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Transportation Research Board - 1/13/14

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Transcript of Transportation Research Board - 1/13/14

U.S. Department of Agriculture Perspective on Transportation Constraints to Agriculture Exports
Adam Sparger
Agricultural Marketing Service
Transportation Services Division
Transportation Research Board
93rd Annual Meeting
Washington, D.C.
January 13, 2014
= -$729.6 billion -
Trade Deficit

$1,545.7 billion
- Exports

-
$2,275.3 billion
- Imports

2012 Balance of Trade
Agriculture

Specialty
Waste Products
Petroleum
Machinery
Food
Paper
Textiles
Secondhand
Printing
Newspaper
Chemicals
$129 Billion
Trade Surplus, 2012
$30.5 Billion (24% of Surplus)
United States
Department of
Agriculture
U.S. Relies on Transportation Advantages
to Compete Globally

Exports from Mississippi, Texas, and East Gulf ports:
56% of grains
42% of fresh fruit and vegetables
24% of beef
20% of poultry
7% of pork
Exports from Pacific Northwest ports:
28% of grains
24% of dairy
18% of beef
18% of fresh fruit and vegetables
16% of pork

Exports from Great Lakes ports:
1% of grains
Exports from California ports:
56% of beef
52% of dairy
50% of pork
27% of fresh fruit and vegetables
7% of poultry
Exports from Northeast ports:
11% of dairy
9% of pork
4% of beef
2% of poultry
2% of fresh fruit and vegetables


Exports from Southeast ports:
69% of poultry
18% of pork
11% of beef
11% of fresh fruit and vegetables
11% of dairy
Why is China purchasing U.S. soybeans when Brazilian soybeans are being offered much cheaper?
In 2013, Brazil's transportation system was overwhelmed.
60% of soybeans move by truck, with distances up to 1,200 miles over unimproved roads
15 mile-long line of trucks waiting to unload at ports
Vessel loading delays at ports were up to 90 days
Freight prices increased 68% in one year
Buyers switched to U.S. soybeans
Brazilian producers are 20% less profitable because of transportation inefficiencies (Brazilian National Confederation of Agriculture).

But they are modernizing.
If surface transportation infrastructure continues to deteriorate at current rate, by 2020:
Total exports of goods projected to be $20 billion less
Agriculture will lose $1.3 billion in exports
If waterway infrastructure continues to deteriorate:
Total exports of goods projected to be $42.8 billion less
Agriculture will lose $3.6 billion in exports

American Society of Civil Engineers -
Failure to Act
Series
Agriculture most affected by a decline in waterborne trade
Challenges for waterborne commerce:
Scheduled and unscheduled delays caused by insufficient funding for operation and maintenance needs of locks
Inadequate channel depths and widths due to drought and sedimentation
Barges and vessels may be loaded to less than capacity, requiring more vessels
Access to shallow ports is restricted
Low water and unfunded dredging requirements increases risk of vessel groundings
Challenges for truck commerce:
Vehicle size and weight restrictions
Hours-of-service rules
Roadway congestion
Constrained capacity
Driver and equipment shortages
Challenges for rail commerce:
Rail capacity reaching limits
Agriculture competes against higher value goods, such as crude oil
Agriculture pays premium for rail service
Intermodal / Containerized Ag Exports
Intermodal is fastest growing segment in rail
Waterborne containerized grain exports increased six-fold to 6.6 million ton average in 2007-2010 from 2000-2003 average
Waterborne containerized ag exports as a percentage of total increased from 14% in 1998 to 25% in 2012
Benefits
Containerized grain is ideal for Identity Preserved Grains
Density of grains is ideal for intermodal shipments
Containerized agriculture is better suited for smaller shipment sizes or for areas without specialty unloading facilities
Container prices competitive with traditional bulk
Opportunity to take advantage of empty containers returning to export markets
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