Tugboat Roberta Tabor pushes barges down the Mississippi River in Granite City, Illinois, U.S., Friday, July 9, 2022. Grain shipping is down from peak levels, but water levels on the river is now a problem.
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According to Memphis Office of the National Weather Service, the Mississippi River is expected to equal the all-time record of -10.70 feet either later today or tonight. The Mississippi River is a vital waterway for commerce, and lower water levels have impacted the amount of goods that can be imported or exported from New Orleans. Barges cannot be fully loaded. According to the US Department of Agriculture’s Weekly Transportation Report, southbound barge tonnages have been reduced on the river by more than 20%.
Agricultural shippers of corn, soybeans, and wheat use barges as a cheaper alternative to trucks or rail to transport their grain in bulk. Just under half (47%) of all grain is moved by barge, according to the USDA. About 5.4 million barrels of crude and 35% of thermal coal are transported on the Mississippi.
“While the public and the media generally understand that our economy depends on the viability of international shipping, trucking and rail, the vital role of our inland waterways is often overlooked,” said Peter Friedmann, Executive Director of the Agriculture Transportation Coalition. “Our members depend on adequate water levels in the Mississippi River system to reach domestic and international export markets. The small disruption to the water supply chain will be felt not only by our American food, farm and fiber producers, but also by the United States. and international consumers as well. »
Retailers turn to trailers for storage
According to logistics experts, retailers are moving large and small items in 53ft trailers as alternatives to warehouses.
“We certainly hear from our customers for the short term, they store larger and bulkier items like furniture in trailers attached to their warehouses,” said Brian Bourke, Chief Growth Officer of Seko Logistics. “While we don’t stock regular inventory in trailers or 53ft containers, we use 53ft containers to store certain items like unsorted returns that are less critical, to focus the warehouse on the shipping to customers.”
In addition to furniture and unwanted items, goods are also heading for storage.
“Tyres are another important inventory item in storage,” said Joe Monaghan, CEO and President of Worldwide Logistics Group. “We are also getting orders for 53ft containers to hold product in pop-up yards for one to six months.”
Paul Brashier, vice president of drayage and intermodal at ITS Logistics, told CNBC that retailers are trying to find creative ways to manage excess inventory.
“A lot of our customers’ distribution centers (DCs) are overstocked and they’re navigating how to manage that excess inventory and move all subsequent freight,” Brashier said. “With this headwind, CDs handling their import freight are really feeling the pressure. We identify their high-demand SKUs and move them from their terminals to our pop-up transshipment facilities. We then load that product into a 53-foot container to move that inventory further inland so it can reach the consumer faster. »
Congestion of East Coast ports
One of the factors that affects reliability is the number of ships a port receives. Ports that see fewer ships, including Charleston, Long Beach, Los Angeles and New York, are seeing improvements in ship reliability, Murphy said. But for Savannah, which has dozens of ships waiting at anchor, there are delays that impact the reliability of ship schedules.
“Ports like Savannah are full,” said John McQuiston, managing director, global head of origins for the Wells Fargo Trade and Supply Chain Finance division. “You have ships holding inventory while ports process containers. What used to take days is now taking weeks due to the number of containers arriving.”
“One of my biggest worries right now with this congestion is a railroad strike that would shut down the third leg of transportation,” McQuiston said. “The United States would have an element of paralysis in some areas of the supply chain if there was a railroad strike. You don’t have enough taxis or drivers to pick up the containers once they’re bound for the rail.”
The CNBC Heat M Supply Chainandp the data providers are the artificial intelligence and predictive analysis company Everstream Analytics; the global freight booking platform Freightos, creator of the Freightos Baltic Dry Index; the logistics provider OL USA; provider of freight forwarding and logistics services Worldwide Logistics Group; the FreightWaves supply chain intelligence platform; the Blume Global supply chain platform; third-party logistics provider Orient Star Group; the marine analysis company MarineTraffic; marine visibility data company Project44; shipping data company MDS Transmodal UK; Ocean and Air Freight Rate Market Benchmarking and Analytics Platform Xeneta; leading research and analytics provider Sea-Intelligence ApS; worldwide crane logistics; DHL Global Forwarding; freight logistics provider Seko Logistics; and Planet, provider of daily satellite images and global geospatial solutions.