Washington Watch

Drought hits barge industry hard, but it could be worse

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 markets.

They had some interesting observations:

• 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.”