Barge freight drops as rain, snow replenish US Midwest rivers
Barge freight rates on the Ohio River and the lower Mississippi River fell to their lowest levels in at least four months after recent rains replenished the drought-reduced waterways and weakened demand for freight, trade sources said.
The higher river levels meant that grain elevators could load more cargo on each barge so they did not need to lease as many to haul the same volume of corn, soybeans or wheat to export terminals at the U.S. Gulf Coast, they said.
Freight rates further north on the mid-Mississippi and Illinois rivers were also lower, but to a lesser degree, as river forecasts showed a more gradual decline than had been expected earlier this week along a critical stretch of the Mississippi between St. Louis and Cairo, Illinois.
Spot freight bids for barges on the lower Ohio River slipped to 350 percent of tariff while spot bids on the Mississippi from Memphis to Cairo were 250 percent of tariff, both down 100 points from a week ago, industry sources said.
On the Illinois River, spot bids were 550 percent of tariff, down 50 points from last week, while at St. Louis bids were down 25 points at 475 percent of tariff, they said.
"Instead of nine-foot drafts they're able to load 12-foot drafts and that's 600 more tons of revenue. The grain guys didn't think these high rates were justified so they quit bidding," a barge broker said, referring to the Ohio and lower Mississippi.
"The St. Louis market on the Mississippi and the Illinois market are still a struggle because they're loading nine-foot drafts and there are delays," he said.
At Mississippi River Lock 27 north of St. Louis, vessels were delayed by one to two days as the main lock chamber was closed for repairs, so vessels were moving through the smaller alternate lock chamber, a lengthier process.
As of about 4:00 p.m. CDT (2200 GMT), there was a queue of 14 southbound and 15 northbound vessels waiting to pass through Lock 27, an Army Corps spokesman said.
The U.S. Coast Guard is halting barge traffic near Thebes, Illinois, for 16 hours a day every day for at least the next month as the Army Corps of Engineers removes river-bottom rock that poses a risk to boats when the river is low. Vessels are still able to pass, but may be delayed by a day or more.
Dire forecasts earlier this month for a complete shutdown of barge traffic on the mid-Mississippi River due to low water appear to have been averted for the moment, Gregory Page, chief executive of agribusiness giant Cargill Inc, said on Wednesday.
Heavy snow and rain were forecast for the upper Midwest late this week and that would help replenish rivers somewhat. (Reuters)