Flooding Disrupts Barge Traffic and Raises Rates

This article has been reprinted from the March 15, 2018 USDA Grain Transportation Report.

During the first quarter of 2018, less-than-ideal navigation conditions have affected the barge industry, including ice accumulations and both low and
high water conditions at different times throughout the quarter.

Year-to-date grain barge shipments are 35 percent lower than last year and 18 percent lower than the 5-year average.

Figure 1 shows the average weekly grain barge tonnages for the first 10 weeks of 2018 compared to the five-year average for the same period.

Barge freight rates were relatively steady for most of the first quarter.

However, the recent high water events slowed barge logistics, tightening the barge supply while raising spot rates. 

As of March 13, barge spot rates for export grain at major origin locations increased 46 to 62 percent in the last two weeks. 

For example, on March 13, the spot barge rate for export grain at St. Louis was 458 percent of tariff ($18.27 per ton), 54 percent higher than 297 percent of tariff ($11.85 per ton) reported on February 27. 

The current rates are at levels not seen since early October 2017, during the corn and soybean harvest.

During the first half of February, stretches along the Mississippi River System faced low water conditions, as portions of Iowa, Missouri, and Illinois experienced moderate to severe drought conditions.

However, river conditions drastically changed during the last half of February when persistent rains fell from the middle to lower Mississippi River Valley, eastward to the Ohio River Valley. 

This sparked flash flooding and pushed creeks and streams out of their banks, bringing extensive flooding to major rivers in the area. 

By February 25, the Ohio River between Cincinnati, OH, and Evansville, IN, reached its highest water level since March 1997. 

At the same time, high water events also occurred on the Illinois and lower Mississippi rivers. 

The high water created hazardous navigation conditions on both rivers that, in some cases, temporarily closed a few locks and dams operated by the U.S. Army Corps of Engineers (Corps) or required restricted barge operations. 

Navigational restrictions, such as daylight only movements, are set by the Waterway Action Plan, which is a joint effort of the U.S. Coast Guard, Corps, and senior leaders of the towing industry.

Following is a brief description of river conditions at various locations. 

Figure 2 shows selected locations related to the 2018 floods. 

Ohio River. 

During the flooding peak, several locks on the Ohio River were closed. 

However, by March 12, all locks closed by high flows were re-opened. 

The last lock to re-open was Smithland Lock and Dam (L&D). 

The Ohio River level at Cairo, IL, where the Ohio River flows into the
Mississippi River, crested at 54.8 feet on March 3. 

River levels are forecast to remain above flood stage until March 18.2 

The 54.8- foot crest was the tenth highest on record for Cairo, with the highest
being 61.7 feet on May 2, 2011.

Illinois River. 

As of March 14, normal operating conditions are returning to most of the Illinois River. 

The Illinois River at La Grange L&D crested at 26 feet on March 7. 

This was about 9 feet short of the record crest of 35 feet set on July 2, 2015. 

Upcoming scheduled repairs will close LaGrange Lock from March 23 to 28, and from April 2 to 6.

Upper Mississippi River. 

Rain events have not impacted the Upper Mississippi River as considerable portions of the river are closed during the winter. 

There has been a gradual northward opening of the river as temperatures rise ice accumulations melt. 

As of March 14, the northern-most report of barge traffic on the Mississippi River is at Lock and Dam 10, near Dubuque, IA.

Lower Mississippi River. 

Most of the high water issues for the central U.S. have abated and moved
southward to the lower Mississippi River, causing high water conditions. 

There are no locks on the lower Mississippi River, which typically allows barge tows of 30 to 40 barges compared with 15 or less on the upper. 

However, with the high water conditions presently occurring on the lower Mississippi River, barge companies have reduced tow sizes to 25 to 30 barges. 

In addition, based on the Waterway Action Plan, the U.S. Coast Guard is now only allowing southbound barge movements during daylight hours through
Memphis, Vicksburg, and Baton Rouge. 

Some industry sources suggest that this may persist for the remainder of March.