NASHVILLE, TN – Rail fuel surcharges are hitting grain shippers harder this month, with Class I railroad charges averaging a record 61 cents per mile, weighted by grain carloads, according to the Grain Transportation Report.
The July average is up two cents from June and tops the previous record set in September 2008. The increase follows a sharp rise in diesel prices since late February. Average rail fuel surcharges are now up 43 cents per mile since March.
Relief may come in August. Most Class I railroads base fuel surcharges on the national diesel price from two months earlier. That price fell from $5.60 per gallon in May to $5.02 in June.
The report also notes a Union Pacific complaint regarding BNSF Railway switching rates, including grain unit-train locations in Nebraska, Iowa, and Texas. Those rules matter because corn and soybeans often move in 110-car shuttle trains.
Norfolk Southern service metrics also worsened after a Tennessee ethanol derailment and severe Midwest storms. The affected line links eastern Corn Belt grain areas with Southeast processors and livestock feeders.
Farm-Level Takeaway: Higher rail fuel surcharges can increase grain movement costs, even as August may bring some relief in transportation costs.