Agriculture Industry Turns to Rail Transportation to Maximize Harvest Season

The 2017 Harvest Season is coming to a close and according to the USDA, this year’s harvest is projected to result in near record level yields with an estimated 14.3 billion bushels of corn and 4.43 billion bushels of soybeans.

During this peak season for the agribusiness industry, the efficient and reliable transportation of crops is critical to maximizing yield.

Agriculture customers across the U.S. rely on a consistent and dependable rail service product to meet market demand, moving goods from production to processing in the most cost-efficient way possible.

CSX has been committed to meeting that demand again this year by providing its customers the capacity, equipment, and service needed to reap the benefits of a successful harvest season.

CSX serves over 300 agriculture locations across a network that encompasses 21,000 miles of track, 23 states and 2/3 of the U.S. population.

CSX’s recent transition to Precision Scheduled Railroading is focused on providing customers, including the agriculture industry, a best-in-class rail service. After experiencing some transitional issues during the summer months, service across the CSX network, including the grain network, has seen significant improvements.

CSX now reports that dwell and velocity are stable and at or better than 2016 levels, year-over-year (YOY) comps are good compared to the other Class I railroads, customer problem logs are down and velocity on our grain trains is up more than 20% quarter-to-date versus last year. CSX’s key performance metrics are reported to the Surface Transportation Board each week and are available online at www.csx.com/servicemetrics.

Throughout harvest season, CSX’s agriculture service product has been strong, despite a recent report based on outdated information. The grain network has been appropriately resourced this season and is recording velocity that is at or above 2016 service levels.

Working With Agriculture Customers to Meet Demand

A farmer’s success hinges on proper planning and execution before the calendar turns to fall. This includes proper supply chain planning, which starts well ahead of the harvest.

Having a deep-rooted knowledge of crop production, the CSX sales and marketing team proactively worked with customers to forecast capacity demands ahead of the 2017 season.

The forecasting activity projected the number of trains needed every two weeks from October to January to ensure the railroad had the proper resources available including crews, locomotives, and cars and that the customer was staffed to load and unload equipment.

“Harvest has generally run smoothly up to this point,” said Tim McNulty, VP of Agricultural & Mineral Products for CSX.

“The November USDA crop progress report indicated corn harvest is 70% complete and soybean harvest is 90% complete and our agriculture business in a good place.

“Through proper planning and customer engagement, reservations for equipment have been consistently less than forecasted. The pre-planning and collaboration between the customer, sales, and operations have allowed CSX to meet the demand in the marketplace,” McNulty said.

In addition to the collaborative forecasting of equipment needs, CSX has invested more than $200 million over the past decade in its main grain corridor to add network capacity and added 2,100 large capacity covered hoppers to support the agriculture industry.

Improving Asset Utilization Year-Round Through the Grain Express Program

Customer collaboration is not limited to the harvest season. CSX partners with customers to identify ways to maximize efficiencies and better utilize rail and private assets, benefiting both the customer and railroad.

One way CSX does this is through the Grain Express program, an initiative focused on ensuring 90-car unit trains are loaded and unloaded within 15 hours of arrival. The Grain Express program provides customers an efficient and fluid transportation solution connecting fast-load and unloading facilities, allowing customers to better maximize their resources and reduce capital expenditures by turning trains faster.

The success of the program for customers and the railroad has increased interest in the initiative, with participation increasing 23% in 2017.

“We listen intently to our customers and aggressively pursue their concerns,” said McNulty.

“We always encourage our customers to bring their concerns directly to CSX - it’s always the most effective and expeditious way to arrive at a resolution.”

CSX Agriculture Locations Map

From Rail to Table: How Rail provides the Ag Industry a Reliable and Cost-effective Transportation Solution

Below are three case studies on how the collaborative partnership between the agriculture industry and CSX delivers for shippers and consumers across the U.S.

Case Study

During the STB listening session in October 2017, Georgia-based Wayne Farms shared their experience with CSX during the transition to a precision-scheduled railroading operating model

“For the last several months, we have been hyper-sensitive to the recent challenges presented by the evolution toward [PSR]. Our local and corporate management have been in daily contact with CSX  local, unit train, and sales and marketing management team to insure our pipelines are moving expeditiously…I cannot say that there have not been some challenging situations that have arisen, but the positive news is that CSX as a whole has been very responsive and dedicated to providing a seamless supply chain for Wayne Farms,” adding that “CSX has risen to the challenge of the recent operational changes, with communication being consistent and proactive from the local level to senior management.” - Glenn B. Smith, Director, Feed Ingredient Procurement for Oakwood, Georgia-based Wayne Farms

Learn more about Wayne Farms and CSX’s partnership

Case Study

The Midnight Train from Georgia Delivers Big for Florida Farmers after Hurricane Irma

Days after Hurricane Irma tore through the entire state of Florida, infrastructure was left in a tangled mess. Without the ability to get truckloads of feed into south Florida, dairy farmers were quickly running out of feed for livestock. CSX was able to work with federal, state and local governments alongside agriculture groups to coordinate a train into the affected area, delivering the desperately needed feed to keep the agriculture businesses operating.  

“It was truly a group effort to make this happen,” said Jim Sleper, CEO of Southeast Milk, Inc. “We have our own feed mills, and we were able to send a few semi-loads down to Okeechobee. But it wasn't very much - they needed trainloads, not truckloads.”

Read the full story on the Great Grain Train in Farm Journal’s MILK

Case Study

An Ethanol Customer Grows their Business by Leveraging Reliable Rail Service

Ethanol is a central ingredient to many of the items we use daily from cleaning supplies and spray paints to lotions and colognes, but it is most commonly known for its use as a biofuel. Ethanol is a green, renewable energy source created by fermenting corn, or other plant-based materials. Reliable and consistent supply chains are a critical element of the business model for ethanol producers and the broader agribusiness industry. Both producers and companies that leverage ethanol in the manufacturing process, run lean production cycles and rely on transportation providers to deliver on commitments.

Green Plains expressed tremendous trust in both the transportation and sales and marketing teams. The company indicated, “The CSX service product is allowing us to better serve our customer’s tighter cycle times through providing more competitive and on-time transportation services from the Midwest to our customers’ processing facilities on the East Coast.”

Read the full story on how Green Plains leverages rail to grow their business

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