More coal exports for the Lower Miss?

Waterborne cargo traffic that transits the deepwater portion of the Lower Mississippi River, particularly through the Head of Passes to the Gulf of Mexico, is a relatively good indicator of the overall health of the shallow-draft barge sector north of Baton Rouge, La.  

Annual cargo statistics for the Head of Passes show that total tonnage has increased from about 220 million tons in 2007, to nearly 230 million tons in 2011.

Waterborne traffic on the deepwater segment of the Lower Miss is largely made up of petroleum and farm products, which accounts for about two-thirds of the total volumes. These commodities have been largely stagnant thus suggesting that the Lower Miss traffic base has also been treading water.

However, during this period the big traffic change came from coal, which essentially doubled from 13 million tons in 2007 to 27 million tons in 2011.  Nearly all Lower Miss coal exports are barge transshipments.

 The expected growth from China and other Asian markets coming from the expansion of the Panama Canal will enlarge the competitive reach of the Lower Miss and the brownwater component north of Baton Rouge for such bulk cargo exports such as coal. 

Also, deepening the Lower Miss to about 50 feet, which will be consistent with the expanded Panama Canal, will enhance the competitive position of the Lower Miss and the barge sector. Currently, it is now locked out of the Asia trade because of the capacity limitations of the Panama Canal.  

Coal exports will be very important, particularly for China and the rest of Asia. Japan is increasingly moving to replace its idle nuclear plants with refitted coal burning facilities. 

It’s estimated that Japan’s coal imports could grow as much as 20% over the next decade as nuclear plants are replaced with coal-fired generating plants. U.S. West Coast ports and the Lower Miss will compete for these markets.

The combination of a larger Panama Canal and a deeper Lower Mississippi might lead to an increase in the barge industry’s coal transshipments through the Lower Miss.  

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