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River movement of grain imperiled

October 9th, 2014 / By: / Industry News

According to a report by Reuters, a record harvest, low barge availability and a deteriorating lock-and-dam system are putting a strain on U.S. river transportation.

Citing years of neglect, industry sources tell the news service the system is only one flood, drought or mechanical breakdown away from calamity.

Expanding truck and rail needs of the booming crude-oil industry are forcing grain producers to turn to river transit to move their goods, the report says. According to the U.S. Department of Agriculture, grain shipments so far this year on rivers in the Midwestern crop belt are nearly double what they were a year ago.

Exacerbating fears, concerns about transportation bottlenecks have eroded prices that farmers receive for their grain, reduced the competitiveness of U.S. supplies in the global marketplace. The resulting elevated expenses for food and energy producers could be passed on to consumers. South American and Eastern European grain suppliers are undercutting U.S. prices, and shipments of corn out of Ukraine are the cheapest in the world, $8 a ton less than U.S. grain.

Ken Eriksen, senior vice president for transportation at Informa Economics, told Reuters the fleet of barges available to move grain has shrunk to around 10,500 from a peak of around 12,700 in the mid-1990s. Grain producers are facing competition for the remaining covered barges from shale oil producers who haul sand needed for hydraulic fracturing.

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