The closure of the waterway hindered shipping
The Mississippi River is at its lowest level in a decade because of a severe drought in the Midwest. This vital waterway is closed to barge traffic at a critical time of the year for American crops.
As of Friday, 144 ships and 2,253 barges were lined up because of the closure, the Coast Guard reported. Low water also caused eight barges to run aground last week.
The report predicted that air routes would not resume until Oct. 14 at the earliest.
The crisis has echoes of the dramatic drop in the Rhine River in Germany in August.
Factories along the Rhine rely heavily on barges for transport. Since August 12, the water level in the middle reaches of the Rhine River has fallen below 40 cm, and in some cases even lower, causing severe disruption to inland waterway transport in Germany.
The Mississippi River, a vital American waterway, also carries vital commodities between America's heartland and the Gulf Coast.
Experts expect the situation to worsen in the coming week with no sign of relief as barges become stranded and transport traffic is blocked.
It is understood that the Mississippi River is the fourth longest river in the world and the largest river in the United States, with a total length of more than 6,000 kilometers. Its basin area accounts for 41% of the local area of the United States and flows through 31 states of the United States. It is also one of the busiest commercial waterways in the world.
At present, inland waterway transportation is still the main mode of freight transportation in the United States, especially for agricultural products.
According to the Bureau of Transportation Statistics, about 5 percent of all cargo in the United States by weight and distance traveled is transported by river barges. Shippers have few affordable alternatives to river barges.
The Mississippi River Valley is responsible for 92 percent of the nation's agricultural exports, especially during harvest time. The waterway is a major artery for U.S. crop exports and commodity shipments. Oil, fertilizer and imported steel also pass through parts of the waterway.
Ingram Barges, the largest barge operator in the US, recently told customers it would not be able to deliver goods on time because of force majeure on cargo shipments as low water levels disrupted normal operations across rivers.
The blockade has forced companies to find other ways to transport goods, such as metals, agricultural products and fertiliser, while some have delayed planned barge loadings until conditions improve. Shippers have seen rail and trucking costs rise.
Barge capacity plummeted and freight rates soared
U.S. supply chains have been struggling to recover from disruptions since the outbreak began two and a half years ago, and West Coast ports, a key port for moving goods, remain clogged. The closure of this vital corridor has led to further deterioration of an already troubled supply chain.
Even when the Mississippi River resumes traffic, barges will carry 20 percent less cargo than normal to avoid navigating too deep in the water. Because the waterway is more narrow, no more than 25 barges can pass at a time, instead of the usual 30 to 40 barges at a time.
Mike Seyfert, CEO of the National Food and Feed Association, said the total barge capacity on the Mississippi was also reduced by about 50 percent before the recent complete closure because of fewer barges per trip and fewer loads per barge.
That has sent the rates shippers pay soaring. Barge rates hit $49.88 a tonne on Tuesday, up nearly 50% from a year ago and the highest on record, according to the latest government report.
The US Department of Agriculture shocked markets at the end of September when it reported lower-than-expected US wheat and corn supplies and higher-than-expected soyabean stocks.
The drought has pushed up barge rates, making corn in the United States exceptionally expensive. Higher prices and reduced supplies could prompt the USDA to cut its forecast for U.S. exports. With inventories still tight, any reduction in yield or crop size will cause market volatility.
