Tuesday, August 21, 2012

Inland waterways of the United States ($CNRD)

I was doing some reading about the inland waterways of the United States in conjunction with our Conrad Industries research. Barges are used to transport cargo along the inland waterways of the U.S., which consists primarily of the "Mississippi River System". (That's the Mississippi River, plus its major tributaries, the Ohio, Illinois, Arkansas, Red and Missouri Rivers, plus their tributaries. And the Intracoastal Waterway.

A 15-barge tow is common on the larger rivers with locks, such as the Ohio, Upper Mississippi, Illinois and Tennessee rivers. Such tows are an extremely efficient mode of transportation, moving about 22,500 tons of cargo as a single unit. A single 15-barge tow is equivalent to about 225 railroad cars or 870 tractor-trailer trucks. If the cargo transported on the inland waterways each year had to be moved by another mode, it would take an additional 6.3 million rail cars or 25.2 million trucks to carry the load.
Coal is the largest commodity by volume moving on the inland waterways. The country's electric utility industry depends on the inland waterways for over 20 percent of the coal they consume to produce electricity. Petroleum is the next largest group, including crude oil, gasoline, diesel fuel, jet fuel, heavy fuel oils and asphalt. Another large group includes grain and other farm products, most of which moves by waterway to ports on the Lower Mississippi River or Columbia River for export overseas. 60 percent of the country's farm exports travel through inland waterways. Other major commodities include aggregates, such as stone, sand and gravel used in construction; chemicals, including fertilizers; metal ores, minerals and products, such as steel; and many other manufacturers products.
It looks like much of the new petroleum production in areas with insufficient pipeline capacity will be transported by barge. That means that barge shipping should be robust to the decline of coal. And barge builders will benefit because a coal barge is not a perfect substitute for a barge transporting petroleum.

Did you ever notice how starved the western half of the country is for navigable rivers and canals? There's a number of reasons for this: mountainous terrain, insufficient or intermittent river flows, and hydroelectric dams all limit barge shipping in the western U.S. Conrad's location in Morgan City is the perfect place to be in the barge business.


juhan harm said...

Interesting article about the Mississippi River floods/droughts:

Water levels near Memphis are ranging from 2.4 to 8.3 feet below river stage, compared with 11.7 feet above at this time last year.
The direct costs are staggering: NASA explains that a loss of just one inch of draft can require a ship to run with 17 tons less cargo.

Not sure whether this current drought is positive or negative for CNRD.

CP said...

Probably not that big of a deal.