Business/Economy
9:13 pm
Tue January 8, 2013

Shipping Woes Along the Mississippi River

A grain elevator owned by Cargill sits along the Mississippi River in Muscatine, Iowa.
A grain elevator owned by Cargill sits along the Mississippi River in Muscatine, Iowa.
Credit Clay Masters / IPR

With lingering drought keeping the crucial Mississippi River waterway at historically low levels, some projected that barge traffic on the river would come to a scraping halt in early January. It hasn’t proved to be quite as bad – the Army Corps of Engineers now says the river will likely stay open for transportation at least through the month – but many grain and energy industries that rely on sending products up and down the river aren’t yet breathing a sigh of relief.  

A lot of grain begins its journey on farms in Iowa and other Corn Belt states as it makes its way south down the Mississippi.

“This is as low as I’ve ever seen it, so it’s pretty tough to get everything loaded,” said Tim Bly, a Cargill grain elevator manager in Muscatine, Iowa.

Bly said they were already loading far less grain on barges before the traditional winter shutdown that’s normal this far north on the Mississippi.  

“We had to lighten them up to 9-foot draft because of the low water levels, which is about 3,000 to 4,000 bushels difference on a barge – it’s that much less you’re getting on a barge,” Bly said. 

That means more barges have to be used to fulfill contracts and more barges means more money spent on fuel.

Further down the river, south of St. Louis, Mo., barges are still plying, but because the water level keeps forecast keeps changing, many companies can't plan far enough ahead. After all, it takes weeks to ship freight down to the Gulf in southern Louisiana, and even longer to get it on ocean vessels.

“We’re just holding barges back hoping we’ll be able to transport at some time or we’re just light loading the barges,” said Rick Calhoun, president of Cargill’s shipping company. 

Calhoun said in some cases they’ve had to turn away overseas customers, losing their business entirely. Mike Steenhoek, head of the Soybean Transportation Coalition, says this is an especially bad time to be losing grain business. South American farmers are just starting to harvest their crops and global demand is fickle – it will just go elsewhere.

“When the South American harvest comes online U.S. exports drop precipitously – when U.S. harvest comes online, their exports drop precipitously," Steinhook said. "When you have a supply chain disruption this time of year it’s kind of analogous to a supply chain disruption for retailers prior to Christmas.”

And low river levels aren’t just affecting the grain business. Energy sources like petroleum and coal, and fertilizer that moves up the river are all facing shipping uncertainty as well. So what are companies to do?

Chad Hart, an economist at Iowa State University, says shipping freight on trucks is one option. But it’s a lot more expensive and not only hauls a lot less product than a barge, it burns a lot more fuel. Hart says moving commodities on rail is a better alternative, but there’s a problem.

“Rail can be competitive on a cost per mile basis, but you’ve got to go where the rail goes," Hart said. "Just like with barges you’ve got to go where the river goes. But we’ve designed our system along the river.”

The Mississippi runs more than 2,500 miles and spans 10 states. To keep the barges traveling, the Army Corps of Engineers released water in December from Carlyle Lake east of St. Louis. Increasingly, there are calls for the Corps to release waters from reservoirs on the Missouri River, which feeds into the Mississippi, but the Corps says that water is reserved for things like irrigation and recreation. Besides, the Corps says tapping that resource would take an act of Congress.

The Mississippi’s weakest link is farther downriver, between Cairo, Ill., and St. Louis. The Corps of Engineers is blasting rock and dredging river bottom along the rough stretch to make it deeper.

John Kennedy, the mayor of the tiny town of Thebes, Ill., where the majority of the blasting and dredging work is being done, says in his 35 years in town he’s seen a lot on the river.

“Just ungodly stuff on this old river over the years – seen barges sink, hit the bridge," Kennedy said. "(When we were) kids one time we were down here messing around – we watched the barge hit the bridge.”

But one thing Kennedy has never seen is the river as low as it is now.

The national weather service is forecasted that in early February the Mississippi River in Thebes could be too shallow for any barge to traverse. The broader concern is that as the Mississippi dries up, so will some businesses that have long relied on it for transportation. 

KRCU's Jacob McCleland contributed to this report.