Our road, bridge, rail and river transport infrastructure is failing. In fact, these soybean-export lifelines received a D+ grade from the American Society of Civil Engineers.
Weak links to export channels reduce farm profits and U.S. soy’s competitive advantage.
Today’s $560 million worth of backlogged lock and dam repairs add up to a brewing perfect storm for existing roads and rails unable to handle increased volume from a closed waterway or weak infrastructure, according to new Illinois Soybean Association (ISA) infrastructure studies.
One vital bridge or lock collapse during peak season would be a house of cards, as roads and bridges buckle under resulting bottlenecks, according to a new Illinois Soybean Association (ISA) infrastructure study (see www.ilsoy.org/isa/transportationkey-transportation-research and http://bit.ly/TransportationSoy.)
Consider: If the LaGrange, Ill., lock on the Illinois River fails/closes for 90 days during peak soybean harvest movement, 341 barge loads would be diverted as 21,000 truck loads or 5,200 rail carloads, the study finds.
In order to reach Illinois’ goal of utilizing 600 million bushels soybeans by 2020, production needs to increase approximately 30%, but our infrastructure may not support it, says Ron Kindred, Atlanta, Ill., ISA director. (This is a 29% increase over the 466 million bu. in 2011.)
Solutions for infrastructure shortfalls
The studies point to several solutions for these U.S. soybean-shipping infrastructure shortfalls:
Public-private partnerships to repair infrastructure, as outlined in a related Water Infrastructure Public-Private Partnership Act introduced in mid-March. The bipartisan legislation includes public-private partnerships for lock and dam modernization along the Mississippi and Illinois rivers. It was introduced by Illinois Senators Dick Durbin and Mark Kirk and Illinois Representatives Cheri Bustos and Rodney Davis. This type of partnership is used in Panama.
The U.S. Army Corps of Engineers estimates that today’s $60 billion backlog of total infrastructure projects would take decades to complete. The five-year pilot program in this legislation would identify up to 15 previously authorized projects for participation. The program would explore agreements between the Army Corps and private entities as alternatives to traditional financing, planning, design and construction models. It does not allow privatization of any federal asset.
Container shipping represents a sound option for growers near a container-ready port, like Chicago. (About 8% of Illinois soybean shipments leave the state in containers.)
And, backhauls in 20% of containers leaving the U.S. empty are a cost-effective way to reach Asian countries often lacking storage facilities to accommodate bulk ships.
Containers’ interior environment poses no significant threat to soybean physical or internal quality, even on longer trips, according to a national study.
U.S. soybean exports depend increasingly on rail, according to a national study, “Maintaining a track record of success,” financed by USB and coordinated by the Soy Transportation Coalition. Rail transport uses just one-third the fuel of trucks per ton/mile transported, it reports (see http://bit.ly/railSBStudy). It suggests that sufficient rail infrastructure investments for soybean industry growth would gradually shift U.S. soybean export traffic from truck to rail, increasing transportation cost-effectiveness.
How we compare to Brazil
Although Brazil is improving its export infrastructure, a truckload of Brazilian soybeans still travels 28 times as far to market as it does in the U.S., says Ken Eriksen, senior vice president, Informa Economics (an average of 1,000 miles in Brazil vs. 35 miles in the U.S.).
U.S. infrastructure still has the potential to be better than other countries’, Informa says.
Still, the U.S. infrastructure is a weak link between increasing U.S. soybean exports beyond the $74 billion they add to the U.S. economy.