High Water Slows Navigation on the Upper Mississippi and Illinois Rivers
Recent rain events in the Midwest have raised Mississippi and Illinois River levels to high water conditions. Parts of the Illinois River are at flood stage resulting in reduced tow sizes and slower transit times. The Mississippi River at St. Louis is expected to crest at 27.3 feet on April 9.
This will exceed the 25 foot trigger reading, which limits down-bound barge traffic through St. Louis to daylight only, reduces tow sizes, and implements minimum horsepower requirements for towboats. River restrictions are set by the Waterway Action Plan (WAP), a joint effort of the U.S. Coast Guard, U.S. Army Corps of Engineers, and senior leaders of the towing industry.
The overall goal of the WAP is to ensure safety of life and navigation, protection of infrastructure and property, and prevention of marine casualties.
Ocean Freight Rates Inched Up
Ocean freight rates increased in March. The rates for shipping grains from the U.S. Gulf to Japan, at $38.35 per metric ton (mt), increased 7 percent from February. The rates from the Pacific Northwest (PNW) to Japan, at $20.75 per mt, increased 13 percent over the month. According to March 30 Transportation Report by O’Neil Commodity Consulting, increased demand for coal and iron ore/steel due to “restocking” caused the uptick in the rates.
Grain Inspections Continue to Fall
For the week ending March 30, total inspections of grain (corn, wheat, and soybeans) for export from major U.S. export regions reached 2.62 million metric tons (mmt), down 3 percent from the previous week, but up 39 percent from the same time last year, and 23 percent above the 3-year average.
Corn inspections decreased 6 percent from the past week, while wheat and soybeans increased 3 and 1 percent respectively from the previous week. Pacific Northwest (PNW) inspections decreased 9 percent from the previous week, and Mississippi Gulf inspections increased 3 percent. Outstanding export sales (unshipped) decreased for corn, wheat, and soybeans.
Ocean Container Carriers Form New Alliance Structure
As of April 1, the ocean container carrier alliance structure was reorganized from 4 alliances to 3. The new structure will bring larger vessels, fewer port calls, and changing origin/destination port calls. For the transpacific trade lanes, the first vessels under the new structure left Asia on April 2 and will arrive in the United States approximately 10 days later.
The trade media has reported a surge in cargo movements ahead of the April 1 deadline to avoid any possible disruptions from the changing dynamics. The agricultural export community is concerned the newly formed alliances and their use of larger vessels will reduce voyage options as well as cause terminal and landside congestion.
Snapshots by Sector
For the week ending March 23, unshipped balances of wheat, corn, and soybeans totaled 30.9 mmt, up 57 percent from the same time last year. Net weekly wheat export sales were .464 mmt, up 11 percent from the previous week. Net corn export sales were .717 mmt, down 47 percent from the previous week, and net soybean export sales were .681 mmt, up 29 percent from the past week.
U.S. Class I railroads originated 23,312 grain carloads for the week ending March 25, unchanged from the previous week, up 22 percent from last year, and up 13 percent from the 3-year average.
Average April shuttle secondary railcar bids/offers per car were $321 below tariff for the week ending March 30, down $540 from last week, and $104 lower than last year. Average secondary non-shuttle railcar bids/offers per car were $38 below tariff, down $13 from last week, and $38 lower than last year.
For the week ending April 1, barge grain movements totaled 850,682 tons, 20 percent lower than the last week, and up 39 percent from the same period last year.
For the week ending April 1, 535 grain barges moved down river, down 20 percent from last week, 840 grain barges were unloaded in New Orleans, up 6 percent from the previous week.
For the week ending March 30, 50 ocean-going grain vessels were loaded in the Gulf, 52 percent more than the same period last year. Fifty-three vessels are expected to be loaded within the next 10 days, 13 percent more than the same period last year.
For the week ending March 30, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $39.00 per metric ton, 3 percent more than the previous week. The cost of shipping from the PNW to Japan was $21.25 per metric ton, 4 percent more than the previous week.
During the week ending April 3, average diesel fuel prices increased 3 cents from previous week at $2.56 per gallon, 44 cents higher than the same week last year.