Although water levels on the Mississippi are showing no signs of an upturn, barge pricing stabilized in the past week and restrictions at one of the largest barge shipping companies have not gotten any tighter.
The weekly Grain Transportation Report published late last week by the Department of Agriculture (USDA) showed barge rates slipping slightly to 549 from 556. The rates are quoted as a percentage of a base rate set to the year 2000, which represents 100.
However, even though 549 is less than the prior week, it is still way up from where it was earlier in September. For the report of Sept. 20, the average barge rate was 466. A week earlier, it was 425.
And while some measurements of the Mississippi are reporting near all-time low water levels, the rate of 549 last week is about 52% of last year’s rate for the first week of October, which came in at 1,045.
The latest USDA report includes a third-quarter summary of barge movements. One possible reason why barge rates have not soared as high as last year could be steps the industry has taken in reaction to last year’s shipping crisis.
“The U.S. Army Corps of Engineers has preemptively dredged, and since June, barge companies have imposed load restrictions to prevent barges from being grounded in low water, as they were last year,” the report said.
The report also had other indications that barge movements had not worsened. In its summary of barge activity through Sept. 30, the USDA reported that barge grain movements totaled 376,787 tons, up 92% from the prior week and 19% more than the corresponding period last year.
Translated into actual barges, the weekly report said 296 grain barges moved downriver in the week that ended Sept. 30, up 163 from the prior week.
There is little good news on water levels. At St. Louis, the National Weather Service reported Oct. 8 levels at minus 1.5 feet, which is a foot-and-a-half less than a baseline. On Oct. 4, it was minus 0.6 feet.
At Memphis, the Oct. 8 figure was minus 10.2 feet. That was down slightly from a few days earlier but was better than the Sept. 28 figure of minus 10.6 feet. However, at both St. Louis and Memphis, the river level forecast in coming days is sloping down.
The USDA report noted that although low water levels on the Mississippi River System (MRS) started to become a problem in June, low demand for grain export sales kept barge rates in check. Between the week ending July 8 until the end of the quarter, grain volumes moving downriver on the MRS were 3.9 million tons, down 35% from a year earlier and 53% less than the five-year average, according to the Agriculture Department report.
American Commercial Barge Lines (ACBL), one of the largest operators on the MRS, has had unchanged restrictions since late September. The key features of its restrictions are reducing loading drafts by 28% northbound between the Gulf of Mexico and Cairo, Illinois, where the Ohio river feeds into the Mississippi, and 24% southbound from Cairo to the Gulf. Its update said those restrictions are cutting the weight of about 400-600 tons per barge northbound and 400-500 tons southbound.
Tow size is limited to five widths, which is a reduction of anywhere from 17% to 38% from normal, ACBL said. That number has not changed in several weeks.
Loading drafts at St. Louis are being reduced 32% and tow size is reduced to four-across barges from St. Louis to Cairo, ACBL said. That also is unchanged.
“If low-water conditions in the MRS continue, lack of precipitation may lead to increased restrictions, which would further shrink an already tight barge supply,” the USDA said in its third-quarter summary. “The rising harvest demand and shrinking barge supply may lead to above average spot rates that approach last year’s record rates.”
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