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Mississippi River water levels hit historic lows, throw shipping logistics into disarray

by Nathaniel Smith | October 14, 2022

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.

Grounded barges create rising costs

Multiple barge groundings and river closures have been reported in recent days, 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 forecast throughout October, river closures and restrictions are likely to become more prevalent for the foreseeable future.

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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