November 29, 2012 / 11:46 PM / 5 years ago

US grain shippers cut loads as Mississippi River drafts decline

* Barge lines cut drafts to 8 feet from normal 9-12 feet

* Each foot of reduced draft cuts cargo by 200 tons

* River to drop further so shipping may stop completely

By Karl Plume

Nov 29 (Reuters) - U.S. grain exporters have slashed by up to 50 percent the weight of cargo shipped by barges on the Mississippi River to the Gulf of Mexico due to low water on a critical stretch of the waterway after the worst drought in 56 years, grain traders and barge operators said on Thursday.

Barge companies, including Ingram Barge, have informed exporters that the draft has been reduced to 8 feet from the normal 12 feet for shipments on the Mississippi River north of Cairo, Illinois, which means 800 tonnes less in cargo loaded on barges.

“That’s a sizable chunk of cargo,” said John Kindra, head of the Illinois River Carriers’ Association and president of Kindra Lake Towing.

He said exporters would have to pay extra in freight charges because of the draft restriction.

Less cargo allows barges to ride higher on the water but also increases costs to ship products such as grain, steel, coal and fertilizer as more barges are needed to haul the cargo and barge tow boats would burn more fuel making more frequent trips.

Reduced water from the Missouri River, which flows into the Mississippi River at St. Louis, was expected to cause the already-low Mississippi to drop by several more feet in the coming weeks.

The prime area of concern is from St. Louis south to Cairo, Illinois. Rocks on the river bottom at two locations along that stretch will become increasingly dangerous for boats as the river recedes, and the river could effectively be closed to navigation if it gets as shallow as current forecasts suggest.

Shippers have also been scrambling to move goods up and down the river ahead of any shipping disruption.

“In preparation of the possible low water levels expected around December 10, we have had a number of shippers advance their schedules in order to get shipments through this area in advance of the low water,” said Daniel Mecklenborg, senior vice president of Ingram Barge Company.

Ingram Barge this week reduced allowable drafts to 8 feet for any barges that will transit the area upriver from Cairo, which would include any barges loaded along the Illinois River.

Under normal river conditions, fully loaded barges on the Mississippi contain about 1,500 tons of cargo and have drafts of about 12 feet. On the Illinois, barges are regularly loaded to about a 9-foot draft, or about 900 tons.

Barges lose about 200 tons of capacity for each foot of reduced draft.

Shipping could come to a complete halt if drafts are limited even further as only a few tow boats can operate in such shallow conditions.

At least 90 percent of the tow boat fleet on the Mississippi requires drafts of at least 9 feet, although they may operate with as little fuel in their tanks as possible to ride slightly higher on the water. (Reporting by Karl Plume and K.T. Arasu in Chicago; editing by Jim Marshall)

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