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National & World Ag News Headlines |
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Mississippi River Sees Grain Barge Glut
USAgNet - 02/27/2017
A glut of idled river barges is clogging Mississippi River shorelines from St. Louis to New Orleans, leaving U.S. barge companies that haul grain, coal and other bulk goods counting their losses. Even with record-large exports of corn and soybeans, typically a
boon for shippers that haul grain to Gulf Coast export terminals, the collapse of coal shipments to the lowest levels in decades has left the dry bulk barge fleet chasing too little cargo.
In pursuit of rising grain volumes since 2014, many shippers expanded their fleets too quickly, reports Reuters.
Barge lease rates paid to companies like Archer Daniels Midland Co's American River Transportation Company, privately held Ingram Barge and a handful of smaller operators are at 1-1/2-month lows and more than 30 percent below the five-year average for
February. Rates from St. Louis to the Gulf Coast of $8.40 per ton are down from a pre-harvest high of $18.00 - not enough for many barge companies to turn a profit.
A rise in grain shipments has not been enough to offset the steeper decline in coal shipments. Grain barge shipments rose 21 percent from 2012 to 2015 to a near-record 89.7 million tons, but coal shipments dropped by nearly 47 million tons in that period, to
126.2 million tons. The U.S. Army Corps of Engineers, which tracks barge traffic, has not yet released data for 2016.
Demand for barges is at "historically weak levels," barge maker Trinity Industries Inc told analysts on a conference call last week. Orders for new barges in the fourth quarter totaled just $18 million, compared with $190 million in the fourth quarter of 2015.
Some barge lines are paying companies to lash their mothballed vessels along river banks rather than lose money keeping them active, according to barge brokers. At least 11 percent of the fleet was idled this winter, a number that could double by spring as
South America's harvest competes with the United States for exports, according to industry estimates.
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