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Mississippi River bottlenecks being cleared

Over 2,000 boats, barges were stranded as low water level prompted closings by Victoria Cavaliere Bloomberg News (TNS) | October 10, 2022 at 4:00 a.m.

A backup of more than 2,000 boats and barges on the Mississippi River is being cleared as two closures along the waterway reopened Sunday.

Low water levels had halted commercial shipments of commodities, including recently harvested corn and soybeans, in the latest supply chain snarl that came in the middle of the autumn harvest and amid prolonged local drought.

By Sunday, the river had reopened at two choke points: near Stack Island, Miss., and near Memphis, the U.S. Coast Guard said.

Currently, there is no line of vessels near Memphis, though there are restrictions there to one-way traffic. In Mississippi, the lines of barges and vessels north and south is down to fewer than 900, the Coast Guard said.

On Friday, the backup along the river stood at more than 2,000 at various points. The U.S. Army Corps of Engineers has been dredging near Stack Island to make water levels deeper.

With water levels low along the Mississippi's critical shipping lanes, companies have been scrambling to find alternate ways to move everything from metals to fertilizers to agriculture products. This has raised costs and made U.S. cargoes more expensive when food inflation is already at its highest level in four decades.

The drying Mississippi echoes logistics headaches around the world this summer, including on the Rhine River in Germany, in what scientists say is a Northern Hemisphere drought worsened considerably by climate change.

In 2012, the Great Plains drought led to $35 billion in losses for the U.S., including closing the river at least three times. In 2020, the total value of domestic commerce that moved from Minneapolis to the mouth of the river was almost $70 billion, according to the Corps of Engineers.

The timing couldn't be worse because barges have been busy carrying recently harvested corn and soybeans up and down the river, two of the top-three most heavily transported commodity products. Futures prices were little changed for the week, but the soybean cash basis, which better reflects how much farmers will get for their crops, sank to the lowest level in GeoGrain data going back to 2003.

In 2019, more than 65 million tons of soybeans passed along the river from Minneapolis to its mouth on the Gulf of Mexico, U.S. Department of Transportation data show. Distillates -- which include diesel fuel -- ranked second in total shipments. The Army Corps estimates that the Mississippi carries 589 million tons of freight a year, which creates a $12.5 billion annual transportation savings, according to USACE spokesperson Lisa Parker.

The blockages are forcing companies to find other methods to move goods, while some are postponing planned loadings by barge until conditions improve. Shippers are already seeing costs rise for rail and truck transport.

A prolonged disruption will have heavy implications for the U.S. economy. Barge transport is cheaper than rail and truck and has a smaller environmental impact. Delays mean coal shipments to fire power plants may not reach their destinations in a timely fashion, potentially raising electricity costs for consumers. It also means more traffic gridlock on U.S. highways and higher costs at the gasoline pump.

One hopper barge carries as much dry cargo as 16 rail cars or 70 trucks, so one 15-barge tow keeps 1,050 trucks off the highways. Barges move liquids effectively, too: one tank barge moves as much as 46 rail cars or 144 trucks, according to the Upper Mississippi Waterway Association.

A spike in truck demand comes at an inopportune time. The September jobs report showed a sizable decline in truck transportation payrolls. Aside from a pandemic-related plunge in April 2020, the 11,400 slump last month was the largest since 2009.

Information for this article was contributed by Sophie Caronello of Bloomberg News (TNS).

Print Headline: Mississippi River bottlenecks being cleared

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