US strains to ship record grains

11.12.2017
America's worst traffic jam this northern autumn occurred on the Ohio River, where a line of about 50 miles of boats hauling grains and other products turned into a waterborne parking lot.
 
Such delays are worsening on the nation's waterways, which are critical to commerce for the US, the largest grain exporter in the world.
 
Of the country's $US40 billion in annual grain and soybean exports, about 60 per cent is moved by barges on rivers, including the Ohio.
 
The shutdown, caused by worn or missing sections of a dam, snarled traffic from early September into early November near Paducah, Kentucky.
 
It was the second shutdown in two months there, among the country's busiest locks with about $US22 billion a year of commodities flowing through it.
 
The lock, which has been earmarked for replacement by the Army Corps of Engineers for three decades, is one of many choke points along 25,000 miles of waterways used to transport everything from grains to consumer goods to coal.
 
It is a system increasingly under strain.
 
Surging shipments of soybeans and corn - due to record harvests - are overwhelming parts of the antiquated network and causing more frequent and severe backups, according to interviews with farmers, shippers, grains merchants and barge operators.
 
Reverberations have cut across the US agricultural supply chain - and international markets.
 
This fall, delays in moving crops downriver bumped up grain prices at export terminals along the Gulf Coast, opening up an advantage for global competitors such as Brazil.
 
Most of the country's 239 locks have exceeded their half-century design lives, and nearly half the vessels that use the nation's inland waterways now experience delays, according to the American Society of Civil Engineers.
 
The average delay per lock has nearly doubled on the waterways since the beginning of the century, rising to 121 minutes in 2014 from 64 minutes in 2000, the group said.
 
An October National Waterways Foundation study said a major lock failure in the Midwest could cost shippers $US1.5 billion per year in added costs and overwhelm existing rail and road capacity.
 
Every barge can hold as much grain as 16 rail cars or 70 trucks.
 
The delays here and elsewhere are boosting prices for key goods including soybeans, and eating away at the nation's competitive edge against rival exporters like Brazil.
 
US soybean export prices normally drop in the autumn, as newly harvested supplies flood the market. But the delays caused prices to rise, making it harder for the US, the second-largest soybean exporter, to compete with Brazil, which ranks first.
 
Top soy importer China is expected to buy twice as many soybeans from Brazil in the fourth quarter as it did last year, much of it at the expense of US shipments.
 
Export markets are key for farmers and grain processors due to rising crop yields. In the past two decades, US corn output has outpaced domestic use by 20 per cent, and soybeans by more than 70 per cent.
 
"Being near the river used to be an advantage, but now having to wait on dams and infrastructure is more of a liability to farmers," said Marc Bremer, a farmer in Metropolis, Illinois.
 
Replacing Locks and Dam No. 52 and nearby No. 53 on the Ohio River has been on the US Army Corps of Engineers' to-do list for about thirty years, even as its backlog of other projects has grown.
 
Known as the Olmsted Locks and Dam, the replacement is set to finally be completed next year. Its cost has risen to about $US3 billion from an original estimate of $US775 million.
 
In the meantime, the short-term work to fix the dam continues.
 
 

 

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