Worn-out waterways

Aging infrastructure is causing more shipping disruptions on U.S. rivers.

After a seemingly endless snowy winter and record-high water levels, river terminal teams in the Midwest have been eager to see the 2019 shipping season get underway. As barges make their way up and down the Mississippi River, producers and agribusinesses hope for an uneventful season. But with many locks and dams approaching their 90th birthdays, failing systems are likely to cause disruptions.

“A lot of people worry about catastrophic failures,” says Greg Oberle, CHS Global Grain Marketing, who manages the CHS grain terminal at Savage, Minn. The terminal is on the Minnesota River, which feeds into the Mississippi. “Any delays that affect shipping season hurts producers and cooperatives.”

Showing Their Age

Most of the locks and dams along the Mississippi, which are maintained by the U.S. Army Corps of Engineers, were constructed in the 1930s and built with an estimated lifespan of 50 years. Insufficient funding has delayed maintenance and replacements. While new systems are expensive — building Olmstead Lock and Dam, which replaced Locks 52 and 53 on the Ohio River, cost $3 billion — failures are even more costly.

“When a lock-and-dam system is shut down or fails, the impact is felt up and down the river,” says John Engelen, vice president, CHS Government Affairs.

Ursa Farmers Cooperative in Illinois ships 95 percent of its grain by barge, says Scott Meyer, the co-op’s grain merchandiser. “When lock-and-dam problems arise, they are taking longer to fix and are occurring more frequently because the aging infrastructure is deteriorating. As a result, barge companies start charging more to pick up grain.”

In crop year 2018, the U.S. exported 2.4 billion bushels of corn, according to the USDA, and about 772 million bushels, or 32 percent, were transported through the lock-and-dam system on the upper Mississippi, Illinois and Ohio rivers.

Barges are the least expensive way to move cargo, compared with rail and trucking, says Ben Doane, barge freight merchandiser, CHS Global Grain Marketing. Barge travel is also more fuel-efficient and environmentally friendly, with significantly fewer carbon dioxide emissions, Doane adds.

River transportation also reduces traffic congestion and wear-and-tear on roadways and maintains America’s economic competitiveness, says Oberle.

“The U.S. river system is the link between producers and the global marketplace,” says Doane. “Inland waterways provide U.S. producers with agricultural competitiveness in world markets.”

While failing locks and dams are a major concern, that’s not the only issue the aging infrastructure is causing. Many locks are too small to handle large tows, so the barge chains must be broken down to get through, which adds time and costs, says Meyer.

River Closures

Repairs are necessary, but even planned river closures cause problems with movement of grain, crop nutrients and other freight. Beginning in July 2020, four locks and dams on the Illinois River will close for 90 to 120 days, cutting the river’s shipping season nearly in half. “We’ve built quite a bit of storage to prepare for the closures,” says Meyer, “but we’ll still need to move some grain by truck, which will cost more.”

CHS has five terminals on the Illinois River and all of them will be affected by the closures. “There’s only so much we can control, so we need to concentrate on what’s in our power,” says Oberle. “If we don’t start taking care of the river infrastructure now, it’s going to fail at the worst possible time. Our owners and customers rely on our ability to provide grain at a reasonable cost, which means we need to continue to improve efficiency and reliability.”

Funding Needed

The CHS Government Affairs team in Washington, D.C., works to educate policymakers about the need for waterway infrastructure funding. “We look for every opportunity to leverage our message,” says Engelen. That includes working with groups like the Waterways Council, Inc., which consists of 175 shippers, unions, farm groups and barge operators who advocate for well-maintained inland waterways.

As Congress addresses fiscal year 2020 funding bills, the CHS team is urging policymakers to adequately fund river infrastructure programs, says Engelen, including spending proceeds in the Inland Waterways Trust Fund, which is generated by a diesel fuel tax paid by commercial operators.

CHS and other shippers also are opposing proposals to privatize locks and dams, which could lead to new tolls and fees.

“Our strongest asset is the voice of our owners,” says Engelen. “We encourage owners to talk with elected officials about the impact the aging infrastructure has on farms and businesses.”

“A healthy river is good for everyone and results in better competition,” adds Meyer. “When we can’t ship via the river, that affects all producers.”