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Thursday, November 23, 2017

The ‘Ag Coast’ of America

November 6, 2017

(Image: St. Louis Regional Freightway)

(Image: St. Louis Regional Freightway)

St. Louis Region’s Agriculture Freight Network Poised for Growth as Handling Capacity Increases along a 15-mile section of the Mississippi River. 

 
Located in the heartland of America, one 15-mile section of the Mississippi River in the St. Louis, Missouri, region delivers the highest level of grain barge handling capacity anywhere along the Mississippi River. Known as the “Agriculture or Ag Coast” of America in terms of barge transfer facilities for agricultural products, local stakeholders also know that in order to sustain and grow this impressive market share, ongoing and future infrastructure investment in multimodal interconnectivity is critical.
 
As production and demand for commodities like corn and soybeans increase, the St. Louis region is strategically positioned to handle a significant portion of the expected increase in freight volume along this waterway. Those findings were revealed during a recent meeting hosted by Bi-State Development, St. Louis Regional Freightway and America’s Central Port, further underscoring the positive outlook on the bi-state region’s role as a national and global freight hub.
 
To be sure, the amount of river business in the St. Louis region has disproportionately increased over the past three decades. That’s in no small part because the bi-state region’s barge transfer facilities are earning recognition as a more cost-effective and efficient means to transfer products by barge for shipment to the Port of New Orleans as compared to other areas north of St. Louis. That recognition comes on the heels of investment of more than $200 million in the region’s agricultural product barge transfer infrastructure facilities since 2005.
 
As the freight cost to ship large cargoes through places like Davenport (Iowa) or Peoria (Illinois) to and from New Orleans has increased significantly, the freight cost to ship through St. Louis to New Orleans has not increased, and in fact, is coming down. That’s because the St. Louis region is blessed with more efficient infrastructure and handling capacity, delivered via the region’s open waterways and barge transfer facilities. Railroads have also offered cheaper rates to large barge-loading facilities that can turn unit trains – carrying 110 to 125 railcars of grain and agricultural product – in just a few hours. 
 
“Barge loading and unloading capacity has expanded in the St. Louis area to take advantage of these train rates and barge freight rate adjustments,” said David Jump, president of Illinois-based American Milling. He added, “The four highest capacity grain barge loading facilities in the entire inland waterway are in Cahokia, Illinois. Three of the four were built in the past five years. As a result of increased handling capacity and favorable barge freight values, the St. Louis region has become a very significant destination for these trains.”
 
China has become a large buyer of soybeans with 35 percent of soybeans grown in the United States being exported to China. China National Cereals, Oils and Foodstuffs Corporation (COFCO International) never owned a grain/agriculture barge transfer facility in the interior of the United States until last year when it invested in the St. Louis region. And, China will begin buying grain coming into Cahokia this fall. 
 
The frequency of unit trains along Illinois Route 3 has increased since 2016 and is expected to increase again this fall. In 2016, fluctuations resulted in as many as two unit trains crossing Route 3 a day, with each unit crossing Route 3 twice a day. In early 2017, the fluctuation reached four unit trains per day. In the fall, CGB will complete unit train rail improvements, which will increase the amount of unit trains that cross Illinois Route 3 to potentially six. According to Jump, COFCO has the capability for two additional unit trains with the potential to accommodate a four-unit train per day capacity. In addition, Jump said American Milling is planning for an additional barge transfer facility, which would increase the St. Louis region’s capacity to handle even more grain and grain products in the future. 
 
The growth in capacity also comes as the demand for exports continue to increase. Indeed, U.S. soybean exports have increased from 20 million tons to 57 million tons over the past 30 years, and corn exports increased from 32 million tons to 57 million tons.
 
“In 1985, more than 5 percent of grain barges arriving in the New Orleans Harbors were coming from the St. Louis region, and now, that number has increased to about 30 percent,” said Jump. “The factors that are forcing growth in the St. Louis region are not going away. There is nothing on the river like the St. Louis region.”
 
Factors credited with producing barge traffic growth also include excess capacity at river terminals and high concentrations of barges, superior intermodal connectivity that includes six of the nation’s seven Class I railroad carriers, easy access to four interstate highways that all provide national access and the geographic advantage of being centered in America’s agricultural heartland; a region which naturally provides the northernmost ice-free and lock-free access on the Mississippi River to and from the Gulf of Mexico.
 
Jump said while cargo handling capacity in the St. Louis region is booming, rail switching capacity is stretched. Demands on barge switching are at or over capacity, and the American farmer is currently growing near-record crops again for corn and for soybeans.
 
In order to keep up with demand, Mary Lamie, Executive Director of the St. Louis Regional Freightway, said it is vital for the bi-state region to continue to invest in roadway infrastructure as additional rail and truck traffic begin to cross the region. “Infrastructure investment in our multimodal freight network is critical to ensure the United States remains competitive with the global market,” said Lamie.
 
Key regional priorities include improvements to Illinois Route 3, a new bridge to carry traffic across the Mississippi River along I-270 north of St. Louis between Missouri and Illinois, a new interchange at I-255 in Dupo, Illinois and improvements to I-64. As many as 20 infrastructure projects along the St. Louis Regional Freightway have been identified as freight priorities. www.thefreightway.com
 
 
(As published in the October 2017 edition of Marine News)
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