Low water levels closed the Mississippi River near Stack Island, Miss., causing a backup of 117 vessels and 2,048 barges in the area as of midday Thursday, Oct. 6, while a shutdown near Memphis, Tenn., caused a smaller logjam, according to the Coast Guard, as reported by Bloomberg. The US Army Corps of Engineers is dredging near Stack Island, and the Coast Guard intends to reopen the waterway with restrictions at some point Friday, Oct. 7.
Ingram Barge Co., the top US barge operator, declared force majeure due to “near-historic” low-water conditions along the Mississippi River. The company said on many river segments, it has reduced its maximum allowable barge drafts and overall tow sizes in an attempt to continue to safely operate.
“Chronic low water conditions throughout the inland river system have had a negative effect on many who rely on the river,” said John Roberts, Ingram CEO. He said low water levels are affecting part of the company’s operations below Baton Rouge, La.
Major barge lines were turning away spot business as they struggle to meet demand for grains, metals, fertilizer, and other raw materials already contracted well in advance. Shipping prices are soaring. Barge rates reached $49.88 per ton on Tuesday, Oct. 4, the highest on record and up nearly 50% from a year ago, according to a government report released Thursday.
“I think the river is the biggest subject of interest,” one fertilizer industry source told Green Markets early in the week. “With the current forecast and pace of harvest, resupply is going to be a problem. I would not be surprised to see terminal tons in place start disconnecting from NOLA and bringing a premium by this time next week, if not sooner.”
The logjam is coming at the worst time, as the soybean and corn harvests are each about one-fifth complete and supplies will start piling up. The river woes, coupled with a soaring dollar, are harming demand for US supplies even with Russia’s invasion of Ukraine still impeding shipments in the Black Sea.
“We’re losing demand because of reduced export capacity,” said Susan David, a grain analyst in St. Louis. “We’re creating piles everywhere.”
“It’s game time,” said Mike Steenhoek, Executive Director of the Soy Transportation Coalition. “We need our supply chain to be operating on all cylinders.”
The corn industry depends on the Mississippi River for moving 65% of its exports. It’s also the most “efficient and cost effective way for the Cornbelt to receive inputs,” said Matt Ziegler, Public Policy Manager at the National Corn Growers Association.
While barge scarcity and rate spikes could be “detrimental” to growers, “I’m not sure there’s much we can do about it,” Ziegler said.
Limited vessel capacity follows freight railroad disruptions earlier this month and ongoing challenges in securing trucks. The nationwide labor crunch is also a problem, as the barge industry is having difficulty hiring and retaining workers, according to USDA.
While many barge users are now looking to rail and truck as alternatives, they may not be that readily available. “In order to move the amount of freight that currently is in transit via barge on the Mississippi, it would require an immense amount of capacity that is unique from an equipment standpoint,” said Charles Roth, an analyst at FTR Transportation Intelligence. “The trailers required to haul grain versus coal and versus bulk liquids are all different. There’s limited options for moving that freight.”
A peaking La Nina is limiting storms coming in from the southwest that would replenish rivers, and any significant relief is unlikely through the first 10 days of November, according to World Weather Inc. President Drew Lerner. “I don’t have a major storm coming up for the balance of the month. I’m a little pessimistic and not feeling good about the situation.”
Two obstinate weather patterns parked over both US coasts are starving the Mississippi River of rain, threatening to push water levels down to their lowest in a decade.
While the river levels typically get lower this time of the year, extreme drought conditions this summer and below-normal rainfall have made the water levels lower than usual, said Jeff Graschel, a hydrologist with the Service’s Lower Mississippi River Forecast Center.