River Transportation May Be Next Bottleneck for Grain Shipments

River Transportation May Be Next Bottleneck for Grain Shipments

Transportation consultant says government needs to invest in the highway and river systems

When it comes time to ship the huge corn and soybean crops to U.S Gulf export points, the barge system may be unable to handle the volume as it is already operating at capacity, transportation consultant Walter Kemmsies told Farm Futures on the sidelines of the Oilseed and Grain Trade Summit, Oct. 7-9 in New Orleans.

"I don't think the river is going to take it," he said of the big crops. "I have not seen any major infrastructure improvements in the river."

Related: Private Funds Needed to Fix Locks and Dams

Transportation consultant says government needs to invest in the highway and river systems

For years, the grain industry has been urging the government to invest in repairing and upgrading the waterways system, particularly the locks and dams that control the movement of barges up and down the Mississippi River.

Kemmsies said this year's big crops may overload the barge system. The chief economist at the engineering company Moffatt & Nichols specializes in global trade and transportation. He also advises port authorities and major transportation companies.

The river is critical for grain exports as barges haul grain from the Midwest to export points at the U.S. Gulf.

Related: Analysis: Wider Panama Canal Could Increase Competition for Grain

In June, President Obama signed the Water Resources, Reform and Development Act that authorizes work to revitalize the nation's waterways and ports systems.

In 2012, 565 million tons of waterborne cargo transited the inland waterways, a volume equal to roughly 14% of all intercity freight and valued at nearly $214 billion, according to the Waterways Council.

"I think the river system is operating at capacity," Kemmesies said.

In addition to the rivers, Kemmesies said the highway system also needs attention.

"The highway system has not been upgraded and is not in great shape. The Mississippi River system is not in great shape," he said.

Related: Senators Request USDA Economic Report on Rail Service Shortfalls

Railroads received considerable criticism when they were unable to move grain in a timely manner last winter and have had to regularly report to the federal Surface Transportation Board on improvement they are making.

Kemmsies argues the railroads are doing more to improve operations and capacity than the federal government is on highways and rivers.

"Railroads have put more money into the system than the highway guys have," he said. "When I look at it coldly and analytically I have had a hard time yelling at the railroads for anything. They put money to work."

TAGS: USDA
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