A Quad-City leader in the barge industry offered a gloomy forecast Thursday about the impact of this year’s record drought on the river transportation industry and its customers.
Larry Daily, president of Alter Logistics, Bettendorf, told an audience of river advocates gathered at Moline’s Stoney Creek Inn that he had hoped to be discussing how the drought was all over. “Unfortunately, the drought is persisting and getting worse,” he said. “The only solution for it is rain.”
Daily, whose talk was titled “When the Bottom is Too Close to the Top,” was among the guest speakers at the fifth annual Upper Mississippi River Conference. The three-day conference, which wraps up today, is hosted by River Action Inc.
“The good news is we’re moving again,” Daily said of barge traffic on the Mississippi. This summer’s lack of rain and the low water levels have created some standstills for the barge industry.
He said the most significant navigation problems have been south of Cairo, Ill., down to the Gulf of Mexico. But even Alter’s operations in the Quad-City region have been forced to do dredging to keep traffic moving at the river terminal.
Speaking to about 100 city representatives, planners, environmentalists and college students, Daily said traffic is moving again due to the efforts and coordination of the U.S. Army Corps of Engineers, the Coast Guard and the industry itself, which has taken self-imposed measures to keep commerce going.
For example, he said tows are carrying lighter loads and in some cases, fewer barges, to navigate the low river.
“Just to get back to normal, we would need an additional nine to 15 inches of rain,” he said. “I don’t want to get that in the form of snow.”
Those in the industry cannot help but compare the 2012 drought to 1988, which was the most significant drought since the Dust Bowl days in the 1930s. “In 1988, there were times we lost two or three weeks on the river,” he said. “Now, its two or three days.”
But any delay means added costs to the barge companies and their customers, Daily said, adding that the fuel and labor costs don’t decrease when a barge is waiting to move.
In 1988, he said the industry lost $1 billion because of the drought. “It is going to be a bigger hit (this year),” Daily said.
He stressed that the drought’s impact will reach beyond farmers, though in the Quad-City area that is who most people think about. Of the 12 billion tons moved each year on the Mississippi, only 12 percent is farm crops. Coal, he said, is the largest cargo at 29 percent, followed by petroleum products at 25 percent and crude at 19 percent.
However, the price increases are hitting the farmers. Daily said that since June prices have risen significantly. For example, he said, hauling soybeans has increased from $24 a ton to $37 a ton from St. Paul to New Orleans, from $9 a ton to $14.50 a ton from St. Louis to New Orleans, and from $6 a ton to $23.50 a ton from Memphis to New Orleans.
For barge companies with contracts that are set annually, he said, “there are a lot of companies losing money.”
Daily’s discussion was among many river-related topics being discussed at the conference, which had the theme “Make Room for the River, In Your Life, Floodplain and Architecture.” Participants could take part in field trips to Western Illinois University’s Quad-Cities riverfront campus and the Kone Centre in Moline and to the Hennepin Canal.
Kathy Wine, executive director of sponsor River Action, said this year’s conference drew 150 participants as well as 80 college students. “We have lots of hard work to do, and these are the people with the vision to get it done,’’ she said.