Fuel Surcharges Derail Grain Shipments as War-Driven Prices Soar

Railroad fuel surcharges on U.S. grain shipments have skyrocketed to record highs, squeezing farmers during the harvest season.

The average fuel surcharge rate for grain shipments rose to 48 cents per mile per rail car in mid-September, a 153% increase from the same period last year, according to USDA data.

With higher per-mile rates, surcharges now account for 11% of total rail transportation costs for shipping corn and soybeans, compared to 5% a year ago. This means farmers are taking a hit on their already thin profit margins.

Fuel prices have surged due to the ongoing war with Iran, pushing diesel fuel costs above $6 per gallon. Brent oil futures also reached a high of $104 per barrel last week, exacerbating the problem.