Low Mississippi River Levels and 2000 Barge Logjam Send Barge Prices Soaring

Race Against Winter

The northern sections of the Mississippi River are shutting for winter. Meanwhile low water levels has created a 100-ship backup downstream.

Bloomberg reports Grain Shippers Slowed by Mississippi River Drought Also Race Against Winter

While it’s normal that barges stop moving each winter when the river freezes, the low water levels have left more than 2,000 barges downriver waiting to pass sections near Stack Island, Mississippi, and Memphis.

“There’s always this race to get something unloaded in the northern areas — Iowa, Wisconsin, Minnesota — and have it back before the drawbridge closes behind you due to cold weather and ice accumulation,” said Mike Steenhoek, executive director of the Soy Transportation Coalition. “That becomes all the more tricky when the river isn’t functioning as efficiently as normal.” 

Shippers need the barges to get up north to drop off fertilizer and pick up one last load of corn or soybeans before heading south for winter. If they can’t, thousands of bushels will be stranded unless space can be found on more-expensive trains to the Pacific Northwest or the Gulf Coast, or until spring.

It doesn’t help that the corn and soybean harvests are lagging behind last year’s pace. Corn is just 20% harvested as of Oct. 2, and soybeans 22%.

There are two results if barges are slower to get upriver, according to Peter Meyer, Platts head of Grain and Oilseed Analytics. “The first is that barge freight goes way up, as we are seeing, it’s just skyrocketing. The second one is that supplies get backed up upriver and this could not happen at a worse time now that we are in the middle of harvest.”

Mississippi Barge Snag Forces Goods Onto Pricey Rail, Truck

Yahoo!News reports Mississippi Barge Snag Forces Goods Onto Pricey Rail, Truck

Shippers are scrambling for other ways to move goods after low water levels on the Mississippi River have forced barge companies to stop taking orders for immediate delivery of everything from metals to agricultural products to fertilizers.

Now, companies are paying a premium to move steel, aluminum and other goods by rail and truck, despite cost that are up to five times more than what they’d normally pay by barge. Shipments of coal and petroleum also have been rerouted, but these other modes of transportation aren’t an effective solution.

“The beauty of our navigable rivers is that they are capable of transporting heavy freight, like soybeans and grain, long distances in an economical manner” Mike Steenhoek, executive director of the Soy Transportation Coalition, said in an email. “One 15 barge tow has the same freight capacity as 940 semi-trucks. However, this efficiency is predicated on normal water conditions, which, unfortunately, do not currently exist.”

Barge Traffic Standstill 

gCaptain reports Mississippi River Barge Backlog Swells as Water Levels Shrink

Commercial barge traffic on southern stretches of the Mississippi River was at a standstill on Tuesday as low water levels halted shipments of grain, fertilizer and other commodities on the critical waterway,shipping sources said.

The supply chain snarl comes just as harvesting of corn and soybeans, the largest U.S. cash crops, is ramping up and as tight global supplies and strong demand for food and fuel have sent inflation soaring.

Around 100 tow boats hauling some 1,600 barges were lined up for miles waiting to pass through one trouble spot near Lake Providence, Louisiana, that has been largely closed since late last week, shipping sources said.

Shippers have been loading less cargo per barge so vessels sit higher on the water, and towing companies have reduced the number of barges per tow by nearly 40% as the low water conditions narrowed the navigable channel.

Many U.S. Gulf exporters have pulled offers for corn and soybeans loaded in October and November as it is unclear if they can source enough grain, threatening already sluggish export sales.

“We can’t commit to new sales right now,” one exporter said.

Force Majeure Due to Low Water on Mississippi

Finally, please note Ingram Barge Declares Force Majeure Due to Low Water on Mississippi

Ingram Barge Company, one of the country’s largest barge shippers, said Thursday it was “providing formal notice of a force majeure event” as low water on the Mississippi River disrupted its operations on the major shipping waterway.

The declaration would affect the portion of Ingram’s operating network at locations downriver from Baton Rouge, Louisiana, Ingram Barge Chief Executive John Roberts said in an emailed statement.

This post originated at MishTalk.Com

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