Drought hits barge industry hard, but it could be worse
January 8, 2013
Barge traffic on the upper
Mississippi has slowed due to low water and though the latest news is
encouraging, traffic still may be halted later this month. Though this sounds
ominous, things could be worse for the barge industry and grain exporters.
Officials at the U.S.
Department of Agriculture who put out its weekly Grain Report are keeping close
tabs on how the historically severe and widespread drought conditions are
affecting the movement of commodities along the inland river system and beyond.
They concluded in their final
issue of 2012 that despite the difficulties, the U.S. transportation system has
rallied to the challenge and has kept goods moving to the domestic and world
They had some interesting
- Despite reduced
crop sizes due to drought, 2012 grain exports (as of Dec. 20) were only 11
percent lower than last year. Soybean exports increased 27 percent, which
helped offset the lower corn and wheat exports.
- Despite lower
exports due to adverse navigation conditions, Mississippi Gulf exports are
expected to end the year only 4-5 percent lower than 2011.
- Barge freight
rates along the Mississippi were at or below average during the first half of
the year, but have since risen above average because of reduced barge drafts
due to low water levels.
There is still a lot to worry
about, however. The barge industry is concerned that without congressional or
presidential intervention to provide more water to the drought-stricken area of
the river, barge operations will essentially stop. This is because most
towboats can’t operate at less than a 9-foot draft.
In a press release issued
this morning, the American Waterways Operators and the Waterways Council Inc. reacted
to recent statements from Sen. Dick Durbin, D-Ill., and the Army Corps of
Engineers which indicate that the Mississippi River will be able to sustain
navigation through the end of January for towboats and barges at a 9-foot
draft, as rock pinnacle removal work at Thebes, Ill., has gone better than
expected. The Corps has also released additional water from the Carlyle
Lake Reservoir to augment water depth on the mid-Mississippi.
The AWO and WCI said they are
grateful for the efforts of the Obama administration, Sen. Durbin, and others
who have stressed the importance of maintaining barge traffic on the Mississippi.
However, the barge industry continues to seek assurances that all options to
maintain navigation without further restrictions on draft remain on the table,
noting that certainty is particularly important, with long-range forecasts
continuing to show water levels on the Mississippi dropping to historic lows,
AWO and WCI said.
“The Corps’ progress in
removing rock formations and providing additional water releases is a positive
development,” Tom Allegretti, AWO’s president and CEO, said in a statement.
“However, we are not out of the woods, and further assurances are needed to
provide industry with certainty that is needed for sound business and
transportation planning beyond January.”