Monday, September 22, 2014
Oil-by-rail continues to stall shipment of U.S. grain bumper crop
The shale-oil boom is backing up rail lines to ports, which will likely cause shipping lines to miss out on exports from this year’s record U.S. grain harvest.
Although U.S. will reap the highest grain crops in history, fourth-quarter export cargoes will be 15 percent lower than last year, according to RS Platou Markets AS, a Norwegian bank specialized in shipping. Rates for Panamaxes, most routinely used for grains, averaged $7,574 a day this year, headed for the lowest level since 1999, Baltic Exchange data indicate.
Energy shipments are dominating rail at the expense of grains. The Association of American Railroads says crude moved by rail almost doubled last year and the Energy Department is predicting the most oil output in 45 years in 2015.
"If you’re an owner, you’re banking on a bumper season of exports," Erik Nikolai Stavseth, an analyst at Arctic Securities ASA in Oslo. "The fact you see a situation where grains don’t come to the port: that’s a negative surprise for the shipping market."
For more of the Bloomberg story: www.bloomberg.com
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