CHICAGO Scrapyards, commodity shippers and terminals along the Mississippi River are preparing to move material by rail and truck instead of via barge, despite the higher cost, as low water levels are threatening to close the river to commercial navigation in less than two weeks.
Shippers fear that river transportation will slow or stop completely because the U.S. Army Corps of Engineers has maintained its annual practice of scaling back water flow from the Gavins Point Dam on the upper Missouri River above Sioux City, S.D.
"The Corps did reduce seasonal flow," Sue Casseau, spokeswoman for the Army Corps of Engineers St. Louis district, confirmed. "We wont feel the effects of that (at St. Louis) until around the first of December."
Elected officialsincluding members of Congress and the governors of Illinois and Missourihave written to Jo-Ellen Darcy, assistant secretary of the U.S. Armys Civil Works office, who also has been lobbied by affected industries, including steel (amm.com, Nov. 16), but Casseau said the Army Corps of Engineers has not been instructed to amend its operating plan.
"At this point, we have not been directed to do anything more than maintain the nine-foot navigation channel, 300 feet wide, and it has been maintained so far. The navigation depth is still adequate," she said. "When we get to below five feet (at the St. Louis gauge), the rock pinnacles at Thebes (Ill.) will be exposed and the Corps will not be able to maintain its depth or 300-foot-width minimum in the channel."
Casseau advised shippers to check the Army Corps of Engineers website for gauge readings, which are updated daily.
But most barges and the tugboats that push them cannot navigate a seven-foot-deep channel between St. Louis and Cairo, Ill., where the lowest water will be found in the next couple of weeks.
"We need a nine-foot draft. We need the President to order the Army Corps to move the water level two more feet," said Debra Colbert, senior vice president of Arlington, Va.-based trade group Waterways Council Inc. (WCI). Meanwhile, "shippers are waiting to see what happens. They are investigating the cost to move cargo on rail and truck."
Citing the severity of the situation, Colbert said WCI and American Waterways Operators, another Arlington-based trade group, have reached out to the governors of Illinois and Missouri, asking them to declare a state of emergency, "which would trigger a presidential declaration of emergency. I think both governors are considering this option."
WCI also has contacted the Federal Emergency Management Agency "to get them to make a presidential declaration to release more water from the Missouri."
The Arms Corps of Engineers and the U.S. Coast Guard are not closing the river, Colbert said, "but there are restrictions, so it is closed to us."
"The options of using the river have diminished," said Cap Grossman, president of St. Louis recycler Grossman Iron & Steel Co. "The dock we usually use cannot load anything anymore, so we have to go elsewhere to get to a nine-foot draft."
With flow restricted from the Missouri River, Grossman said, projections are pretty dire. "Right now, we are shipping a lot more by rail," and he expects that to continue into the spring even though "rail car availability will be seriously tested."
As for the hit to the industrys bottom line, "the cost of moving by rail is double and triple what going by water is," Grossman said. "This wont bode well for the steel industry, which is barely breaking the 70-percent capacity utilization (rate)."
The Institute of Scrap Recycling Industries is working with the National Association of Manufacturers and others "to try to address this issue," and has asked members to report how the rivers closure would affect operations, including the volume of scrap, potential costs and job lossesinformation that will help ISRI to "effectively make the case to the Army Corps and the White House."
A spokeswoman for one Illinois terminal operator said employees worked through the Thanksgiving holiday weekend to get metallurgical coal off the water for use by a local steelmaker "so they dont have to shut down production" when riverborne coal shipments stop. The terminal unloaded double the usual number of barges last week.
"We are trying to get every barge we can below Cairo so we dont get stuck," Marty Hettel, senior manager of bulk sales for St. Louis-based AEP River Operations, told AMM Tuesday. "We have had people cancel loadings out of St. Louis for export. We have had people looking to reroute product bound for Chicago, to find capacity on the Ohio River and then rail it to Chicago."
Industries ship 7 million to 8 million tons per month between Cairo and St. Louis, Hettel said. "We need 2,500 rail cars or 10,000 trucks a day" to make up for barge loads, "and they are not available. How many open cars can handle" hot-briquetted iron, direct-reduced iron and scrap? "What this river ships per day is phenomenal."
Hettel said his company has been preparing for the Mississippi Rivers closure for nearly three weeks because the lack of navigation between St. Louis and Cairo will stop "everythingexport and importcutting off all of the Illinois River from Peoria (Ill.) to Chicago. Unless the man at 1600 Pennsylvania Avenue declares an emergency, the shutdown will happen."