For those who make their living along the Mississippi River, helping ship many of the country’s most vital commodities, this year’s drought has inevitably raised the specter of 1988. That’s when the river got so low that barge traffic came to a standstill — and the industry lost $1 billion. Unfortunately, 2012 could be worse.
Along the 2,500 miles of the Mississippi, America’s most important waterway, signs of the country’s worst drought in 50 years can be found at almost any point. Near Memphis, the river is about 13 ft. below its normal depth, according to the National Weather Service. In Vicksburg, Miss., it’s more than 20 ft. below. Overall, the river is about 13 ft. below normal for this time of year — that’s 55 ft. below last year’s flood levels.
Those levels have forced barge, tugboat and towboat operators to drastically change how they move goods up and down the river. And as the river dries up, it gets narrower and shallower. The narrowness forces barges to sail more closely past each other, often slowing their speeds. Some sections have become so narrow that only one-way traffic has been able to move through.
At the same time, the shallowness of the Mississippi has forced shippers to load less cargo onto barges because of fears they’ll run aground. The Army Corps of Engineers is tasked with making sure that the channel is at least 9 ft. deep so ships can safely pass.
Lynn Muench, senior vice president of American Waterways Operators (AWO), a national trade association for the industry, says that in a normal year, many tows south of St. Louis would be loaded to 12 ft. or more of draft (essentially the distance from the ship’s waterline to the bottom of the vessel) and made up of some 45 barges linked together. “Now they’re down to 9 ft. of draft,” she says. “One inch of draft in a single barge is about 17 tons of cargo, and that’s almost enough to fill a semitruck.” Combine that with carrying about 30 barges instead of the more typical 45 and the drought is decreasing the cargo carried per tow by more than 500 semitrucks’ worth of goods.
The benchmark year that everyone in the industry is talking about is 1988, when a drought brought hundreds of barges to a standstill and caused about $1 billion in losses. “I remember there were times when it was a dead stop,” says Merritt Lane, CEO and president of Canal Barge Co. “Some areas became so shallow that they weren’t economically passable. You could move so little cargo, you just can’t go.”
Muench also cites 1988 as the only time in recent memory that could compare with this summer. “For the last two or three weeks, the phrase I keep hearing is, ‘Close to 1988. Worse than 1988. Same as 1988,’ ” she says. “The estimate was that the industry lost over $1 billion. And that doesn’t include any of the ripple effects. There’s a real possibility that it’ll be worse this year.”
Some estimate that closing the river to traffic could lead to losses of about $300 million a day, which would then grow exponentially after a few days. The cost of running an idle tugboat is about $10,000 daily, largely due to fuel costs, says Muench. One tow company says it’s been losing about $500,000 a month since May.
The $180 billion barge, tugboat and towboat industry transports just about anything you can think of that comes in bulk: petroleum, grain, fertilizer, sand, gravel, mulch, steel. “The building blocks of the nation are on our barges,” says Muench. About 60% of the country’s grain exports and one-fifth of its coal is transported along the nation’s inland waterway system, according to the AWO.
The economic costs that come from shipping delays and lighter loads could eventually trickle down to consumers. The AWO estimates that transporting goods via waterways costs $11 a ton less than by rail or truck. If those products are moved to other modes of transportation, the costs for consumers will likely rise.
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Canal Barge Co. carries commodities such as petrochemicals and oil. CEO Lane says that while his company hasn’t calculated how much money has been lost this summer, it has lost revenue opportunities. “That’s money we’ll never see again that didn’t come in the door,” he says.
So far, the Mississippi remains navigable. The Army Corps of Engineers says that as of July 27, the only part of the route closed to barge traffic is the port at Lake Providence in northern Louisiana. The corps is busy dredging stretches of the river to ensure that the Mississippi stays at least 9 ft. deep throughout. Ironically, the money for the dredging operations is coming from a relief act worth $20 million that was passed to help repair damage from last year’s flooding.
Even though the Mississippi is near record lows in some places, Major Rob Wolfenden of the Vicksburg district says the Army Corps doesn’t expect the river to become unnavigable this summer. But without significant rainfall, which isn’t in any long-range forecasts, things are likely to get worse. As summer turns to fall, the weather tends to get drier. Lower temperatures generally mean fewer thunderstorms and less rainfall.
“Take away the thunderstorm mechanism and you run into more serious problems,” says Alex Sosnowski, expert senior meteorologist for AccuWeather.com. And while droughts tend to be a temporary setback, longer-range forecasts are troublesome. Sosnowski says he is anticipating an El Niño weather pattern next year, which would mean below-normal snowfall and above-average temperatures.
The mighty Mississippi — long the country’s most powerful economic waterway — may take a while to regain its strength.