Moving Grain: Navigation Difficulties Slow Barge Traffic

Barges on Mississippi River. ©Debra L Ferguson

Navigation Difficulties Slow Barge Traffic

Total downbound barge traffic through the locking system of the Mississippi, Illinois, Ohio, and Arkansas rivers has decreased the last three weeks. Water levels have rapidly declined since the flooding and highwater events earlier this year. Lower water levels, aggravated by increased sediments deposited during the flood stages, cause grounding hazards. Several barges have grounded this month.

The U.S. Coast Guard and U.S. Army Corps of Engineers (USACE) issued warnings to mariners to reduce speeds and proceed with caution along portions of the inland waterways. USACE lock maintenance and dredging operations have also caused delays and traffic restrictions in some areas. These navigational issues, combined with recent high barge shipping rates and a low supply of barges upriver, have decreased the number of grain barges and volume of grain transiting the locks.

The number of barges unloaded at the Port of New Orleans has remained high, suggesting increased grain shipments are arriving from elevators south of the locking portion of the river system.

EIA Reports Strong Distillate Production in 2019 and 2020

The Energy Information Administration’s (EIA) most recent Short-Term Energy Outlook reports crude oil prices are expected to remain stable or slightly lower through the end of the year as distillate fuel production rises.

“EIA estimates that distillate fuel yields at U.S. refineries averaged 29.6 percent in July, the highest for any July on record. In both 2019 and 2020, EIA expects refiners to continue increasing distillate yields. This, in combination with rising refinery runs, is expected to lead to record levels of distillate production in both years. EIA expects high U.S. distillate production to support rising U.S. distillate fuel exports to help satisfy global demand for lowsulfur bunker fuel that meets new maritime fuel specifications, which come into effect in January 2020.”

Lower crude oil prices and strong distillate inventories apply downward pressure on diesel fuel rates. Over the past 6 weeks, U.S. average diesel fuel prices have fallen more than 6 cents per gallon.

FMCSA Seeks Comments on Hours of Service Proposed Rule

The Federal Motor Carrier Safety Administration (FMCSA) seeks comments on flexibility within the hours of service (HOS) rule by:

  1. allowing the 30-minute rest break to be satisfied by a driver using on duty, not driving status;
  2. splitting 10 hours off duty in a sleeper berth into two periods;
  3. allowing one off-duty break of at least 30 minutes, but not more than three hours, that would pause a truck driver’s 14-hour driving window;
  4. extending by two hours the time driving is permitted to account for adverse conditions; and
  5. lengthening the short-haul drivers’ maximum on-duty period from 12 to 14 hours and extending the distance limit from 100 to 150 air miles.

The proposed rule, with comments due by October 7, is available here.

Snapshots by Sector

Export Sales

For the week ending August 8, unshipped balances of wheat, corn, and soybeans totaled 13.3 mmt. This indicates a 17 percent decrease in outstanding sales, compared to the same time last year. Net corn export sales reached .056 mmt, up 32 percent from the previous week. Net soybean export sales were negative .110 mmt, compared to the past week. Net weekly wheat export sales reached .462 mmt, down 5 percent from the previous week.

Grain News on AgFax


Rail

U.S. Class I railroads originated 21,402 grain carloads during the week ending August 10. This is a 5 percent decrease from the previous week, 2 percent less than last year, and 3 percent lower than the 3-year average.

Average September shuttle secondary railcar bids/offers (per car) were $150 below tariff for the week ending August 15. This is $125 more than last week and $206 lower than this week last year. There were no non-shuttle bids/offers this week.

Barge

For the week ending August 17, barge grain movements totaled 547,342 tons. This is a 3.5 percent decrease from the previous week and 23 percent less than the same period last year.

For the week ending August 17, 348 grain barges moved down river. This is 20 fewer barges than the previous week. There were 682 grain barges unloaded in New Orleans, 3 percent less than the previous week.
Ocean

For the week ending August 15, 44 ocean-going grain vessels were loaded in the Gulf. This is 47 percent more than the same period last year. Forty-four vessels are expected to be loaded within the next 10 days. This is 19 percent fewer than the same period last year.

As of August 15, the rate for shipping a metric ton (mt) of grain from the U.S. Gulf to Japan was $50.50. This is 3 percent more than the previous week. The rate from the PNW to Japan was $27.75 per mt, 3 percent more than the previous week.

Fuel

For the week ending August 19, the U.S. average diesel fuel price decreased 1.7 cents from the previous week, to $2.994 per gallon. This price is 21.3 cents less than the same week last year.

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