Grain exports to Asia have increased by 29%. The increase is due to increasing population as well as a growing middle class in Asia. Asia accounts for the majority of U.S. grain exports, at 94%. Taiwan is number one in receiving grain exports, and China is second. Asian countries are also increasing the specificity in type of grain they are buying.
Agriculture Demands More Transportation Methods
Grains included are mostly special varieties such as soybeans, usually genetically modified or organic. The average hopper railroad car cannot ship these grains; they must be shipped in standard ISO intermodal boxes. These units are conveniently loaded from rail to ship with a unique locking system. The units make up 21% of America’s agriculture export transport methods. The increase in grain exports has lead to a concurrent increase in shipping unit demand.
Burlington North Santa Fe Railroad is at the forefront of expansion for grain shipment. Since 2002, the railroad has spent approximately $680 million on their yards. Burlington Railroad, owned by Warren Buffett, transports cargo boxes of grains to the West coast, where they are efficiently transferred from rail to ship.
Normal Export Patterns
Grain shipments usually happen on the West Coast from California to Seattle, but now the movement out to the Pacific is gaining speed and momentum. Peter Freidman of the Agriculture Transportation Coalition reported: “for the first time, large volumes of containerized grains are moving from the Midwest to L.A.-Long Beach, as opposed to just Seattle-Tacoma.”
Steel is Preferred Conduit
Because of the importance and growth in grain exports, the specialized steel boxes have a much higher demand than supply right now in the U.S., and the storage container business is working to meet this growing demand. The railroad companies receive many units of electronic commodities as imports from Asia. Now they send units full of grain back as exports, instead of empty boxes.
Cargo units are a necessity for meeting the global demand for food as the world’s populations grows.