The Mississippi River continues to have high water levels disrupting barge traffic. The opening of the upper Mississippi River for commercial traffic continues to be delayed, while the rest of the Mississippi River and Illinois River have reduced tow configurations, reducing tonnage per tow and increasing the number of round trips to fill an export order. The effective reduction in capacity increases wait times for shippers and increases shipping rates.
In early March, barge freight rates along the Illinois River were up 90 percent from last year and 54 percent from the three-year average for early March. In one month, barge freight rates along the Illinois River fell to 63 percent above last year and 20 percent above the three-year average. The forward three-month barge rate indicates that barge rates will continue to be above the three-year average rate into summer.
Weather patterns will affect the forward rate. With impressive snowstorms slamming the Northern Plains and Upper Midwest in early April, high water conditions will persist into May or even June. If the U.S. and China reach a free trade deal that results in a rush of export business, towboat availability could become an issue. Expect barge rates to stay above the three-year average but not explode higher.