We recently sat down with Ben Doane, barge freight merchandiser, CHS, to discuss how important river shipping is to the agriculture industry and our nation’s economy. What we learned is that 60 percent of all grain exports are directed through the U.S. Gulf Corridor. As Doane explains, “The Mississippi River is the link in the chain that connects local growers to the global marketplace.”
He adds, “The river system in the United States consists of 12,000 miles of waterways, spanning 38 states. Barge exports equate to $250 billion in revenue nationwide.” The State of Minnesota ranks #4 in the nation for agricultural exports. Grains including soybeans, corn, feed and wheat, account for $539 million in annual sales and $381.7 million of the Gross State Product (GSP). Source: Value of Trade Study, 2014, US Grains Council.
Producers who connect to the global market via the river transport their grains by truck to a river terminal. Saint Paul is the northernmost port on the Mississippi River, making it a popular destination for both local growers and those north of the Twin Cities. At the terminal, grains are transloaded from truck to barge and sent downstream to New Orleans. Barges are then transferred to oceangoing vessels and sent to their final destinations. Commodities are delivered to countries as far away as China, Colombia, Japan and South Korea.
The Economics of River Shipping
In addition to opening doors to the global marketplace, river shipping offers the most cost-effective way to transport grains. As Lee Nelson, president, Upper River Services, explains, “It’s simply a matter of friction. Barges on water create less friction than trains on tracks and semi-trucks on highways. As a result, they use significantly less fuel, emit significantly fewer emissions and cost the shipper significantly less money.”
If growers didn’t have access to the river, the results would be severe. Local producers would lose their ability to price competitively in the foreign market, limiting their sales to domestic markets. In addition, rail and semi-truck traffic would soar, leading to higher levels of congestion and emissions.
Food for Thought
“As a resident of the Twin Cities, the next time you drive across a bridge on the Mississippi River and you see a boat transporting a barge, remember what could be in that barge and how important the product is for the United States Economy in terms of connecting producers and consumers to the global market.” – Ben Doane, CHS