Grain transportation came to a screeching halt for weeks after onslaughts of record flooding and round after round of severe storms slammed the nation’s heartland in March. The region is finally getting enough of a break from Mother Nature to let barges resume movement up and down the Mississippi River and its tributaries, from the Midwest to the Gulf Coast. But it’ll be a slow process before traffic is up to full speed.
SONAR Critical Events: Flood-prone assets in the St. Louis area on July 1, 2019.
Barge Progress Report
River levels on the Mississippi have increased throughout the year, slowing barge traffic considerably. Levels at St. Louis have been well above-average and even above 1993 levels at times. The 1993 flood caused the Mississippi River to rise to record levels at many locations, including a 49.6-foot reading at St. Louis on August 1 of that year. On May 23, 2019, the U.S. Coast Guard, U.S. Army Corps of Engineers (USACE), and River Industry Action Committee (RIAC) representatives stopped barge traffic in the St. Louis area when the river gauge exceeded 38 feet. On June 21-22, traffic resumed when levels dropped back close to the 38-foot threshold. However, by June 23, river levels rose enough to force another closure, but most locks have been reopened in recent weeks because of better weather. The only lock still closed is the Costello Lock and Dam at Modoc, Illinois, about 40 miles south of St. Louis. A USACE representative told FreightWaves the water there has to be about five feet lower before the lock can be opened.
No restrictions have been set for northbound vessels, with unrestricted daytime southbound traffic. However, southbound tows are limited to six barges at night. Barge movements are restricted to daylight-only hours on the Mississippi River at Memphis, Vicksburg and Baton Rouge. Due to extreme flooding, the Arkansas River is still closed.
According to a U.S. Department of Agriculture (USDA) report on June 27, barge grain movements on the Mississippi River totaled 161,662 tons for the week ending June 22. This is a 51 percent decrease from the previous week and 85 percent lower than the same period last year. A total of 14,191 barges of grain have been unloaded at ports on the lower Mississippi River so far this year, 17 percent below the three-year average. Year-to-date tonnages of down-bound grain on the Upper Mississippi River (as measured by movements at Mississippi River Locks 27) have totaled 4.0 million tons, 67 percent less than the three-year average. However, some Mississippi River barge tonnage losses have been softened by increases in Ohio River business. Year-to-date tonnages of down-bound grain on the Ohio River (as measured by movements at Olmsted Locks and Dam) were 5.9 million tons, 27 percent higher than the three-year average.
With much drier conditions in recent days, all locks have been reopened on the upper Mississippi and Illinois rivers as of June 27, according to the USACE. RIAC, an association of companies and organizations that are stakeholders in the commercial industry on the inland waterways, has established queue guidelines for tows waiting to move through previously closed portions of the river. RIAC guidelines are helping ease congestion and direct the orderly flow of traffic at locks above St. Louis. While most of the river system is reported open, some tows are still restricted by high water preventing passage under some bridges.
Rail Progress Report
Railroads also have dealt with poor weather and flooded tracks for the past few months. Despite these challenges, the railroads continue to make considerable progress in restoring service. As of June 24, only two segments remain out of service for Union Pacific Railroad (NYSE: UNP), although eight subdivisions were shut down at one point. The company’s June 24 customer announcement noted that flooding conditions continued to impact operations across the southern portion of its network due to high winds and heavy rain that occurred in the previous 24 hours in Arkansas, Louisiana, Missouri and Oklahoma. These outages have caused network delays due to terminal and main line congestion with trains holding in multiple locations. Company officials said customers with shipments around the affected areas can expect delays of 48 to 72 hours. This congestion will likely cause service impacts to customers even in areas not directly affected by flooding. The following subdivisions remain closed based of the June 24 report and latest outage map:
• River Subdivision (Kansas City to Jefferson City, Missouri): Customers on this subdivision have been embargoed.
• Sparta Subdivision (Ellis Grove to Coulterville, Illinois)
SONAR ticker: RTOGR.CLASS1
BNSF Railway (NYSE: BRK.A) has resumed operations at two subdivisions, with a third expected to be restored within the week. However, two remain out of service: the Napier Subdivision in Iowa and Missouri, and the River Subdivision, extending south from St. Louis. On June 17, Kansas City Southern Railway (NYSE: KSU) restored service to its Roodhouse Subdivision, an east-west route near the town of Louisiana, Missouri. Last week, the company also quickly resumed service through the Heavener Subdivision, a north-south route between Neosho and Noel, Missouri.
Year-to-date rail deliveries of grain to lower Mississippi River ports have totaled 22,780 carloads, 117 percent higher than the three-year average, indicating grain shippers have been substituting rail service for barge service. U.S. Class I railroads originated 22,425 grain carloads for the week ending June 15. This is a 6 percent increase from the previous week, 4 percent lower than this time last year, and 1 percent less than the three-year average. Rail traffic (Class 1 U.S. carloads per week) originating by grain (RTOGR.CLASS1) has rebounded nicely since major flooding began in mid-March, evident on the SONAR chart above. However, compared to this time last year volumes are still lagging a bit.
Transportation and Weather Outlook
The National Weather Service (NWS) is forecasting river levels to continue falling in many locations along the Mississippi and its tributaries. According to its June 21 Network Update, BNSF has been working aggressively to fill washouts and re-surface tracks. The railroad anticipates being able to reopen the River Subdivision by mid-July and restore service along the entire Napier Subdivision in late July. Union Pacific had hoped to open its River and Sparta subdivisions by the end of last week, but they remain closed.
According to USDA’s Agricultural Weather Highlights from today, July 1, during the next several days widely scattered showers and thunderstorms will develop across the Great Plains and Midwest. Some of the heaviest rain could fall across the northern Great Plains and upper Midwest, where five-day totals could reach two to four inches in some locations.