail car unit within 24 hours.

As of the early 1980s, trucks were no longer able to compete for the long haul movement of grain. Two competitive modes emerged and greatly influenced the decrease in utilization of trucks. Barge companies use the Snake and Columbia river System extensively since completion in 1975. Railroad companies experienced greater regulatory freedom which allowed them to adopt new pricing schemes to compete directly with trucks. the original feeder role of trucks was reborn and expanded as trucks moved grain from satellite elevators to multiple-rail car terminals, river terminals, and to local buyers such a cattle feeders, dairies, flour mills, and breweries.

Grain is delivered at harvest time to an elevator within a relatively short distance of the field or to the farmer's own storage. Farmers wish to minimize the transport time from the field to initial storage so as to have the trucks available to empty the combines in the field and to keep the combines harvesting grain. Once the grain is ready to harvest, each additional day it is unharvested increases the risk the crop could be lost to rain, hail, fire or wind.

. . .

The complete (meaning access to truck, barge and rail) transportation system found in Eastern Washington has allowed producers to develop links with distant consumers as the region expands its wheat, barley and other grain markets globally. the economic forces created by the competition between rail, truck and barge have provided one of the most competitive transportation rate structures of any grain producing are in the U.S., an important factor as global markets become increasingly competitive. It is against this backdrop of an elevator and grain storage system developed during the 1930s and early 1940s and a dramatically changed transportation system which continues to evolve as it responds to market shifts, changing public policy and a dynamic transportation environment, that this study is place.

Related Sites:
Complete Transportation Report
Eastern Washingtion Intermodal Transportation Report