Low Water Levels on Mississippi River Threatens Shipments
A logjam of ships, tugboats and barges due to low water levels on the Mississippi River is threatening to grind trade of grains, fertilizer and other goods to a halt, Bloomberg reports. Ingram Barge Company, the largest U.S. barge operator, declared force majeure in a letter to customers due to “near-historic” low water conditions on the Mississippi River. As of Wednesday afternoon, the Coast Guard said there was a queue of 122 vessels at Stack Island and 15 vessels at Memphis. Due to increased groundings, the number of vessels in tow is being restricted.
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USDA’s Grain Transportation Report notes, “In recent weeks, barge carriers and shippers have dealt with increasingly severe low water levels—reducing shipping capacity and resulting in record rates. Beginning in July, the average level of the Mississippi River at New Orleans was well below the 5-year average and continued to drop. With lower water levels, vessel operators and shippers have had to use lighter loads per barge because of draft restrictions and fewer barges per tow. American Commercial Barge Line said tonnages per southbound barge have been reduced by 20% to 27%. Moreover, the number of barges per tow have been reduced by 17% to 38%. The industry has also experienced groundings and intermittent outages. As of Oct. 4, the cost per ton to ship from St. Louis to the Gulf was $90.45/ton, up 218% from last year and up 379% from the 3-year average.
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Over the past 5 weeks (week ending October 1), 2,466 barges have been unloaded in New Orleans, down 25% from the 5-year average. Further compounding these issues, the U.S. Coast Guard is implementing speed and overnight-hour restrictions on the Lower Mississippi River, from mid-October to mid-November, to accommodate a pipeline removal. However, some industry analysts believe the impacts of the additional closures and other restrictions may be overshadowed by already reduced navigability from historically low water levels.”
