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Variation in the supply and demand of transportation can be disruptive and costly to carriers and shippers alike, and market conditions change frequently. In supplying the cars shippers need to move their grain, railroads must contend with ever-changing volumes and locations of grain shipments. These vary with unexpected market shocks related to yield, weather, buyer demand, local and global supply/demand, among others. Similarly, grain shippers must deal with variation in grain volumes from farmers, as well as variability in rail prices and rail service. These ever-shifting, multiple factors considerably complicate the task of matching supply and demand for rail transportation of grain. The situation generates risk and imposes costs on both shippers and railroads.

Dynamic Changes in Rail Shipping Mechanisms for Grain Summary, August 2020