Winter weather rumbles barge traffic, conditions improve – AgFax

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Winter weather slows barge traffic, but conditions improve

In many northern locations (including the upper Mississippi), harsh winter conditions have created impediments to downbound barge traffic over the past month. However, the weather and logistics are showing signs of improvement.

For the week ending Feb. 12, downward barge grain movements through the Mississippi Locks fell to 426,106 tons, down 38% from the same week last year and 29% below the average of the previous 5 years. Similarly, cold weather and ice created delays on the Illinois River, as all locks required operators to practice ice couplings (i.e. a way to join barges together with frozen water).

On the Upper Ohio River, too, ice made it difficult for barges to move up and down, creating delays. In St. Louis, low water forced barge operators to reduce both the size and weight of tows. Despite all of these lingering challenges, the industry is optimistic that shipping will continue to improve in mid to late February as warmer temperatures arrive.

USDA research compares US and Ukrainian logistics in corn export

The USDA Agricultural Marketing Service recently summarized research conducted in cooperation with North Dakota State University. The research report is titled Logistics Competition for US and Ukraine Corn Shipments to Targeted International Markets. Researchers examine and compare the relative advantages and disadvantages of the United States and Ukraine in major corn export markets.

Both countries had advantages in major markets. From 2015 to 2019, the United States had a logistical advantage over Ukraine by serving China and South Korea (from the United States Gulf) and Japan (from the Pacific Northwest (PNW)) . However, for most of the 2015-2019 study period, Ukraine was China’s main corn supplier.

The study authors suggest that Ukraine’s dominance likely reflects China’s diversification goal, its willingness to pay a premium for non-US-origin corn, and its desire for less transparent trade mechanisms. Ukraine had a cost advantage over the United States in serving the European Union (EU) and Indonesia.

However, this advantage was mainly due to the additional 25% tariff applied by the EU to maize imports from the United States, as well as EU restrictions against imports of genetically modified maize.

FMCSA extends HOS waiver for transportation of fuel in the Midwest

On February 3, the Federal Motor Carrier Safety Administration (FMCSA) extended a regional emergency order rescinding Hours of Service (HOS) regulations for drivers of commercial vehicles transporting petroleum products and propane. The major grain-producing states affected by the order are Illinois, Indiana, Iowa, Kansas, Minnesota, Michigan, Missouri, Nebraska, North Dakota and South Dakota.

The HOS waiver is largely to ensure an adequate supply of propane and petroleum products, needed to continue processing and drying harvested crops. The waiver is extended until March 8 or the end of the emergency, whichever comes first. The order was originally issued on January 7.

Insights by sector

Export sales

For the week ending February 3, unshipped balances of wheat, corn and soybeans for the 2021/22 marketing year totaled 38.7 million metric tonnes (mmt), down 26% from the same period last year and 1% compared to the previous week.

Maize net export sales were 0.589 mmt, down 50% from the previous week. Net soybean export sales were 1.596 mmt, up 46% from the previous week. Weekly net export wheat sales were 0.085 mmt, up 47% from the previous week.

Rail

US Class I Railroads shipped 23,517 grain cars in the week ending Feb. 5. This is down 6% from the previous week, 10% lower than last year and 3% higher than the 3-year average.

The average February shuttle side car deals/offers (per car) were $38 higher than the rate for the week ending February 10. That was $633 less than last week and $229 less than this week last year. There were no offers/offers other than the shuttle this week.

Barge

For the week ending February 12, grain movements by barge totaled 426,106 tonnes. This was 27% less than the previous week and 37% less than the same period last year.

During the week ending February 12, 270 grain barges sailed down the river, down 93 barges from the previous week. There were 823 grain barges unloaded in the New Orleans area, 31% more than last week.

ocean

For the week ending Feb. 10, 32 ocean-going grain ships were loaded in the Gulf, down 33% from the same time last year. Over the next 10 days (from February 11), 53 ships were expected to be loaded, which is 15% less than the same period last year.

As of February 10, the shipping rate for one metric ton (mt) of grain from the US Gulf to Japan was $65.00. It was 7% more than the previous week. The Pacific Northwest rate in Japan was $36.00 per tonne, 6% higher than the previous week.

Fuel

For the week ending February 14, the average price of diesel fuel in the United States rose 6.8 cents from the previous week to $4.019 per gallon, 114.3 cents higher than the same week l last year. At $3.884 per gallon, the average price of diesel in the Midwest has risen 40.7 cents over the past 6 weeks.

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