Continued rail service interruptions lead to unfilled orders

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Rail service disruptions associated with winter weather and ongoing labor shortages are hurting availability of grain cars and causing record levels of unfilled orders.

Danny Munch, an economist with AFBF says one of the main metrics for railway service quality is unfilled grain car orders.

“So far in 2023, average weekly unfilled grain car orders one or more days overdue have numbered over 16,000 a week, that’s up 54 percent from last quarter and 54 percent the same magnitude from quarter one of last year. Of those record unfilled orders, one or more days overdue, almost 75 percent remain 11 or more days overdue,” Munch said.

Right now winter weather is the biggest hurdle.

“Most of the issues we’re seeing in unfilled orders are concentrated in the upper Midwest in states like North Dakota and Minnesota. The region has faced intense snowstorms in the first part of the year which makes moving those cars more difficult. Those weather events are usually more short-term, and we hope those subside as spring comes along,” Munch said.

Munch says labor is another hurdle for railways, as we saw last year during contract labor negotiations.

“Most railroads are still below pre-pandemic employment levels by about three to five percent, which makes it difficult for them to increase capacity. Luckily though, those numbers are still getting better, still better than the ten percent below that they were about a year ago. And in order to improve service quality, they really need to be fully staffed and growing,” Munch said.

Story via NAFB

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