Local ports face second straight season without barge traffic

Local ports face second straight season without barge traffic


Traditionally a bustle of activity in the spring, the Missouri River docks at Big Soo Terminal are now silent.

A lingering drought in the upper Midwest, along with a continuing fight over management of the Mighty Mo, has grounded navigation upstream to Sioux City. Big Soo and other local ports face a second straight season without barge traffic.

The loss of navigation has been a blow to Siouxland businesses that rely on navigation to deliver products like fertilizer, steel and asphalt, forcing them to divert more shipments to more-costly rail and truck. If they pass those added costs on to customers, the price of a host of consumer products could increase, from nitrogen farmers apply on corn fields to building materials for new homes and roads.

"It impacts a lot more people than most folks realize..." said Dave Bernstein of Sioux City-based State Steel, which has used barges to transport large steel coils up the river. "All of those items have a big transportation component. When it costs more to get them here, they cost more."

Some local businesses fear rail lines will gain a near-monopoly on shipping if barges stay grounded. Rail lines recently tacked on surcharges to cover rising fuel prices.

Rates for hauling asphalt up the river is about half the cost of tranporting the material by rail, said Corky Bailey of Jebro Inc., which has an asphalt terminal in the Bridgeport Industrial area. The company distributes asphalt to road builders in Iowa, Nebraska, South Dakota and Minnesota. In mid-April, Jebro's rail rates jumped 54 percent, not counting the fuel surcharges, Bailey said.

"I don't know if it has anything to do with the river or not -- the rail lines won't say if it has anything to do with the river -- but our rail rates are sure going up like a rocket," he said.

Calling their industry a key cog in the success of the regional economy, Missouri barge interests have fought for years to maintain consistent flows for upstream navigation. They've been opposed by some environmental groups looking to protect endangered species and upstream recreational interests that want more water kept in a series of reserviors in Montana, North Dakota and South Dakota.

Caught in the middle is the U.S. Army Corps of Engineers, which controls the Missouri, and has been considering changes to its master plan that historically has favored navigation.

Driven by uncertainity over future flows, Missouri barge traffic has declined significantly since the mid-1990s. Prior to that time, Big Soo Terminal had averaged 160 barges annually, Knepper said. During the last decade, that number slipped to 75 to 100 per year, he said. In 2003, the terminal unloaded just a handful of barges and last year there were none, the first time that had happened since the river was straightened and deepened in the early 1960s.

"Shippers turned to rail movements to guarantee that their product makes it to the market," said Kevin Knepper, general manager of Big Soo Terminal, the northernmost terminal on the Missouri.

In the last few years, a severe drought in the upper basin states has compounded the problem as the river has dropped to levels unnavigable by most fully-loaded barges. The Corps committed to minimum navigation this season, but the lone remaining tow operator serving the river beween Omaha and Sioux City considered the flows too low to turn a profit.

Shippers would need to lighten their loads to safely navigate the river. A large barge that would hold up to 1,450 tons with normal flows could carry no more than 1,200 tons at the current maximum draft of 7 1/2 feet, Knepper said.

Barges formerly accounted for a third of the business at Big Soo Terminal, an independent warehouse at the intersection of Interstate 29 and Singing Hills Boulevard that also handles rail and truck shipments. The vast majority of barges arrived in the spring loaded with dry bulk fertilizer, bound for elevators and agri-business dealers around the tri-state area.

"During the spring fertilizer season, we'd have 60 barges waiting in St. Louis for Sioux City," Knepper said. "During that stretch, Big Soo would unload one-and-a-half to two barges per day."

To compensate for the loss of barges, the terminal has relied more heavily on rail cars to move fertilizer.

John Dunlap, co-owner of Sioux Fertilizer in Hawarden, Iowa, an independent agri-business dealer that receives fertilizer through Big Soo, said not having river navigation could strain the distribution system. "It puts more pressure on the rail system, drawing products from further away," he said.

Knepper said changes in the dry fertilizer market have alleviated some of the pressure on the terminal. Increasingly, fertilizer is being trucked directly to large blending facilities in smaller towns like Alton, Iowa and Worthing, S.D.

Rising rail and truck rates in recent months probably are more attributable to record-high fuel prices than a lack of barge competition, Knepper said. But barge backers warn that could change if rail lines gain a near-monopoly on shipping.

One study of the Missouri River system found barges save businesses and farmers $100 million a year, compared to using rail only. Those savings have been estimated at $3 million to $5 million alone in Siouxland, or $10 to $15 a ton.

Bernstein said barges are the most efficient form of transportation for moving dense material like the large steel coils his family's steel fabrication business has received through Big Soo Terminal. In addition to its headquarters in downtown Sioux City, State Steel distributes the steel to its locations in Des Moines, Omaha, Sioux Falls, Spencer, Iowa, and Grand Island, Neb.

"Bringing a couple of million pounds of material up the river at one time is very efficient," he said. "Not having that option winds up costing us more money..."

Like Jebro, Ag Processing Inc. has its own Missouri River terminal -- located near the company's soybean processing plant at Port Neal, just south of Sergeant Bluff.

AGP has used both its Sergeant Bluff and St. Joseph, Mo. terminals to ship soybean meal, with the most recent barges departing in the fall of 2002, said Mike Maranell, a spokesman for the Omaha-based cooperative.

"In the past several years, the river really hasn't been a competitive market for AGP. Consequently, we haven't had a need to ship," Maranell said. At the same time, the cooperative wants to make sure navigation is a "competitive mode of transportation, now and into the future," he said.

Dave Dreeszen can be reached at (712) 293-4211 or davedreeszen@siouxcityjournal.com


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