Abnormally low rainfall combined with unusually warm temperatures throughout the central U.S. have led to a significant drop in water levels along the Mississippi River as well as the entire Basin. River gauges throughout the Mississippi River Basin have registered their lowest levels in the past 10 years.
Extended low water levels could have considerable effects on shipments flowing up and down the Mississippi river as the river system accounts for 92% of the nation’s agricultural exports and 78% of the world’s access to feed grains and soybeans exports.
Water levels are disrupting barge traffic along the river, restricting the number of barges and carrying capacity, creating freight price spikes. Rates have increased by 218% from 2021 for shipments on the Mississippi River originating from St. Louis.
Latest logistics update
River levels on the Mississippi have been declining during the past six weeks due to unusually dry conditions during the past few months, especially across the northern portion of the Basin. For summer, the river in some areas is at its lowest level in recent times. There have not been any restrictions on barge traffic or interruptions in traffic up and down this key transportation corridor yet. What is unique is how low the levels are for the middle of July. Normally, river levels tend to bottom out late in summer or early in the fall – late August through early October for example. This was the case in fall 2022 when unusually low river levels caused significant restrictions in barge traffic and impacted the supply chain up and down the river.
With levels already low and a weather pattern that features below-normal rainfall especially in the northern sections of the basin thru the end of July and into August, further reductions are likely during the coming weeks. It appears likely that transportation along the river will be impacted at some point.
July river level at Dubuque is at the lowest level of the past 10 years, at 7.5 feet. In some years mid-July river level is 15 or more feet at Dubuque. The pattern during the next few weeks features well below normal rainfall in the northern portion of the MS River Basin. The longer this situation continues (the current low river levels along with the below normal rainfall forecast in the northern Basin and increasing heat later this month), the higher the risk will be for restrictions and inevitably disruptions in Mississippi River transportation.
Grounded barges create rising costs
Multiple barge groundings and river closures were reported in 2022, particularly in the lower Mississippi River. On October 9, two choke points on the river (near Stack Island, Mississippi, and Memphis, Tennessee) were reopened following several days of closure due to grounded barges. At its peak, these closures caused more than 2,000 barge backups. Similar conditions and closures led to nearly $35 billion (€36 billion) in losses a decade ago.
With continued low rainfall October, 2022, river closures and restrictions became more prevalent.
River logistics thrown into chaos
A wide range of goods moves throughout the Mississippi River Basin. At the lower end of the Mississippi River, shipping moves petroleum and petroleum products, iron and steel, grain, rubber, paper, wood, coffee, coal, chemicals, fertilizer, and edible oils; these goods generally flow north from the Gulf Coast into the interior portion of the central U.S.
The northern end of the Mississippi basin relies heavily on the river for the movement of agricultural goods. Corn and soybeans from the Midwest, one of the most concentrated agricultural belts in the world, move to the Port of New Orleans; these goods generally flow south.
At the southernmost end the ports of South Louisiana and New Orleans account for roughly 500 million tons of shipped goods per year. Sixty percent of all grain exported from the United States is shipped on the Mississippi River through the ports of New Orleans and South Louisiana.
No drought relief in sight
Compounding the problem, low water levels are occurring while harvest season in the Midwest is in full gear. Due to the abnormally dry weather, this harvest is fast paced, one of the fastest rates of harvest in decades. Unlike previous years, the problem is unlikely to be getting crops off the field. Instead, low water levels will make it exceedingly difficult to deliver the crops downriver to markets, particularly overseas.
In response to low water levels and barge delays, companies are attempting to switch freight transportation to rail or truck alternatives, but the capacity of specialized trailers (grains, ore, bulk liquid) for goods simply does not exist. One dry barge tow is equivalent to 16 rail cars, or 70 trucks and one tank barge moves as much as 46 rail cars or 144 trucks of liquid. In a standard 15-barge tow, that equates to roughly 1,100 trucks.
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