3:46am

Wed January 9, 2013
Business

Mississippi River Level Disrupts Supply Chain

Originally published on Wed January 9, 2013 5:26 am

Transcript

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RENEE MONTAGNE, HOST:

And I'm Renee Montagne. Good morning.

The drought is hurting farming operations in much of the Midwest and Southwest, and its next possible victim: barge traffic on the Mississippi River. There were fears that shipping on this crucial cargo route could come to a halt as early as this week, when water levels reach historic lows. But the Army Corps of Engineers says the river will likely stay open for shipping at least until the end of the month. Still, many businesses that send products up and down the river remain concerned about what the future holds.

Iowa Public Radio's Clay Masters begins his report along the river.

CLAY MASTERS, BYLINE: I'm standing along the snowy banks of the Mississippi River in Muscatine, Iowa. There's some light flurries in the air. Some geese are flying overhead. The water's about 10 feet deep here, but there are no barges moving on the river

TIM BLY: This is as low as I've ever seen it. So this is - it's pretty tough to get everything loaded.

MASTERS: That's Tim Bly, who manages this grain elevator owned by ag-giant Cargill in Muscatine, Iowa, along the Mississippi River. Standing on a windy levee, he wears a bright yellow vest, hard hat and has a thick, coal-black beard. Bly says they were already loading far less grain on barges before they stopped the traditional winter shutdown that's normal this far north on the Mississippi.

BLY: We had to lighten them up to a nine-foot draft because of the low water levels, which is about three or 4,000 bushels difference on a barge. It's that much less you're getting on each barge.

MASTERS: And that means more barges have to be used to fulfill contracts. Further down the river, south of St. Louis, barges are still plying the river. But because the water level forecast keeps changing, many companies can't plan far enough ahead.

Rick Calhoun is the president of Cargill's shipping company.

RICK CALHOUN: We're just holding barges back, hoping that we get enough water that we're able to transit at some time, and we're light-loading the barges.

MASTERS: Calhoun says in some cases, they've had to turn away overseas customers, losing their business entirely.

Mike Steenhoek heads the Soybean Transportation Coalition and says this is an especially bad time to be losing grain business. South American farmers are just starting to harvest their crops and global demand is fickle. It will just go elsewhere.

MIKE STEENHOEK: When the South American harvest comes online, U.S. exports dropped precipitously. And when the U.S. harvest comes online, their exports drop precipitously. So when you have a supply chain disruption at this time of year, it's kind of analogous to a supply chain disruption for retailers prior to Christmas.

MASTERS: And it's not just grain: energy sources like petroleum and coal, fertilizer that moves that up the river, all are facing shipping uncertainty, as well. So what are companies to do?

Chad Hart is an economist at Iowa State University, and says shipping freight on trucks is one option, but it's a lot more expensive, and not only hauls a lot less product than a barge, it burns a lot more fuel. Hart says moving commodities on rail is a better alternative, but there's a problem.

CHAD HART: Rail can be competitive on a cost-per-mile basis. But you've got to go where the rail goes, just like with barge, you got to go where the river goes. But we've designed the system around the river.

MASTERS: This is a river that runs more than 2,500 miles and spans 10 states. To keep the barges traveling, the Army Corps of Engineers released water last month from Carlyle Lake, just east of St. Louis. Increasingly, there are calls for the Corps to release waters from reservoirs on the Missouri River. It feeds into the Mississippi. But the Corps says that water is reserved for things like irrigation and recreation. And tapping that resource would take an act of Congress.

(SOUNDBITE OF RUSHING WATER)

MASTERS: Further down river, between Cairo, Illinois and St. Louis, is the Mississippi's weakest link. Here, the Army Corps is blasting rock and dredging river bottom to make it deeper. John Kennedy is the mayor of Thebes, Illinois a tiny town where the majority of this blasting and dredging work is being done. In his 35 years here, he's seen a lot on the river.

MAYOR JOHN KENNEDY: Just ungodly stuff on this old river over the years I've been here, you know. I've seen barges sink, hit the bridge. We was kids, one time we were down here messing around, and actually watched a barge hit the bridge

MASTERS: But one thing Kennedy has never seen is the river this low. The National Weather Service is forecasting that early next month, the Mississippi River in Thebes could be too shallow for any barge to traverse. The broader concern is that as the Mississippi dries up, so will some businesses that have long relied on it for transportation.

For NPR News, I'm Clay Masters. Transcript provided by NPR, Copyright NPR.

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