GAO Looks at Dredging Issues on the Lower Mississippi River
In July 2017, the General Accountability Office (GAO) released a report titled Inland Harbors: The Corps of Engineers Should Assess Existing Capabilities to Better Inform Dredging Decisions (GAO-17-635). The report addressed dredging issues at 13 inland ports on the Mississippi River between St. Louis, MO, and Baton Rouge, LA, which primarily move agricultural commodities (corn, soybeans, and rice), petroleum products, and crude materials (sand and gravel).
GAO reported that funding constraints are a major issue that limits the U.S. Army Corps of Engineers (Corps) ability to fully address dredging needs at these 13 ports. The report revealed that some stakeholders believe the smaller ports are negatively affected by the Corps’ emphasis on funding ports with higher tonnages.
However, GAO stated in the report the Corps is statutorily required to examine dredging needs based upon national, regional, and local benefits; and to consider other factors beyond tonnage. GAO concluded by saying, “the Corps should inform Congress whether it can adapt its existing tools to address factors for allocating funds from the Harbor Maintenance Trust Fund, and the resources needed to do so.”
Pacific Northwest Grain Inspections Continue to Increase
For the week ending August 3, total inspections of grain (corn, wheat, and soybeans) for export from major U.S. export regions reached 2.3 million metric tons (mmt), up 9 percent from the previous week, down 24 percent from the same time last year, but 20 percent above the 3-year average.
Compared to the previous week, grain inspections increased due to both regional and commodity upturns. For example, grain inspections in the Pacific Northwest (PNW) jumped 35 percent, while overall soybean inspections increased by 39 percent. Week-to-week inspections of grain remained unchanged for wheat and decreased 2 percent for corn.
Mississippi Gulf inspections increased 6 percent from the previous week. Outstanding (unshipped) export sales continued to increase for wheat, but decreased for corn and soybeans.
West Coast Dockworkers Sign 3-year Contract Extension with PMA
On August 4, The International Longshore and Warehouse Union membership voted to ratify a 3-year contract extension with the Pacific Maritime Association (PMA). The contract extension covers workers at 29 ports in California, Oregon, and Washington.
The newly ratified contract will raise wages, maintain health benefits, increase pensions from 2019 through 2022, and replace the current agreement, which was set to expire on July 1, 2019. The new contract extension will help maintain continuous transportation services of agricultural trade along the Pacific Coast.
Snapshots by Sector
For the week ending July 27, unshipped balances of wheat, corn, and soybeans totaled 16.3 mmt, down 23 percent from the same time last year. Net weekly wheat export sales were .146 mmt, down 71 percent from the previous week. Net corn export sales were .037 mmt, down 60 percent from the previous week, and net soybean export sales were .234 mmt, up 43 percent from the past week.
U.S. Class I railroads originated 20,725 grain carloads for the week ending July 29, up 2 percent from the previous week, down 16 percent from last year, and down 6 percent from the 3-year average.
Average August shuttle secondary railcar bids/offers per car were $154 below tariff for the week ending August 3, up $21 from last week, and $750 lower than last year. Average non-shuttle secondary railcar bids/offers per car were $150 below tariff, $206 lower than last year. There were no non-shuttle bids/offers last week.
For the week ending August 5, barge grain movements totaled 848,330 tons, 4 percent higher than the last week, and down 25 percent from the same period last year.
For the week ending August 5, 541 grain barges moved down river, up 4 percent from last week, 633 grain barges were unloaded in New Orleans, down 1 percent from the previous week.
For the week ending August 3, 37 ocean-going grain vessels were loaded in the Gulf, unchanged from the same period last year. Forty-six vessels are expected to be loaded within the next 10 days, 26 percent less than the same period last year.
For the week ending August 3, the ocean freight rate for shipping bulk grain from the Gulf to Japan was $37 per metric ton, 1 percent less than the previous week. The cost of shipping from the PNW to Japan was $19 per metric ton, 1 percent less than the previous week.
During the week ending August 7, average diesel fuel prices increased 5 cents from the previous week to $2.58 per gallon, 27 cents higher than the same week last year.