Dwindling Mississippi Grounds Barges, Threatens Shipments

(Bloomberg) — A backlog of more than 100 ships, tugboats and their barge convoys in the shrinking Mississippi River threatens to disrupt trade in grain, fertilizer, metals and petroleum.

The largest US launch operator warned customers that it could not keep up with deliveries. The Ingram Barge Company, in a letter to customers, declared force majeure due to “nearly historic” low water conditions on the Mississippi River, the primary route to bring US grain and soybeans to world markets.

The drought has lowered the water level along the largest US waterway so much that ships are running aground. The Coast Guard is responding to stranded vessels in at least two locations, near Stack Island in Louisiana and upriver near Memphis, according to a statement.

Covered barges full of grain and soybean float from US farmlands to Gulf of Mexico terminals, while crude oil, refined products and imported steel also navigate stretches of the waterway. According to the National Park Service, about 60% of all grain exported from the United States is shipped down the Mississippi River through the Port of New Orleans and the Port of South Louisiana.

The blockade comes at the worst possible time as soybean and corn harvests are each about a fifth complete and supplies are beginning to pile up. The river’s troubles, coupled with a rising dollar, are crushing demand for US supplies, even as Russia’s invasion of Ukraine still hampers supplies to the Black Sea.

“We’re losing demand because of reduced export capacity,” Susan David, a grain analyst in St. Louis, said by phone. “We stack everywhere.”

The Coast Guard said there was a queue of 122 ships at Stack Island and 15 ships at Memphis. Due to increased grounding, the number of towing vehicles will be limited.

Meanwhile, problems are emerging with fertilizer shipments, which farmers rely on to grow crops for next year, as nutrients for growing food have skyrocketed and Hurricane Ian disrupted production at a Mosaic Co. fertilizer plant. temporarily suspended in Florida.

“The Mississippi River is critical to the fertilizer transportation network,” said Alexis Maxwell, an analyst at Bloomberg Intelligence.

According to World Weather Inc. president Drew Lerner, a La Nina peak will limit storms coming from the southwest that would refill the rivers, and significant relief is unlikely in the first 10 days of November.

“No major storms are forecast for the rest of the month,” Lerner said. “I’m a bit pessimistic and I don’t feel comfortable with the situation.”

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